The commercial office market in Dubai continues to “touch the sky” in terms of historic high demand, with rising occupancy and rentals across key business districts. According to global real estate services provider Savills, in its Q3 2024 Dubai Office Market report, an upsurge in new business registrations and expansions by existing companies, in areas such as finance and technology, is rewriting the landscape of real estate in Dubai and cementing its position as a leader of global business destinations.
PC: Arabian Business
Business Growth and Demand Boom
Savills recently reported that the first half of 2024 showed a registration total of more than 24,000 new businesses in Dubai itself. Compare this to the previous year, and this is an increase of 5%. Such high growth positively reflects on Dubai’s momentum from the Dubai Economic Agenda, or D33, settling a further place as an international benchmark for trading and innovation. Such high-end business metropolises as the Dubai International Financial Centre, Downtown, and Business Bay recorded average rents of between 95% and 97% occupancy at such a high level of demand for good quality office space.
Record Growth in Rental Values in Core Locations
Grade A office rents have risen 25% year over year. Growth drivers were Business Bay and Downtown, with a rise of 44% and 36%, respectively. DIFC continues to lead the market. Rents on prime offices increased by as much as 25%. New developments such as DIFC Square and Immersive Tower are expected to add over 10 million square feet of grade A office space by 2028.
Strategic Attraction to Global Companies
According to Toby Hall, Head of Commercial Agency at Savills Middle East, Dubai office market growth emanates from the easy business setup process, tax friendly conditions, and strategic location of the city. “Dubai’s ability to remain a global business hub is further complemented by the fact that more and more businesses are establishing or expanding here,” he said, citing quality office spaces to be attracting talent and further growth. Hall further envisaged that demand for high-grade offices will compel further market evolution.
Flexibility and Hybrid Work Trends
Flexible workplaces are also in great demand as hybrid models of work become increasingly popular. According to Paula Walshe, Director of Transactional Services at Savills Middle East, international firms have been in high demand for flexible office space to suit their growth and strategic ambitions and therefore align with Dubai’s vision. Open plan and co-working spaces, for example, offered by Executive Centre and Cloud Spaces, are fast gaining popularity among new ventures and companies that require flexible leases and fast setup.
Increased Interest Beyond Prime Areas
Even though demand for office space will still gravitate towards prime business districts, there are alternative areas also registering growth in rents. A 37% year-on-year increase in rental values was reported by both Dubai Science Park and Dubai Investments Park. Expo City is also emerging as a viable alternative that offers good quality facilities and transport links at more accessible rates than central business hubs.
Future Outlook
The demand for Dubai office space will be stable this year, according to the latest Savills report. More and more companies are attracted by the emirate’s strategic position, business-friendly environment, and superior infrastructures.
