Dubai Office Market Soars: 933 Transactions – AED 2.8B in Sales

Dubai’s commercial real estate market is making waves as it marks a record-breaking start to the year. According to the latest insights from Cavendish Maxwell, a top-tier real estate consultancy, office property sales soared to AED 2.8 billion in the first quarter of 2025, spread across 933 transactions. This signals a robust resurgence in investor confidence and rising demand for office space in the emirate.

Strong Growth Compared to Last Year

The first three months of 2025 showed a dramatic upswing in both value and volume of transactions when compared to the same period in 2024. Office sale values surged by 83%, while the number of deals recorded grew by nearly 24%. These figures reflect Dubai's continued momentum as a leading business hub with an attractive real estate proposition.

Surge in Off-Plan Sales Signals Changing Preferences

Although ready offices continue to dominate the market, there has been a remarkable increase in interest in off-plan properties. Cavendish Maxwell’s report highlights that off-plan office transactions rose almost eightfold to AED 800 million in Q1 2025, compared to just AED 100 million in the same period last year - an astonishing 741% leap. Ready office deals also saw a healthy 40% year-on-year growth. Notably, off-plan properties made up 18% of total transactions this quarter, more than doubling from 8% a year ago.

Vidhi Shah, Director, Head of Commercial Valuation at Cavendish Maxwell, said: “These record-breaking figures speak for themselves. Dubai continues to enhance its position as a global business hub and a magnet for businesses large and small. The momentum is real: Q1 2025 saw nearly 40% more foreign company registrations - including multinationals and SMEs - compared to the same time last year, reflecting ever-growing investor confidence and creating unprecedented demand for office space.

“The surge in off-plan deals can be attributed to buyer trust in upcoming developments, competitive launch prices, flexible payment plans and expectations of long-term capital appreciation. With limited existing supply and rising rental costs, a growing number of tenants are opting to buy as a strategic, long-term cost-saving measure. Ready offices still account for the majority of sales, but it is clear that off-plan properties are very much in demand, and we expect this trend to continue throughout 2025 and beyond.”

Price Momentum Accelerates Across the Board

Office prices are firmly on the rise. In Q1 2025, average sales prices jumped 24.5% compared to last year and 6.5% from the previous quarter. By the end of March, prices averaged AED 1,650 per square foot - up from AED 1,325 in March 2024. Rents followed a similar trajectory, with a 24% annual increase and a 6.7% rise from Q4 2024, pushing average rental rates to AED 160 per square foot. All categories of office quality saw price growth, driven in part by the scarcity of A-grade inventory, which in turn lifted prices for B and C-grade spaces. Downtown Dubai led with the steepest annual hike of nearly 40%, trailed closely by DIFC and Barsha Heights at 39% and 38%, respectively.

Business Bay Dominates Transaction Activity

Business Bay retained its position as the most active district for office transactions, recording 316 deals in Q1. Following closely were Jumeirah Lakes Towers (222 transactions), Motor City (130), Barsha Heights (88), and Dubai Silicon Oasis (41). These figures underscore the strong investor interest in both established and emerging business districts.

Mid-Sized Offices Lead in Buyer Preference

A significant portion of demand focused on mid-sized office spaces. Offices ranging from 1,000 to 2,000 square feet represented 48% of total transactions. Smaller units under 1,000 square feet contributed to 40% of the activity, while offices between 2,001 and 5,000 square feet accounted for 10%. Only 2% of deals involved larger spaces exceeding 5,000 square feet, pointing to the prevailing preference for compact, functional workspaces.

New Office Supply on the Horizon

Dubai’s total office inventory has now reached nearly 9.3 million square metres of gross leasable area. The pipeline for future development remains active, with around 215,000 square metres expected to be added by the end of 2025. An additional 181,000 square metres is projected to enter the market in 2026, providing more choices for businesses and investors alike.

Vidhi Shah added: “Much of the new supply is concentrated in core business districts, with a significant proportion in the A-grade category. With a strong development pipeline over the next three years, we expect the current supply-demand imbalance to narrow, bringing some relief to tenants and easing upward pressure on prices.”