Savills Middle East: Dubai Office Market Overview Q3 2024
In Q3 2024, the office market in Dubai had an unprecedented uptake and rental surge across key business areas.
Dubai's commercial office market is booming, with high demand pushing occupancy rates and rental prices to new records across the city’s prime business districts. According to the Q3 2024 Dubai Office Market report by Savills, the surge is fuelled by an increase in new business registrations and expansion by existing firms, particularly within the finance and technology sectors. This trend is solidifying Dubai’s position as a premier global business destination.
Surge in Business Registrations Signals Strong Economic Growth
The report highlights that over 24,000 new businesses were registered in the first half of 2024, representing a 5% increase from the previous year. This growth underscores the economic momentum driven by the Dubai Economic Agenda (D33) and strengthens Dubai's reputation as a hub for international trade and innovation. Key business areas, including DIFC, Downtown, and Business Bay, now show impressive occupancy rates between 95% and 97%, indicating the robust demand for top-tier office spaces.
Rising Rental Values in Prime Locations
Rental rates for Grade A office spaces have surged by 25% year-on-year, with prime areas like Business Bay and Downtown seeing substantial increases of 44% and 36%, respectively. DIFC remains a leader in the market, with rent hikes reaching up to 25%. New developments, including DIFC Square and Immersive Tower, are expected to add over 10 million square feet of premium office space by 2028, meeting the growing demand for high-quality commercial properties.
“Dubai’s office market growth underscores its appeal as a global business hub, bolstered by ease of setup, favourable tax conditions, and a strategic location,” said Toby Hall, Head of Commercial Agency at Savills Middle East. “Businesses are establishing or expanding their presence here, recognising the value of high-quality office spaces that support talent attraction and growth. This demand signals further market evolution in the years ahead.”
Paula Walshe, Director of Transactional Services at Savills Middle East, added, “The unprecedented rental increases and high occupancy rates demonstrate Dubai’s standing as a premier destination for global business expansion. We’re seeing strong interest from international firms, especially in finance and technology, prioritising flexible office spaces to meet their ambitious growth targets and align with Dubai’s strategic vision.”
Flexible Workspaces Gain Popularity Amid Hybrid Work Trends
The shift toward hybrid work has driven up demand for flexible workspaces, as companies increasingly opt for open-plan designs and co-working options, such as those provided by Executive Centre and Cloud Spaces. These flexible spaces are particularly attractive to startups and new entrants seeking adaptability in lease terms and quick access to fully equipped offices.
Demand for Affordable Office Spaces on the Rise
While prime business districts remain highly sought after, more affordable locations are also experiencing notable rental growth. Dubai Science Park and Dubai Investments Park recorded a 37% year-on-year increase, reflecting the demand for budget-friendly options. Additionally, Expo City is emerging as a competitive alternative, offering high-quality facilities and convenient transportation links at a lower price point than central business areas.
Positive Outlook for Dubai’s Office Market
The report anticipates continued demand for office space throughout the year as more companies establish themselves in Dubai. Businesses are drawn to the city’s strategic location, supportive business climate, and advanced infrastructure, which collectively enhance Dubai’s appeal as a global business hub poised for long-term growth.
Comments