Dubai Office Prices and Rents Surge 24% in Q1 2025 Amid Soaring Demand

Limited Grade A space fuels record increases as new foreign businesses boost market momentum; landlords maintain strong leverage in a supply-constrained environment.

Dubai’s Commercial Real Estate Market Sees Unprecedented Growth in Early 2025

Dubai’s office property market is off to a booming start in 2025, with both prices and rents witnessing a sharp 24% year-on-year increase during the first quarter. According to leading property consultancy Cavendish Maxwell, the city’s commercial real estate remains heavily landlord-driven, propelled by a shortage of Grade A spaces and a surge in new business activity.

Sales prices for office units jumped by 24.5%, while rental rates also rose by 24%, as demand continued to outstrip available inventory—particularly in premium Grade A locations. With options dwindling at the top end of the market, demand is now spilling over into Grade B and C segments, inflating values across the board.

This spike is underpinned by Dubai’s strong economic fundamentals. The Dubai International Chamber reported a remarkable 39% year-on-year increase in new foreign company registrations in Q1 2025, including the entry of 11 multinational corporations and 42 SMEs. This influx of businesses is driving the need for more workspace, further heating up the office sector.

“Dubai’s office market entered 2025 with strong momentum, supported by steady economic growth, high levels of business formation, and resilient trade performance, all within a stable macroeconomic environment,” Cavendish Maxwell analysts noted. “Strategic infrastructure development, world-class connectivity, and a pro-business regulatory framework have helped reaffirm Dubai’s appeal to international investors and enterprises alike.”

The first quarter saw roughly 900 office transactions completed—representing a 23.7% rise compared to the same period in 2024. Notably, off-plan sales accounted for nearly 19% of all transactions, up from just over 8% in Q1 2024, indicating growing confidence in future developments.

Looking ahead, approximately 215,000 square meters of new office space is expected to be delivered throughout 2025. However, analysts warn that actual completions may fall short due to development delays and high pre-booking rates, which continue to restrict immediate availability. As a result, high occupancy levels are expected to persist.

“The market remains firmly in the hands of landlords,” said the report, projecting that sales and rental prices are likely to climb further this year. Some tenants may opt to downsize, relocate to less expensive locations, or embrace flexible workspace models to mitigate costs. Others are pre-committing to pipeline projects in anticipation of continued constraints.

Despite global economic uncertainties, Dubai’s office market is proving to be a resilient and attractive investment destination—reaffirming its status as a dynamic business hub for the region and beyond.