Dubai Office Rents Surge As Demand For Premium Workspaces Tightens Supply

May 27, 2026
News
31

The market for commercial real estate in Dubai continued to exhibit an upward trend during the first quarter of 2026, as office rentals generally exhibited a significant increase across a number of different categories because demand for high-quality office space continued to be prevalent even under tighter market conditions. As per the analysis by JLL (Jones Lang LaSalle Incorporated), it was reported that the Dubai Grade B Office Market was the best performing segment for Q1 of 2026, with an increase in rental rates by 23.4% over the previous year.

The latest report from JLL entitled Real Estate Market Dynamics has reported that the decreased availability of office space in key business districts has caused companies to look towards alternate categories of office space resulting in greater than historical rates of increase for rental values outside of the Prime segment. Economic fundamentals were strong and the continued strength of occupier activity has helped to maintain the stability of the overall Dubai properties market, despite uncertainty in the wider region, for this quarter.

DubaiOfficeRentsSurgeAsDemandForPremiumWorkspacesTightensSupply

Grade B Offices Lead Rental Growth Across Dubai

The continued growth of Dubai's office rental market during the third quarter has predominantly come from the growing demand for quality office space located within established business districts (i.e., grade b and a).

JLL reported:

Grade B office rental growth of 23.4 per cent
Grade A office rental growth of 19.0 per cent
Prime office rental growth of 17.2 per cent

According to industry analysts, the lack of quality office space available in premium business districts has caused many occupiers to relocate to Grade B office space. Demand for offices for rent in Dubai remains strong for both consulting and technology companies.

The total stock of office property in Dubai during the quarter was about 101.1 million square feet. This reflects continued commercial growth throughout Dubai. Demand for commercial property in Dubai is also increasing as international corporations are establishing regional offices.

Key Business Districts Keep Attracting Occupiers

Demand for high-quality office space has also remained strong across the most significant business and financial centres in Dubai.

Occupiers are still attracted to:

Multi-national companies, technology businesses and wealth management firms are leading the way on this demand across the various business centres. In addition to this, there is also a lot of activity being generated as a result of commercial properties for rent in Dubai which has led to a much stronger leasing activity along key commercial corridors. On the other hand, investors are still assessing offices for sale in Dubai as demand for premium office space continues at a rapid pace.

Leasing Activity Declines as Renewals Rise

Even though rental rates continued to rise at a solid rate, overall leasing activity was slower by way of registered contract than the previous quarter, which reflects businesses employing more cautious expansion plans.

Year-On-Year decreases of 7.7% were experienced for registered Office Rental Contracts
New Monthly Office Contract registrations in March 2020 decreased by 20.6% compared with February 2020:

Although there are fewer new leased properties, the demand for renewal of office Lease Contracts has remained very strong. Corporate occupiers and Global investors have continued their interest in high quality office structures among the best real estate in Dubai.

According to JLL, office lease renewals have increased by 11.2% year-on-year; indicating that companies still have confidence in the business and are committed to operating long-term in Dubai. There are also an increased number of opportunities associated with Dubai real estate market as companies continue to focus on operational stability as a priority for their long-term future.

Developers Continue to Overcome Development Challenges

Developers and landlords are also facing challenges from the global construction and supply chain market while dealing with increasing occupier demand.

According to JLL, developers are relying more on:

Strategic Sourcing Agreements
Phased Procurement Planning
Negotiating Flexible Contracts
Alternative Material Supply Solutions

These strategies are allowing developers the ability to continue meeting deadlines for projects despite continued global supply chain issues. Expanding commercial properties for sale in Dubai is likely to continue attracting institutional investors who are interested in stable long-term yield investment opportunities. The continuing interest in real estate investment Dubai is providing support to the continuing growth of the commercial property sector in Dubai.

Retail Sector Has Good Resilience

The retail property market in Dubai also performed well in Q1 2026.

According to JLL:

There is currently 56 million square feet of retail space
The citywide retail vacancy rate has dropped to 4.8%
Four of the five super-regional malls have increased their rentals by an average of 12.4% per year

According to the consultancy, community retail centres and neighbourhood shopping centres continue to attract a steady level of demand from tenants, due to changing consumer behaviours. Also, international investors are continuing to monitor properties for sale in Dubai in relation to mixed-use developments.

Retailers are increasingly concentrating on:

Experiential shopping format
Wellness-based retail
Lifestyle retail environment
Community (local) retail shops

An increase in business activity is creating an additional demand for property for rent in Dubai in proximity to the major commercial districts.

Dubai’s Office Leasing Forecast Appears Promising

Although leasing activity within the quarter has slowed down, reporting of ongoing hope for continued healthy commercial real estate market conditions throughout Dubai’s future is still being provided by industry professionals. According To JLL, Dubai’s strong economic climate and stable occupier demand makes it very likely that they will continue to outperform for the foreseeable future based on prevailing market trends.

Analysts believe there is also enough expansion activity and investor interest from abroad and through Economic Diversification initiatives to keep Dubai’s commercial office market up. There has also been a significant increase in demand for property investment in Dubai due to the expansion of companies being established in the UAE and are expanding their operations outside of Dubai. All major real estate company in Dubai are evaluating their commercial supply levels for the future as well.

ALSO READ