According to a report by Savills, a global provider of real estate services, Dubai’s commercial office market is expanding to new heights, with historic demand propelling occupancy rates and rental growth throughout prime business districts.
“The city’s real estate landscape is more competitive than ever, positioning Dubai as a top global business destination,” Savills said in its Q3 2024 Dubai Office Market report.
“This is due to a significant increase in new business registrations and expansion activities by existing firms, including those in the finance and technology sectors. Over 24,000 new businesses were registered in the first half of 2024, a 5% increase from the previous year,” the report stated.
This increase demonstrates the robust economic momentum driven by the Dubai Economic Agenda (D33) and the emirate’s standing as a centre for global innovation and trade.
Important business districts like Business Bay, Downtown, and DIFC now have occupancy rates ranging from 95% to 97%, indicating strong demand for first-rate office space.
On average, Grade A rental values increased by 25% annually, with increases of 44% and 36% in particular areas, such as Business Bay and Downtown.
With rent increases as high as 25%, DIFC’s premier properties dominate the market, and by 2028, new construction like DIFC Square and Immersive Tower is expected to add more than 10 million square feet of first-rate office space.
“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,” Toby Hall, the Head of Commercial Agency at Savills Middle East said, as reported by Zawya.
“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,” he added.
According to Paula Walshe, Director of Transactional Services at Savills Middle East, Dubai’s reputation as a top location for international business expansion is demonstrated by the historically high occupancy rates and rental increases.
Talking about Dubai’s broader real estate market, it is likely to surpass AED 500 billion in sales by the end of 2024 after recording a historic October that boosted the industry’s year-to-date figures. The total sales for 2024 already reached AED435.6 billion up to the end of October through 150,651 transactions, thereby breaking through the previous record of AED409.8 billion posted by 132,628 transactions at the close of 2023.
In October 2024, villa sales grew 102% compared to a similar period in 2023, in transactions worth AED20.5 billion. With dealings involving 3,830 housing units, apartment sales also fared well, recording a 67.2% increase in volume, at AED 28.1 billion in 15,662 transactions. When it comes to commercial property sales, there were 424 transactions totalling AED916.2 million, though the volume stood at 1.9% down from the previous October. While the average price per square foot of commercial properties grew by 7.1%, it stood at AED1,585.
October has been the most prolific month for Dubai’s real estate market of late. In 2020, the same month saw dealings worth AED 6.8 billion with 3,300 transactions, which in 2021 became AED 13.1 billion in transactions of 5,300, AED 25.2 billion via 8,700 dealings in 2022, AED 39.48 billion via 12,100 transactions in 2023, and a new record of AED61.1 billion in October 2024.
Several areas remained high in terms of transaction volume and value in October 2024. Jumeirah Village Circle topped the list with 1,487 transactions worth AED1.5 billion, followed by Business Bay, which accounted for 1,135 transactions valued at AED2.6 billion, and Dubai Hills Estate, which saw 867 transactions valued at AED2.1 billion. Other high-performing districts included Dubai South, which realised 847 transactions valued at AED 877.6 million, and Motor City with 819 transactions valued at AED 973.4 million.
“Off-plan projects, Greenridge was the best selling by value with 332 villas sold for AED1.18 billion. Off-plan apartments were topped by Sobha Orbis, with 761 units selling at AED891.6 million. Ready apartment sales were led by Canal Front Residences with 92 transactions amounting to AED 258.9 million. The best-selling ready villa project was Shams Townhouses, with 16 properties sold for AED42.4 million,” reported Business Outreach.