In-Depth Analysis: Dubai's Commercial Real Estate Market - Office Demand Hits Record Levels in 2025In-Depth Analysis: Dubai's Commercial Real Estate Market - Office Demand Hits Record Levels in 2025

Previous Next

The commercial property landscape in Dubai underwent a significant transformation during the third quarter of 2025, fueled by a massive surge in investment activity. The total value of all commercial real estate transactions soared past 30.38 billion AED, marking a 31% year-on-year increase, according to market data. These metrics cement Dubai's standing as a preferred global business hub and reaffirm that commercial property investment remains one of the most lucrative and attractive options for local and foreign investors alike.

The Office Sector Drives Momentum: Unprecedented Growth

The office space segment continues to lead the charge as the primary growth engine, with office sales alone totaling 3.1 billion AED across 1,153 units. Most tellingly, the annual sales growth reached a staggering 93%, supported by an additional 18% quarter-on-quarter increase.

The total number of transactions also surged by 45% year-on-year, reflecting the escalating appetite from major corporations, international startups, and executives looking to secure modern, premium workspace in Dubai.

Depleted Inventory: Historic Lows for Prime Vacancy Rates

The supply of Grade A office space in Dubai is under severe pressure. Reports from leading global consultancy firms (such as CBRE and Knight Frank) indicate that vacancy rates for this category have dropped to their lowest point in over a decade. This trend is particularly noticeable within Free Zones, where numerous multinational companies are establishing their Middle Eastern headquarters.

Areas of Focus: Where Investment Activity is Concentrated

According to market research data, Business Bay led the office market with 328 transactions, closely followed by Jumeirah Lakes Towers (JLT) with 277 deals. Neighbourhoods like Majan, Al Barsha Heights, and Jumeirah Village Circle also stand out as vibrant areas for transactions. This geographical focus aligns with the notable influx of foreign companies into key growth sectors such as FinTech, media, trade, and professional services.

The Modern Investor and the Shift to Sustainability

Commenting on market trends, Yogesh Yerikeriyeddi, Director of the JLT area at CRC Real Estate, noted that the office market maintained exceptional strength, driven by record demand for Grade A towers that comply with Environmental, Social, and Governance (ESG) criteria.

With vacancy rates at historic lows, fitted and vacant commercial offices for sale are attracting unparalleled investor interest. The limited supply of premium units, combined with robust corporate relocations and expansion demand, continues to push rents and capital values upward in core Free Zones.

Off-Plan Property: Confidence in Future Development

Investor confidence in Dubai's urban development trajectory is evident in the volume of off-plan transactions. Sales of office and commercial space within projects still under construction accounted for 1.86 billion AED, out of 2.4 billion AED in total off-plan commercial transactions. Over 680,000 square meters of new office space is expected to be delivered by 2027, with high demand anticipated in Dubai South, Business Bay, and Motor City.

Retail and Commercial Unit Rebound

The boom was not limited to offices; the retail and commercial unit sector also saw strong growth. Transaction values rose to 1.15 billion AED, achieving a 95% quarter-on-quarter increase and 55% annual growth. This rebound is attributed to soaring tourism (over 12.4 million visitors in the first nine months of 2025) and higher local spending, coinciding with the rise of modern retail destinations like City Walk and Dubai Hills.

Market Valuation: Rising Prices and Investor Demand

The average secondary market office selling price hit a decade high, reaching 1,685 AED per square foot. Overall demand for commercial real estate from investors surged by 47% compared to the previous year, underscoring Dubai's sustained appeal as a secure and profitable investment destination.

2026 Outlook: Continuing the Upward Trajectory

Experts anticipate steady growth in Dubai's commercial real estate market through 2026, driven by Free Zone expansion, the influx of high-net-worth individuals, stable economic policies, and unique tax advantages. Dubai is firmly on track to establish itself as one of the world's most dynamic and vital centers for trade and investment.

Conclusion: Solid economic fundamentals, a strategic geographical location, business-friendly legislation, and advanced urban infrastructure place Dubai's commercial real estate market on a promising future trajectory, confirming its status as a trusted global investment destination. At Savoir, we view this trend as a golden opportunity for our clients to acquire the rare commercial assets that deliver excellent returns and sustainable capital appreciation.