Office leasing in Dubai rose 4% during the second quarter, supported by smaller units, while businesses continued to defer larger space commitments.
Dubai’s office market maintained its resilience in the second quarter of 2026, with demand for Grade A office spaces continuing to exceed available supply. However, occupiers took longer to finalise leasing decisions due to ongoing regional uncertainty, according to Savills.
The consultancy reported that office leasing activity continued to expand, driven by demand from small businesses, start-ups and companies setting up operations in the emirate. Meanwhile, landlords benefited from tight availability of premium office spaces and consistently low vacancy rates.
Data from the Dubai Land Department showed that 38,082 office leasing transactions were recorded in the second quarter, marking a 4% increase compared with the previous three months. The growth was mainly supported by new lease agreements, which climbed 16% to 27,121 transactions, while the number of lease renewals fell to 10,961.
Smaller office spaces continued to drive activity in Dubai’s commercial property market. Units measuring less than 500 square feet accounted for 66% of all leasing transactions, after demand in this segment rose 17% quarter-on-quarter. The trend reflects continued interest from small and medium-sized enterprises (SMEs) and new businesses attracted by Dubai’s competitive business environment and comparatively affordable office costs.
Strong demand for premium office spaces
Although activity among larger corporate occupiers became more cautious during the quarter, Savills said the slowdown was mainly due to longer internal approval timelines rather than a decline in demand.
Several companies delayed relocation and expansion plans amid regional geopolitical uncertainty, opting instead to renew existing leases, pursue targeted expansions or use flexible workspace solutions. The consultancy expects many postponed requirements to return to the market in the second half of the year as business sentiment strengthens.
Demand for high-quality office accommodation remained particularly robust.
While Dubai Land Department figures do not cover the Dubai International Financial Centre (DIFC), Savills noted that DIFC Square — one of the few major Grade A office projects completed this year — was largely leased before completion and continues to attract strong interest from occupiers.
The report also pointed to Immersive Tower, which is expected to be completed in July 2027, where a substantial amount of office space has already been placed under offer, highlighting continued demand for upcoming Grade A developments.
Office rents reach a stable phase
Average office rents remained unchanged at Dh238 per square foot during the second quarter, marking the first period without rental growth since the first half of 2021.
Savills said the stabilisation does not signal a market downturn but instead reflects a transition towards a more balanced and sustainable phase following years of rapid rental increases. Limited availability of Grade A office space continues to support rental levels and maintain landlords’ pricing strength.
“After several years of exceptional leasing momentum and significant rental growth, Dubai’s office market is now moving towards a more balanced environment,” said Toby Hall, Head of Commercial Agency at Savills Middle East.
“While businesses are taking longer to assess their requirements, demand for premium office spaces remains strong, especially within the Grade A segment,” he added.
Savills expects office leasing activity to gradually improve in the second half of 2026 as postponed requirements return to the market.
Around 1.9 million square feet of office space is expected to be completed this year, while the total development pipeline could exceed 4.2 million square feet by 2030. However, much of the upcoming Grade A space is likely to be leased in advance or quickly taken up by existing demand, reducing its immediate effect on market conditions.
The consultancy forecasts that demand will remain particularly strong from sectors including financial services, technology, trading and professional services, supported by Dubai’s diverse economy, global business appeal and limited availability of premium office space.
