Dubai’s commercial real estate sector recorded a landmark performance in Q1 2025, with office property sales reaching AED2.8 billion ($762 million) across 933 transactions, according to Cavendish Maxwell. The data reflects an 83% year-on-year increase in sales value, supported by a sharp rise in off-plan deals, sustained foreign investor demand, and escalating rental prices.
Record Surge in Off-Plan Sales Reflects Investor Confidence
While ready units continued to dominate Dubai’s office market, off-plan transactions surged 741% year-on-year, jumping from AED100 million in Q1 2024 to AED800 million ($218 million) in Q1 2025. These now account for 18% of total office transactions, compared to just 8% a year ago.
“Dubai continues to enhance its position as a global business hub and a magnet for businesses large and small,” said Vidhi Shah, Director and Head of Commercial Valuation at Cavendish Maxwell.
She added that the exceptional rise in off-plan activity is due to buyer confidence in new developments, competitive launch pricing, and flexible payment plans. Many tenants are now opting to purchase rather than rent, viewing ownership as a strategic hedge against rising rents and limited Grade A availability.
Shah also noted a 40% increase in foreign company registrations in Q1 2025 versus the previous year, encompassing both multinationals and SMEs, fueling demand for office space across the emirate.
Price and Rental Growth Driven by Limited Supply
Office sales prices climbed 24.5% year-on-year and 6.5% quarter-on-quarter, reaching an average of AED1,650 ($449) per sq ft by March 2025. Rental rates followed suit, rising 24% annually and 6.7% since Q4 2024, with average office rents hitting AED160 ($43.5) per sq ft.
District-wise highlights include:
- Downtown Dubai: Prices surged nearly 40%
- DIFC: Up 39%
- Barsha Heights: Rose by 38%
The limited supply of high-grade inventory is pushing prices up across B and C-grade properties, as demand spills beyond core stock.
Transaction Volumes and Size Preferences
Business Bay led transaction volumes with 316 deals, followed by:
- Jumeirah Lakes Towers (JLT): 222
- Motor City: 130
- Barsha Heights: 88
- Dubai Silicon Oasis: 41
In terms of unit size, offices between 1,000–2,000 sq ft remained most popular, accounting for 48% of transactions. Smaller units under 1,000 sq ft made up 40%, while just 2% of transactions involved spaces over 5,000 sq ft.
Dubai’s total office inventory reached 9.3 million sq m of gross leasable area (GLA) in Q1 2025. An additional 215,000 sq m is expected to enter the market this year, with another 181,000 sq m scheduled for 2026. Much of this pipeline is Grade A stock in core districts, aimed at relieving current supply-demand pressures.
“With a strong development pipeline over the next three years, we expect the current imbalance to narrow, bringing some relief to tenants and easing upward pressure on prices,” Shah added.
