In 2025, the office markets in Dubai and Abu Dhabi are experiencing unprecedented growth, marked by record sales and a flurry of new developments that are dramatically reshaping their skylines. With rising demand and soaring rents, these urban centers are solidifying their status as attractive hubs for businesses. Knight Frank’s recent H1 2025 Office Market Review highlights key trends and forecasts for the evolving office landscapes in both cities, revealing robust confidence from investors and a dynamic shift in commercial real estate.
Dubai has witnessed a remarkable surge in office transactions, with 83 deals exceeding AED 10 million ($2.72 million) completed in the first half of 2025. This achievement represents a staggering 207 percent increase compared to just 27 transactions during the same period last year.
The Downtown area has emerged as a leader in the market, with average prices climbing above AED 5,000 ($1,361) per square foot. Meanwhile, Business Bay has crossed the AED 2,000 ($544) per square foot milestone for the first time, reflecting a growth of 21.2 percent since 2020.
Dubai’s Office Market Dynamics
In Dubai, off-plan office sales, particularly concentrated in Business Bay, are experiencing a significant uptick. This submarket is poised to deliver over 1.3 million square feet of new office space, underscoring the confidence investors have in the city’s premier financial areas.
The Dubai International Financial Centre (DIFC) remains the most expensive office location in the city, with fitted office spaces averaging AED 400 ($109) per square foot. Strong rental growth has also been observed in areas like The Greens (AED 260/$71 psf), Dubai Design District (AED 280/$76 psf), and Business Bay (AED 251/$68 psf).
Driving this robust demand is the business services sector, which accounts for 38 percent of total demand, followed by technology (31 percent), real estate (12 percent), and banking and finance (10 percent).
Faisal Durrani, Partner – Head of Research at Knight Frank MENA, remarked, “Confidence in Dubai as a global business hub remains exceptionally strong. This is reflected in record low vacancy rates for Grade A stock across the city, which stands in sharp contrast to many other global gateway cities.”
Durrani continued, “The technology and trading systems sector has emerged as a major driver of demand, while sustained activity from financial, real estate, and business consulting firms underscores the city’s appeal to a diverse range of global occupiers.”
As developers seek to capitalize on growing demand, a further 25.2 million square feet of office space is projected by 2030, bringing the total office stock in Dubai close to 148 million square feet. The rise in high-value transactions reinforces the booming office market, with a record 83 sales over AED 10 million noted in H1 2025.
Abu Dhabi’s Rising Office Demand
In Abu Dhabi, office demand has surged past 5 million square feet in the first half of 2025, marking a 110 percent increase year-on-year. The business services sector constituted 32 percent of this demand, with government entities following at 9 percent.
Durrani noted, “New rental contracts in Abu Dhabi have been a primary driver of market activity this year, with transaction volumes experiencing a significant peak in January, signaling fresh demand and business expansion in the UAE capital.”
As with Dubai, record occupancy levels across Grade A stock have led to limited availability in Abu Dhabi, driving up rents for prime office spaces. Musaffah, for instance, saw a 73 percent rise in rents quarter-on-quarter in Q2 2025, followed by Al Bateen (68 percent) and Al Hisn (19 percent). However, some older areas, such as Al Danah (-2 percent) and Al Nahyan (-7 percent), have seen slight declines due to an abundance of secondary stock.
James Hodgetts, Partner – Occupier Strategy & Solutions, MEA, commented, “There is good news on the horizon, with a strong pipeline of high-quality developments poised to be welcome additions to the Abu Dhabi office market.”
He added, “This new supply is likely to help ease current constraints, offering occupiers greater choice and setting new benchmarks for quality, sustainability, and design.”
Upcoming projects such as Aldar’s HB Tower on Yas Island (238,647 square feet) and the Saas Business Tower on Al Reem Island (129,210 square feet) are anticipated to alleviate supply pressures.
According to Shehzad Jamal, Partner – Strategy and Consultancy, MENA, “Demand is expected to remain robust and will likely continue to outpace the delivery of new premium supply for the remainder of the year, fueling further rental growth in the prime segment across Dubai and Abu Dhabi.”
“Pre-leasing activity for landmark projects scheduled for 2026-2028 will be a key indicator of market sentiment. We expect the performance gap between Grade A, well-located assets and older, secondary stock to widen further as the flight-to-quality trend intensifies in the short term.”