The Dubai office real estate market has experienced significant growth in the first quarter of 2025, with sales reaching an impressive AED 2.8 billion (approximately $762 million) across 933 transactions. This surge, highlighted by an extraordinary 741% increase in off-plan transactions, underscores Dubai’s status as a thriving business hub. The latest insights from Cavendish Maxwell reveal a robust trajectory for office sales, bolstered by rising investor confidence and the appeal of off-plan properties.
Record Growth in Office Sales
In Q1 2025, the performance of Dubai’s office market showcased an 83% increase in sales value year-on-year, accompanied by a 24% rise in transaction volume. This substantial growth solidifies Dubai’s position among the world’s most dynamic destinations for business activities.
Although ready office units still dominate the sales landscape, the performance of off-plan transactions is noteworthy. The total value of off-plan sales surged to AED 800 million ($218 million), a significant leap from AED 100 million ($27 million) during the same quarter the previous year. This remarkable shift accounts for 18% of total sales, up from just 8% in Q1 2024, illustrating a growing trend in the market.
Factors Driving Off-Plan Transactions
According to Vidhi Shah, Director and Head of Commercial Valuation at Cavendish Maxwell, “These record-breaking figures speak for themselves. Dubai continues to enhance its position as a global business hub and a magnet for businesses large and small.”
The impressive uptick in off-plan deals can be attributed to several factors. Increased buyer confidence, competitive pricing at launch, flexible payment options, and the prospect of long-term capital appreciation are driving this demand. With limited supply and rising rental costs, many tenants are now viewing buying as a strategic move for long-term savings.
Shah further notes, “Ready offices still account for the majority of sales, but it is clear that off-plan properties are very much in demand, and we expect this trend to continue throughout 2025 and beyond.”
Market Dynamics and Price Trends
Office sales prices increased by 24.5% year-on-year, with the average price reaching AED 1,650 ($449) per square foot by March 2025. Similarly, rental rates rose 24% annually, averaging AED 160 ($43.5) per square foot, driven by increasing demand.
Areas such as Downtown Dubai, with prices soaring almost 40%, and DIFC and Barsha Heights, with rises of 39% and 38% respectively, led the market in annual growth. Demand for Grade A office space has further elevated prices across lower-tier office segments, prompting a shift toward B and C grade inventory.
Transaction Volume and Future Projections
Business Bay registered the highest transaction volume in Q1 2025, with 316 deals, followed by Jumeirah Lakes Towers (222) and Motor City (130). Offices between 1,000 and 2,000 square feet experienced the highest demand, accounting for 48% of all sales. Meanwhile, smaller units under 1,000 square feet made up 40% of transactions.
As of Q1 2025, Dubai’s total office inventory stood at 9.3 million square meters of gross leasable area (GLA), with an additional 215,000 square meters projected to enter the market by year-end and 181,000 square meters scheduled for delivery in 2026. Much of this forthcoming stock is positioned in core business districts, classified as Grade A, which may alleviate current supply challenges within the next two years.
Shah concluded: “Much of the new supply is concentrated in core business districts, with a significant proportion in the A-grade category. With a strong development pipeline over the next three years, we expect the current supply-demand imbalance to narrow, bringing some relief to tenants and easing upward pressure on prices.”