In the first quarter of 2025, Dubai’s office sales reached an impressive AED2.8 billion (approximately $762 million), signaling a robust upturn in the real estate sector. This surge is significantly attributed to the dramatic rise in off-plan transactions, which skyrocketed by a staggering 741%. As more investors flock to this vibrant market, the data illustrates Dubai’s sustained allure as a prime destination for business investment and office space acquisition.
According to the latest market intelligence from Cavendish Maxwell, the Q1 performance not only showcases an 83% year-on-year increase in sales value but also a 24% rise in transaction volume, underscoring Dubai’s status as a global business hub.
Off-plan transactions, in particular, have become a key driver of this growth, with their value increasing nearly eight-fold from AED100 million ($27 million) the previous year to AED800 million ($218 million) this quarter. As these off-plan sales accounted for 18% of total transactions—up from just 8% in Q1 2024—the shift illustrates growing investor confidence in future developments.
Market Dynamics and Investor Confidence
Vidhi Shah, Director and Head of Commercial Valuation at Cavendish Maxwell, remarked, “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.” This sentiment is echoed by a nearly 40% increase in foreign company registrations compared to the same quarter last year, reflecting heightened investor enthusiasm and a burgeoning demand for office space.
Shah further explained that the surge in off-plan deals is driven by several factors: buyer trust in upcoming developments, competitive launch prices, flexible payment arrangements, and the promise of long-term capital appreciation. As rental costs rise and with a limited supply of existing properties, many tenants view purchasing as a strategic long-term investment.
Trends in Office Sales and Rentals
While off-plan transactions are on the rise, ready office units still dominate sales, accounting for the majority of transactions. Notably, office sales prices increased by 24.5% year-on-year and 6.5% quarter-on-quarter, with the average price reaching AED1,650 ($449) per square foot by March 2025. Likewise, rental rates followed a similar upward trajectory, climbing 24% annually and 6.7% compared to Q4 2024, placing average office rents at AED160 ($43.5) per square foot.
The market witnessed significant regional growth, with Downtown Dubai emerging as a leader in annual price increases, showing nearly 40% growth, closely followed by DIFC at 39% and Barsha Heights at 38%. The availability of Grade A offices remains limited, driving increased demand for lower-tier office spaces.
Transaction Volumes and Future Supply
Business Bay led transaction volumes in Q1 2025, recording 316 deals, while Jumeirah Lakes Towers and Motor City followed with 222 and 130 transactions, respectively. Data also revealed the most sought-after office sizes were between 1,000 and 2,000 square feet, representing 48% of all sales, while smaller units under 1,000 square feet made up 40%.
As of Q1 2025, Dubai’s total office inventory reached 9.3 million square meters of gross leasable area (GLA). With an additional 215,000 square meters set to hit the market by year-end and another 181,000 square meters expected in 2026, much of this new supply will reside in prime business areas and is classified as Grade A. This increase may help alleviate current supply shortages and stabilize prices in the future.
Shah concluded, “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.” This projection hints at a promising future for Dubai’s office market, where demand continues to soar and investor confidence remains unwavering.