UAE Office Market Dynamics, Q2 2025

Tight market conditions characterised by limited availability and increasing rental rates are driving earlier lease renewals, with tenants feeling pressured to make timely decisions. This trend is reflected in office renewal rates, which grew by 0.8% in Abu Dhabi compared to 8.3% in Dubai, during Q2.

In Abu Dhabi, vacancies declined further during Q2. Average city-wide vacancy rates dropped to 1.5%, whilst Prime and Grade A vacancies reached 0.1% and 1.7%, respectively.

Dubai's citywide office vacancy rates decreased to 7.7%, while prime market vacancy remained extremely tight at just 0.3%.

Prime office rents remain significantly higher than Grade A spaces—73.3% more in Abu Dhabi and 50.8% more in Dubai. This price gap is expected to grow as low vacancy rates and high demand push premium office rents even higher.

Abu Dhabi faces a shortage of Grade A office space with no significant new supply expected until early 2026, when the next wave of premium developments will finally be delivered.