UAE Office Market Q2 2025: Tight Supply, Rising Rents, and Landlord Advantage
The UAE’s office market in Q2 2025 continues to be defined by record-low vacancies, surging prime rents, and limited Grade A supply, creating highly favorable conditions for landlords in both Dubai and Abu Dhabi, according to JLL’s latest UAE Office Market Report for Q2 2025.
Key Market Highlights – Q2 2025
- Dubai
- Citywide vacancy rate: 7.7% (Prime: 0.3%)
- Prime rents: AED 359/sq.ft/year (+17.3% YoY)
- Grade A rents: AED 238/sq.ft/year (+19.5% YoY)
- New lease registrations down 27.6% YoY due to limited supply.
- Abu Dhabi
- Citywide vacancy rate: 1.5% (Prime: 0.1%)
- Prime rents: AED 2,905/sq.m/year (+31.5% YoY)
- Grade A rents: AED 1,676/sq.m/year (+7.8% YoY)
- No significant new Grade A supply expected until early 2026.
Demand Outpacing Supply
Vacancy rates in both cities are at multi-year lows, with prime office space almost fully occupied. This has led to:
- Early lease renewals becoming the norm (Dubai renewals +8.3% YoY, Abu Dhabi +0.8% YoY).
- Increased competition for the limited number of premium spaces.
- Opportunistic pricing by landlords, pushing rents beyond tenant budgets.
Rental Trends: Upward Momentum
Both markets have seen double-digit rental growth across most asset grades:
- Dubai Grade C: +22.9% YoY, showing that demand is spilling over into secondary space.
- Abu Dhabi Prime: Outperforming all categories with over 30% annual growth.
Limited New Supply Until 2026
The report highlights that the short-term pipeline remains modest:
- Dubai: ~33,000 sq.m of new space in H2 2025 (majority Grade A to come in 2026–2027, mostly in DIFC).
- Abu Dhabi: ~66,000 sq.m of new space in H2 2025, mainly Grade B.
Opportunities in Off-Plan Commercial Investments
With Grade A and prime office space in short supply, savvy investors are increasingly looking toward off-plan commercial developments that will meet future demand. Projects such as Burj Capital and Capital One offer competitively priced commercial spaces in strategic business hubs, while LUMENA by Omniyat brings an iconic architectural presence to Business Bay. Eaton Square by Ellington Properties blends premium design with high-yield potential, catering to Dubai’s growing demand for prestige office addresses. Investing early in these developments allows buyers to secure attractive entry prices, benefit from phased payment plans, and position themselves ahead of anticipated rent growth when these projects complete.
Market Outlook: Landlords Hold the Leverage
According to JLL, with demand consistently outpacing supply in the Prime and Grade A segments, landlord-favorable conditions are set to persist. Expect:
- Continued rental growth, though at a potentially slower pace due to tenant price sensitivity.
- Competitive bidding for premium space.
- Stronger emphasis on early renewals and long-term commitments.
Why This Matters for Occupiers & Investors
- Occupiers: Plan renewals early, lock in favorable terms, and be prepared for higher rental outlays.
- Investors/Landlords: Opportunity to capitalize on rental growth and limited Grade A competition — with off-plan commercial projects offering a way to secure tomorrow’s most desirable addresses at today’s prices.
📩 Looking to secure the best office space or investment in Dubai or Abu Dhabi? Contact Unwind Properties today for a consultation and discover the most strategic opportunities in the UAE’s booming office market.
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