Dubai office market to face shortage till 2027-28 as demand outpaces supply

Dubai office market – which boasts of one of the highest occupancy rates globally – is expected to remain undersupplied until 2027-2028, say real estate consultants.

According to Cushman & Wakefield Core, the amount of new office supply is expected to double in 2025 compared to 2024 – by 1.66 million sqft – but the market is expected to remain undersupplied until 2027-2028.

The financial free zone DIFC will add nearly one-third of the total city-wide office supply over the next three years – most of which is expected to be pre-leased due to unrelenting demand, it added.

Dubai holds second-highest global office occupancy levels at 92 per cent and it is expected to exceed 94 per cent by the end of 2025, it added.

Prathyusha Gurrapu, director and head of research and consultancy at Cushman & Wakefield Core, said office rents surged by 22 per cent year-on-year in 2024, with further increases of 10-12 per cent forecast for 2025. Demand has been outpacing supply, thanks to the growth of new businesses and the inflow of foreign companies into Dubai – a trade, tourism and financial hub of the region.

“We’re seeing an incredible surge in demand for office space in Dubai, with more companies entering the market and existing tenants looking to expand,” said Robert Thomas, Head of Agency at Cushman & Wakefield Core.

“While the supply pipeline is stronger this year, much of it is pre-leased or focused in specific free zones, which is adding to the pressure. Many clients are now taking a strategic approach – maximising the use of their existing spaces or exploring newer zones like Dubai CommerCity and Expo City Dubai to meet their needs,” he said.

Real estate consultancy Savills said Dubai’s commercial real estate market maintained strong momentum in 2024, with significant growth recorded across both the office and industrial sectors.