Dubai office values surged as investors targeted prime assets

• Average office sales prices in Downtown Dubai climbed 29% year-on-year to AED 5,130 psf in 2025
• The number of AED 10 million+ office transactions reached 167 in 2025, a 114% year-on-year increase
• Around 24.2 million sqft of new office space was scheduled for delivery between 2026 and 2030
• DIFC’s pipeline totals 7.7 million sqft to 2040, reinforcing its role as the region’s leading financial hub

Dubai | 15 April 2026: Prior to the regional conflict, office values continued to rise across all of Dubai’s major submarkets in the second half of 2025, led by Downtown Dubai, where average sales prices hit AED 5,130 psf – a 29% increase on the AED 3,986 psf achieved at the end of 2024, according to the Dubai Office Market Review for H2 2025 from global property consultancy Knight Frank. This rapid appreciation was underpinned by a surge in high-value transactions, with 167 assets changing hands for more than AED 10 million in 2025, representing a 114% year-on-year increase and underlining the depth of capital that targeted prime income-producing assets in the city.

Faisal Durrani, Partner – Head of Research, MENA, said: “Prior to the regional conflict, Dubai’s office market had firmly established itself as one of the most dynamic and resilient in the region, with investors increasingly focused on well-located, income-generating assets. The near-tripling in AED 10 million+ transactions between 2023 and 2025 underscored the depth of capital targeting Dubai and reflected a strong belief in the city’s long-term economic and real estate fundamentals. The underlying structural drivers supporting this trajectory remain largely intact, and we continue to monitor how the market responds as the situation evolves.”

QUALITY IN DEMAND

Whilst market dynamics had led to increasing costs, prior to the conflict, we saw businesses in the region expand their footprint. We also noted that businesses were willing to pay a premium for good-quality and efficient floor space. Access to infrastructure such as the metro and good surrounding F&B was applying a premium to office space. As more flexible work conditions become the norm, businesses had begun to view their office as a ‘showroom’ for talent, and this trend was widely expected to continue.

Adam Wynne MRICS, Partner – Head of Commercial Agency, UAE added: “Prior to the regional conflict, offices were operating at or near full occupancy with very limited vacancy and, as demand continued to outpace supply, both capital values and rents had naturally increased quarter-on-quarter and year-on-year, a trend that had persisted since 2020. Anecdotal evidence so far suggests that most international occupiers remain committed to their existing leases and their presence in the region.”

DEMAND ANCHORED BY FINANCE AND TECHNOLOGY

On the demand side, as observed prior to the conflict, leasing activity had been primarily driven by banking & finance (32.5%) and technology (23.1%), which together accounted for over half of all new office space requirements in H2 2025. These occupiers showed a strong preference for grade-A office space in premium locations.

Durrani added: “The diverse sectoral demand mix was reinforcing the shift towards high-quality, efficiently designed space that can support talent attraction, client engagement and modern workplace strategies. The emphasis on grade-A buildings was also sharpening the divide between new and older stock, with well-specified developments in key locations having emerged as clear beneficiaries.”

WAVE OF NEW SUPPLY

A significant wave of new office supply was scheduled for delivery between 2026 and 2030, totalling around 24.2 million sqft across Dubai, notwithstanding any potential construction delays due to the regional conflict. This pipeline was strategically aligned with demand trends and was expected to help moderate both price and rental growth, contributing to a more balanced market environment over the medium term, says Knight Frank.

Future supply was heavily concentrated in Dubai’s prime office districts, directly targeting areas with the strongest demand. The DIFC alone had a pipeline of 7.7 million sqft planned for delivery by 2040, reinforcing its status as the region’s leading financial hub. Notably, this pipeline was almost entirely build-to-rent, catering specifically to the financial and professional services firms that dominate leasing demand within the free zone and underlining a long-term, income-focused approach by developers and landlords.

CORE DISTRICTS WITH SUPPLY PIPELINE

Key submarkets with sizable pipelines that was scheduled for delivery by 2030 included Business Bay (4.6 million sqft), Meydan City (3.8 million sqft), the DIFC (3.4 million sqft), and Jumeirah Lake Towers (2.6 million sqft). Collectively, these four core districts accounted for the majority of future office supply, ensuring that new, high-quality stock was being delivered in locations where corporate occupier and investor demand was strongest.

Business Bay stands out in particular, with 100% of its under construction pipeline designated as build-to-sell. This provided investors with opportunities to gain exposure to Dubai’s office market in a district that benefited from strong connectivity and proximity to Downtown Dubai, while also complementing the predominantly build-to-rent nature of the pipeline in the DIFC and other prime locations.

Wynne concluded: “Prior to the escalation of regional tensions, we had not anticipated any significant shift in market dynamics in the short term until the next wave of supply outlined in this report hands over. The key downside risk now lies in a prolonged escalation that disrupts travel flows, capital mobility, or business relocation decisions, and near-term investment activity may slow as investors and occupiers reassess their geopolitical risk tolerances. That said, the structural case for Dubai remains compelling — blue-chip occupiers have remained focused on well-managed, single-owned buildings rather than strata or multi-owned stock, and the fundamental imbalance between supply and demand that has driven growth since 2020 has not gone away.”