Dubai office leasing remains resilient in Q3 2026 as occupiers prioritise quality, says Savills
(MENAFN- Savills) Dubai's office market maintained steady leasing activity during the third quarter of 2026, recording approximately 20,200 rental transactions, according to the latest Dubai Office Market in Minutes report from Savills Middle East.
While transaction volumes declined by 8% quarter-on-quarter, activity remained broadly consistent with levels recorded over the past year, supported by corporate relocations, lease renewals and continued demand for well-located, high-quality office space.
New leases accounted for 51% of transactions during the quarter, compared with 49% for renewals, reflecting continued occupier activity alongside a stable base of existing tenants.
Demand remained concentrated in smaller office units, with spaces below 1,000 sq ft accounting for 66% of all rental transactions. Offices measuring less than 500 sq ft represented 40% of activity, highlighting sustained demand for smaller, flexible workspaces.
Average market rents remained stable at approximately AED 241 per sq ft during Q3 2026, although rental levels continued to vary considerably across Dubai's established and emerging business districts.
Prime locations such as DIFC, Downtown Dubai and Business Bay continued to attract occupier interest, particularly from businesses seeking quality office accommodation, accessibility and proximity to key commercial hubs.
Corporate relocations remained a key driver of leasing activity, with Savills recording requirements exceeding 30,000 sq ft during the quarter.
Demand for Grade A office space continued to be supported by interest from international businesses, including fintech firms and Chinese companies. Occupiers also demonstrated greater selectivity, placing increased emphasis on location, building quality, cost efficiency and sustainability credentials.
Toby Hall, Head of Commercial Agency at Savills Middle East, commented, "Dubai's office market continues to demonstrate resilience, with occupier demand remaining active despite a more measured pace of leasing activity during the quarter.
We're seeing businesses take a more considered approach to their office requirements, with location, connectivity and building quality playing an increasingly important role in decision-making. Well-located Grade A buildings, particularly those offering strong transport links and modern amenities, continue to attract interest from both established occupiers and businesses looking to expand their presence in Dubai.
Looking ahead, the quality and suitability of new office supply will be important in meeting evolving occupier requirements, particularly as businesses place greater emphasis on long-term operational efficiency and workplace experience."
Dubai's office development pipeline is expected to deliver approximately 20.4 million sq ft of gross leasable area between 2026 and 2030, with a more significant increase in supply anticipated from 2028 onwards.
Strata-owned developments are expected to account for 86% of new supply in 2028 and 78% in 2029, potentially increasing the availability of smaller, individually owned office units.
However, the pipeline is expected to shift towards predominantly single-owned developments by 2030, which could provide additional options for larger corporate occupiers.
Savills expects Dubai's office market to maintain steady occupier demand through the remainder of 2026, supported by corporate relocations, regional business expansion and continued interest in established commercial locations.
Prime, well-connected and sustainability-focused buildings are expected to remain particularly attractive, while secondary assets may experience longer leasing periods as occupiers become increasingly selective.
While transaction volumes declined by 8% quarter-on-quarter, activity remained broadly consistent with levels recorded over the past year, supported by corporate relocations, lease renewals and continued demand for well-located, high-quality office space.
New leases accounted for 51% of transactions during the quarter, compared with 49% for renewals, reflecting continued occupier activity alongside a stable base of existing tenants.
Demand remained concentrated in smaller office units, with spaces below 1,000 sq ft accounting for 66% of all rental transactions. Offices measuring less than 500 sq ft represented 40% of activity, highlighting sustained demand for smaller, flexible workspaces.
Average market rents remained stable at approximately AED 241 per sq ft during Q3 2026, although rental levels continued to vary considerably across Dubai's established and emerging business districts.
Prime locations such as DIFC, Downtown Dubai and Business Bay continued to attract occupier interest, particularly from businesses seeking quality office accommodation, accessibility and proximity to key commercial hubs.
Corporate relocations remained a key driver of leasing activity, with Savills recording requirements exceeding 30,000 sq ft during the quarter.
Demand for Grade A office space continued to be supported by interest from international businesses, including fintech firms and Chinese companies. Occupiers also demonstrated greater selectivity, placing increased emphasis on location, building quality, cost efficiency and sustainability credentials.
Toby Hall, Head of Commercial Agency at Savills Middle East, commented, "Dubai's office market continues to demonstrate resilience, with occupier demand remaining active despite a more measured pace of leasing activity during the quarter.
We're seeing businesses take a more considered approach to their office requirements, with location, connectivity and building quality playing an increasingly important role in decision-making. Well-located Grade A buildings, particularly those offering strong transport links and modern amenities, continue to attract interest from both established occupiers and businesses looking to expand their presence in Dubai.
Looking ahead, the quality and suitability of new office supply will be important in meeting evolving occupier requirements, particularly as businesses place greater emphasis on long-term operational efficiency and workplace experience."
Dubai's office development pipeline is expected to deliver approximately 20.4 million sq ft of gross leasable area between 2026 and 2030, with a more significant increase in supply anticipated from 2028 onwards.
Strata-owned developments are expected to account for 86% of new supply in 2028 and 78% in 2029, potentially increasing the availability of smaller, individually owned office units.
However, the pipeline is expected to shift towards predominantly single-owned developments by 2030, which could provide additional options for larger corporate occupiers.
Savills expects Dubai's office market to maintain steady occupier demand through the remainder of 2026, supported by corporate relocations, regional business expansion and continued interest in established commercial locations.
Prime, well-connected and sustainability-focused buildings are expected to remain particularly attractive, while secondary assets may experience longer leasing periods as occupiers become increasingly selective.
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