4 September 2026
Dubai's office market saw rents ease in Q2 2026, but the broader market remains resilient. With limited completed supply and a significant portion of new supply scheduled for 2028, the next phase will depend on demand, delivery timing and asset-level performance.
Dubai's average office rent closed Q2 2026 at AED 203.8 per square foot per year. This was 2.15% below the previous quarter and 3.5% below the Q4 2025 peak of AED 211.3.
Viewed in isolation, two consecutive quarters of easing may appear to signal a change in direction. The broader evidence, however, points to a market recalibrating rather than reversing.
Rents remained 6.9% higher year-on-year and 3.4% above the 2025 full-year average of AED 197.0 per square foot per year. They were also 102.7% higher than five years earlier.
In my view, this is the central tension shaping Dubai's office market: rental acceleration has paused, but the conditions required to establish a long-term reversal are not yet evident.
A different phase, not necessarily a weaker market
The latest quarterly movement matters because it suggests that occupier affordability and rental expectations are beginning to meet after several years of sustained repricing. It should not, however, be treated as evidence that the market's longer-term strength has disappeared.
Dubai office rents recorded cumulative growth of 30.7% over two years, 57.0% over three years, 85.1% over four years and 102.7% over five years. The five-year movement equates to annualised growth of approximately 15.2%.
These are leasing-rate movements, not measures of capital-value appreciation. They also represent a Dubai-wide average and should not be assumed to apply equally to every building, office grade or location.
The next few quarters will therefore be more informative than the Q2 decline alone. They will indicate whether rents are moving towards a more sustainable level, whether occupier demand can support the market's elevated rental base and how performance begins to diverge among individual assets.
Occupiers are looking beyond the headline rent
The report describes a market supported by sustained demand and limited supply, but it does not publish vacancy, take-up or leasing-volume figures. Demand conditions should therefore be interpreted carefully.
From a commercial-leasing perspective, occupiers rarely make decisions based on the headline rent alone. Location, accessibility, building quality, floorplate efficiency, parking, amenities, operating costs and lease flexibility all contribute to the total occupation decision.
This becomes especially important when suitable office space is limited. An efficient, well-connected building may justify a stronger rental position where the space supports employee access, productivity and operational requirements. Conversely, an older or less efficient asset may struggle to justify the broader market average without investment in its positioning and specification.
The market may consequently become more selective even if overall rental conditions remain resilient. Well-positioned buildings can continue attracting competition, while secondary assets may face greater pressure to demonstrate value.
Limited stock remains the defining constraint
The more consequential market issue is supply.
No new office space was completed between April and June 2026, leaving Dubai's standing office stock at approximately 11.32 million square metres at quarter-end.
Completed stock increased from approximately 11.15 million square metres in 2021 to 11.32 million in 2025. Across those four years, Dubai added only 169,244 square metres of office space, equivalent to compound annual stock growth of approximately 0.38%.
Rental growth and stock growth cover different measurement periods, but their divergence is still instructive. Rents more than doubled over five years while the completed market expanded only modestly.
This does not prove that restricted construction was solely responsible for every rental movement. It does show why limited availability has remained an important part of the market's pricing environment.
The pipeline offers relief - but not immediately
Dubai has 560,608 square metres of office supply scheduled through 2028. This represents approximately 5.0% of Q2 2026 standing stock.
The delivery programme comprises 144,676 square metres scheduled for 2026, 155,301 square metres for 2027 and 260,631 square metres for 2028. If the complete pipeline is delivered, Dubai's office stock could reach approximately 11.88 million square metres.
The keywords are 'scheduled' and 'if.'
Pipeline space is not the same as completed or immediately occupiable space. Project execution, construction timelines and handovers will determine when individual developments genuinely become available.
Timing is particularly significant because approximately 46% of the scheduled pipeline is concentrated in 2028. Near-term supply relief therefore remains comparatively modest, with the larger market test weighted towards the final year of the programme.
When that stock begins to materialise, the question will not simply be how many square metres are delivered. The quality, location, specification and timing of the projects - and the market's ability to absorb them - will determine their practical effect.
What the next phase means for stakeholders
For occupiers, limited near-term availability makes forward planning important. Lease expiries, renewal negotiations, relocation requirements and total occupancy costs should be assessed early, particularly where the business requires high-quality or location-specific space.
For landlords, constrained supply may continue supporting rental income, but it should not encourage unrealistic assumptions. Tenant retention, building management, operational efficiency and targeted upgrades will become more important as occupiers grow selective and newer stock enters the market.
For developers, the pipeline creates an opportunity as well as an execution test. Delivery timing, product differentiation and realistic absorption assumptions will matter more than headline supply figures.
Investors and financial institutions should distinguish market momentum from asset-specific fundamentals. Sustainable rent, tenant quality, lease structure, capital expenditure requirements, building competitiveness and exit liquidity cannot be understood through a marketwide rental average alone.
An independent valuation can test these factors against relevant leasing evidence, rather than relying on the assumption that recent market growth will continue unchanged.
A market moving towards greater selectivity
Dubai's office market is not entering this phase from a position of oversupply. Rents remain above both their prior-year level and the 2025 full-year average, while completed stock has expanded slowly and much of the future pipeline is weighted towards 2028.
At the same time, two quarters of rental easing should not be dismissed. They indicate that affordability, occupier expectations and building-level differentiation are becoming more influential.
The outlook will depend on actual project delivery, the persistence of occupier demand, the market's response to elevated occupancy costs and the performance of individual locations and buildings. Scheduled supply may eventually alter the balance, but only as projects move from pipeline to completion.
The next stage of Dubai's office-market evolution will therefore require greater discipline: realistic rental assumptions, a clear understanding of occupier requirements, careful assessment of delivery risk and evidence-led valuation.
The market remains resilient, but resilience should not be confused with uniform performance. As performance becomes increasingly asset-specific, quality and commercial relevance will matter more than the market's headline direction.
Key Takeaways
- Dubai recorded 81,839 residential transactions worth AED 225.7 billion in H1 2026.
- Off-plan apartments continued to show stronger activity than ready resale.
- Off-plan accounted for 73.8% of transaction volume and 74.5% of value.
- Supply and actual delivery are key risks for H2 2026.
- Developers and financiers should monitor construction progress and handovers.
- Investors should assess liquidity by property type, location, price band and completion status.
- H2 decisions should be based on scenarios rather than a single market forecast.
