Average rents hold steady at AED 238 per sq ft as market shifts focus from rental growth to tenant-led decision-making amid regional uncertainty
Savills Middle East has released its Dubai Office Market report for Q1 2026, revealing that average office rents across the city have stabilised at AED 238 per sq ft, marking the first period since H1 2021 where any quarterly uplift has not been recorded. Despite regional disruption stemming from the conflict that began on 28 February 2026, long-term confidence in the UAE’s office market remains intact.
While rental growth has paused quarter-on-quarter, rents remain 14% higher year-on-year compared with Q1 2025, reflecting the strong upward trajectory seen over the past two years. The slowdown in momentum during the quarter was largely driven by external factors, including broader regional disruption due to the conflict, and seasonal factors including the onset of Ramadan and the Eid holiday period. This led to a temporary slowdown in decision-making, particularly among international occupiers, alongside increased remote working and travel-related disruptions.
Despite this, market sentiment on the ground remains positive. Businesses continue to operate as normal, and occupiers are adopting a measured, wait-and-see approach rather than reacting abruptly. Long-term confidence in Dubai’s office market remains intact, supported by strong underlying fundamentals and a stable regulatory environment.
A notable shift is emerging in occupier behaviour, with the market increasingly defined by tenant strategy rather than rental escalation. RERA-related rental protection and renewal regulations are anchoring many occupiers in place, while others are prioritising tenure security, operational efficiency, and long-term value when making real estate decisions.
Business formation continues to underpin demand. Dubai Chamber of Commerce recorded more than 71,830 new companies joining in 2025, contributing to a steady pipeline of new entrants.
Data from Dubai Land Department and Savills internal records indicate that 97% of all office deals completed in Q1 2026 were for units of 3,000 sq ft or below. This reflects both new market entrants establishing a footprint in Dubai and existing occupiers securing additional satellite offices while retaining current premises under rental protection frameworks.
Looking ahead, the market is expected to gradually transition as new supply is introduced. Approximately 2 million sq ft of office space is scheduled for delivery in 2026, with a further 1.6 million sq ft expected in 2027. As this supply is delivered, availability is likely to increase across select submarkets, potentially easing pricing pressures and creating new opportunities for occupiers.
Savills anticipates that 2026 will be defined less by headline rental growth and more by strategic repositioning within selected submarkets. As new supply is delivered and secondary space is released, tenants in high-cost strata units may pursue space in more established commercial assets, improving operational efficiency and cost certainty. Prime locations, including DIFC One Central, and Business Bay, are expected to remain well supported by demand from financial services, professional services and new corporate entrants.
Toby Hall, Head of Commercial Agency at Savills Middle East said, “The stabilisation of rents in Q1 2026 reflects a market entering a new phase of maturity. After several years of sustained growth, the focus is shifting from rental escalation to occupier strategy, tenure management and long-term value. Despite the regional headwinds, Dubai’s office market fundamentals remain robust, and we expect the city to navigate this period with its characteristic resilience.”
About Savills Middle East:
Savills plc is a global real estate services provider listed on the London Stock Exchange. With a presence in the Middle East for over 40 years, Savills offers an extensive range of specialist advisory, management and transactional services across the United Arab Emirates, Oman, Bahrain, Egypt, and Saudi Arabia. Expertise includes property management, residential and commercial agency services, property and business assets valuation, and investment and development advisory. Originally founded in the UK in 1855, Savills has an international network of over 700 offices and associates employing over 40,000 people across the Americas, UK, Europe, Asia Pacific, Africa, and the Middle East.
