Dubai’s office market continued to record strong rental growth during the first quarter of 2026, with demand for workspace remaining resilient despite a slowdown in new leasing activity. According to JLL’s latest Real Estate Market Dynamics report, limited availability in key business districts and sustained occupier demand helped drive rental increases across all office segments.
Original article: Dubai office rents jump 23.4% as demand for premium space accelerates by Arabian Business.
Key Insights:
Limited Supply Continues to Support Rental Growth
One of the defining characteristics of Dubai’s office market remains the limited availability of quality space in established business districts. As demand continues to outpace supply in many areas, rental growth has remained strong across the market.
According to JLL, Grade B office space recorded the highest annual rental growth at 23.4%, followed by Grade A offices at 19% and Prime offices at 17.2%. The performance of the Grade B segment reflects the growing challenge occupiers face in securing space within the city’s most sought-after commercial locations.
Dubai’s total office inventory reached 101.1 million sq ft during the quarter, while vacancy rates remained relatively low at 7.3% citywide and just 0.7% within the Prime segment.
Occupier Demand Remains Resilient
Despite broader regional uncertainty, demand for office space remained relatively robust during the first quarter.
JLL noted that constrained availability in core business districts encouraged some occupiers to consider alternative office categories and locations, contributing to rental growth across multiple segments of the market.
At the same time, new leasing activity moderated. Office rental contract registrations declined by 7.7% year-on-year, while monthly new contracts fell 20.6% in March compared with February. These figures suggest some businesses adopted a more cautious approach to expansion during the quarter.
However, stronger lease renewal activity helped offset the slowdown in new transactions. Renewals increased by 11.2% year-on-year, indicating that many existing occupiers remain committed to maintaining their presence in Dubai despite rising occupancy costs.
Commercial Real Estate Continues to Benefit from Economic Activity
The latest figures highlight the continued strength of Dubai’s commercial real estate market, supported by business activity, population growth and the emirate’s position as a regional hub for international companies.
While leasing activity moderated during the quarter, demand for quality office space remained sufficient to support rental growth and maintain relatively low vacancy levels. This balance between occupier demand and limited supply continues to be a key factor shaping market performance.
JLL also reported resilience within Dubai’s retail sector, where vacancy rates tightened to 4.8% and rental growth remained strongest among super-regional malls.
Looking Ahead
The first quarter of 2026 demonstrated that demand for commercial space in Dubai remains active, even as businesses navigate a more uncertain global environment.
With limited prime office availability and continued demand for high-quality workspace, market fundamentals remain supportive. However, the moderation in new leasing activity suggests occupiers are becoming more selective, making future supply levels and business confidence important factors to watch as the year progresses.
