In the second quarter of 2024, Dubai’s office market showcased resilience and growth, indicating a strong economic recovery and high business confidence in the region. JLL’s UAE Real Estate Market Overview highlighted the performance of the country’s office sector driven by a strong economy and diverse demand for quality spaces and sustainability. The office market in Dubai witnessed an increase in office gross leasable area (GLA) with Grade A quality offices being delivered in Umm Ramool.
Despite a slight decline in transaction volume in the commercial real estate market, the office segment in Dubai demonstrated overall growth and resilience. The market saw an increase in office transactions from Q2 2023 to Q2 2024, with a surge in sales value. The supply constraint in the office market has created a seller’s market, with landlords imposing stringent terms on tenants. Business Bay emerged as the top location for office transactions, commanding 43 per cent of all office transactions in Q2 2024.
The average selling price for secondary office spaces in Dubai reached an all-time high in Q2 2024, reflecting strong demand and limited availability of high-quality office spaces. Strong demand and increased leasing activity led to an increase in rents in both Dubai and Abu Dhabi. Average Grade A rents in Dubai’s central business district surged by 15 per cent year-on-year, while in Abu Dhabi, average Grade A rents rose by 10 per cent compared to the previous year.
In the retail market, robust demand for space in well-performing malls led to a surge in rental rates in Dubai and Abu Dhabi. Retail stock remained stable in both cities, with expectations of new completions in the coming months. The hospitality sector also experienced strong growth, with hotel performance figures defying the traditionally slower summer season. Dubai and Abu Dhabi witnessed growth in international visitors and revenue per available room (RevPAR).
The industrial market in the UAE saw the launch of new projects and expansion plans, driven by the demand for quality industrial assets. Warehouse rents in Dubai experienced significant growth, with new plans to deliver additional stock. In Abu Dhabi, the industrial real estate market exhibited positive momentum, with an increase in average warehouse rents. The emergence of pre-leases in Dubai’s office market indicates a shift in tenant behavior towards securing office spaces in advance.
