The past few years have been marked by unprecedented growth and dynamism in the UAE commercial real estate market, particularly in Dubai and Abu Dhabi. A central element of this trend is the rapid increase in demand for Class A offices. International companies and the expanding local business community are actively seeking premium spaces, leading to record-low vacancy rates and rising rental prices.

 Why is the Demand for Class A Offices Surging in the UAE?

The rising demand for Class A offices in Dubai and other Emirates is driven by several key factors:

• Economic Boom and Business Influx: The stable UAE economy, favorable legislation, and attractive free zones stimulate the opening of new regional headquarters and branches for international corporations.
• Supply Shortage: Despite planned new developments, the supply of premium offices significantly lags behind demand. Existing key areas such as DIFC, Business Bay, and Downtown Dubai already have occupancy levels approaching 95-100%.
• Global Standards and ESG: Companies are increasingly requiring office spaces that meet the highest standards of quality, sustainability (ESG), and employee well-being, which are defining characteristics of Class A properties.
• Strategic Consolidation: Large corporations are utilizing new developments to consolidate their regional operations into more efficient and high-quality headquarters.

 Key Market Indicators

Market indicators for UAE commercial real estate confirm this trend:

• Occupancy Rate: In Dubai, the office occupancy rate has already reached about 92-98% in key districts. Experts predict that the supply deficit may persist until 2026-2028.
• Rental Rate Growth: Class A office rent is showing significant growth. For example, in 2024, the average increase in rental rates in Dubai was around 25% year-on-year, and up to 44% in some areas like Business Bay.
• Investment Attractiveness: The number of high-value sale-purchase transactions is increasing, indicating the high investment appeal of Class A office assets.

 The Market's Future: New Challenges and Opportunities

The limited availability of Class A office spaces creates opportunities for both property owners and developers:

• Fund Modernization: Owners of lower-grade buildings (Class B and C) are actively considering upgrading their properties to meet modern requirements and increase profitability.
• New Projects: Although new large projects are planned, most of them have a high level of pre-commitment, which maintains market tension until their completion.

For investors and tenants seeking commercial real estate in the UAE, proactive planning and collaboration with experts are critical, as competition for the best spaces remains extremely high.