Dubai office rents: Grade B up 31.5% as vacancy falls to 6.1%
Grade B office rents in Dubai jumped 31.5% in a year, with Grade A and prime adding 14–26%. Citywide vacancy has dropped to a record-low 6.1%. What the office squeeze means for commercial property investors — and for residential demand.
Dubai's office market has become a landlord's market in the purest sense. Grade B rents rose 31.5% year on year — the sharpest move of any segment — while Grade A and prime buildings added 14–26%. Citywide vacancy has fallen to 6.1%, a record low at which tenant choice effectively disappears.
Why Grade B is outpacing prime
In a normal growth cycle the best product appreciates first. Here it is the reverse, and that is the telling detail. The prime towers in DIFC and along Sheikh Zayed Road filled up over the past two years — there is little room left for them to grow except on lease renewals. The new demand — mid-sized companies opening in the emirate in large numbers — finds prime either full or over budget, and lands in Grade B. A segment that spent years as a quiet backwater with moderate rents got the steepest repricing.
- +31.5% — Grade B rental growth over the year.
- +14–26% — Grade A and prime.
- 6.1% — vacancy: a technical minimum at which the market is essentially full.
Where the demand comes from
No mystery: new company registrations in Dubai are running at record pace, and every company eventually needs a physical office — for the licence, for hiring, for bank compliance. New office construction cannot keep up: an office tower's development cycle is three to four years, so space conceived in response to today's shortage will not reach the market before 2028–2029.
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What it means for an investor
- Offices are back on the menu. For years the private investor in Dubai looked only at apartments. At 6.1% vacancy and double-digit rent growth, office units in Business Bay, JLT and Barsha Heights produce yields worth comparing against residential.
- Residential benefits too. Every new office means employees who need housing within half an hour of work. The office squeeze in the centre props up rents in Business Bay, Downtown and along the metro's Red Line.
- Mind the horizon. A 31.5% annual jump does not repeat forever: some demand will inevitably migrate into new office supply. Buy an office for its current cash flow, not for an extrapolation of this year.
Based on brokerage reviews of the Dubai office market for the first half of 2026.