Dubai offices are being let 12–18 months before the building completes

A practice that was an exception a few years ago has settled into the Dubai office market: companies in finance, consulting and technology sign leases twelve to eighteen months before a building is completed. Not a soft reservation — a contract fixing rate and floor area.

Why a tenant agrees to that

• There is no available quality space. At 2–3% vacancy, waiting for a floor to be released can take indefinitely.
• Rents rise faster than planning horizons. Fixing a price eighteen months ahead when the annual increase is running near a quarter is an economically rational decision, not an act of faith.
• The address is needed in advance. A corporate relocation is planned around a financial year, hiring and licensing — not around a construction handover date.

What it changes in an investor's model

The classic risk in buying an office under construction is the gap between completion and the first tenant: six months to two years of an empty asset carried by the owner. Pre-letting compresses that risk. If a building already has signed leases commencing after handover, cash flow starts on a date rather than "eventually".

That is the single most valuable piece of information available about an office scheme under construction, and it is worth asking for explicitly: how much of the building is pre-let, to whom, and on what terms.

The caution

A pre-let is only as good as the covenant behind it. A lease signed by a well-capitalised regional headquarters and one signed by a two-year-old startup are not the same asset. And pre-letting locks a rate: in a market rising at this pace, a landlord who fixed eighteen months early is receiving below-market rent for the term.

For a buyer that cuts both ways. A fully pre-let building carries less void risk and less upside; a partly let one carries more of both. Which is preferable depends on whether you are buying income or buying growth — and being clear about that before viewing saves a great deal of time.