An office is not a "commercial apartment". Its logic is different: income is counted from the rental flow rather than from the floor area, the exit price comes off a capitalisation rate, and half the outcome is decided by whether the space is ready or still needs fitting out. Below is how that is modelled, and what the real numbers show.
Investor interest in offices became visible in the transaction statistics. Purchases of office space above AED 10m rose from 27 in the first half of 2024 to 83 in the first half of 2025 — a record for the whole observation period.
On prices the picture is this. Off-plan offices without fit-out sold at an average of AED 1,400 per square foot, adding 22% over the year. Completed space on the secondary market runs AED 2,500–3,500 per foot. The dearest is Downtown Dubai, where the average sale price passed AED 5,000 per foot in the first half of 2025. The second dearest submarket is Business Bay, appreciating at a compound 21.2% a year since 2020.
Dubai Land Department, H1 2025 · Dubai Land Department, H1 2024
It is worth looking separately at what is being built. In Business Bay more than 1.3m sq ft of offices is going up on a build-to-sell model — for the retail investor, floor by floor and block by block. In DIFC the opposite dominates: build-to-rent, with the developer keeping the building for the rental flow. That says a good deal about where private-buyer demand is expected, and where the rent is considered good enough not to share.
The framework is simple and works on any property, not only an office. Five steps, in this order.
An office works in three modes: cash flow — steady rent every year; capital growth — price appreciation over three to five years; hybrid — both. The answer drives everything else, including the district.
It comes down to two numbers: what a square foot costs to buy and what it earns in a year. Everything else is derived from that pair.
Fitted is ready and lets immediately. Shell & core is a concrete box and needs fitting out. Need income quickly — buy fitted. Want it cheaper — buy shell & core, but budget the capex and four to six months with no tenant.
High ceilings, fast lifts, a decent lobby, parking, a management company that functions. Those are what decide both the letting and the resale.
Exit price = annual income ÷ 8%. Eight per cent is the market cap rate for Grade A offices; it is the standard way to work out what the asset is worth in five years.
Entry price data — Dubai Land Department, Q4 2025
Below are three real projects computed by one method: entry price, the 4% Land Department fee, the fit-out budget, annual net income and an exit in five years at a capitalisation rate. The spread in the result — from 4% to 12.1% IRR — is the main conclusion: the return is made not by the developer's name but by the combination of entry price, fit-out and when the rent starts.
A low price per foot and a high return, but budget four to six months and a separate line for the fit-out.
A high entry threshold and a weak return from conventional letting. It starts to make sense as a co-working floor or with one large tenant in it.
The most efficient of the three over five years: low entry, no fit-out, rent starts the moment the keys change hands.
Entry prices and fees — Dubai Land Department, Q4 2025. In all three models the rent starts in year four: that is the projects' handover date, not a property of the format. The return itself is computed on an assumption about the rent three years out — an assumption, not a fact — so read the models as an illustration of the mechanics rather than as a forecast.
The sale price in five years comes off the income, not off "what you paid plus inflation". There is one formula: divide the annual net income by the capitalisation rate. For Grade A offices 8% is the market benchmark.
Exit price = annual NOI ÷ 8%
Two things follow that are usually missed. First: any increase in the rent is multiplied by 12.5 in the value of the asset — which is why the quality of the tenant and the length of the lease are worth more than they look. Second: the cap rate is a market variable, and if it moves from 8% to 9% the exit price falls by around 11% with the rent unchanged. A model in which the cap rate is fixed forever is not a calculation but a hope.
The claim that "an office yields 10–12% against 4–7% for residential" belongs to the end of 2025, and it conveys the direction correctly: the shortage in commercial is sharper than in housing, and the tenant there pays more for the same square foot. But that yield has a different price.
An office is harder to re-let: there are fewer tenants in the market than there are residential renters, and a void is measured in months rather than weeks. A fit-out done for one tenant may not suit the next. The entry cheque is larger and the liquidity lower — a block at AED 27m sells fundamentally more slowly than a million-dirham studio. So an office is a capital-management instrument over five years and more, not a way to park money quickly.
Investing in DIFC offices, the AHS Office Tower, Lumena Alta by Omniyat, and why an investor takes an office instead of an apartment.
7:59Investing in Dubai offices: why the numbers beat apartments
0:36AHS Office Tower, DIFC: the two-minute version
21:45Furnished offices in Business Bay: Rove HQ and the fitted-office model
10:32Lumena Alta by Omniyat: Dubai’s most luxurious office tower
1:15Binghatti Circle in JVC: retail and offices at the entry levelOff-plan offices without fit-out sold at an average of AED 1,400 per square foot — up 22% in a year. Completed space on the secondary market is substantially dearer at AED 2,500–3,500 per foot. In Downtown Dubai the average sale price passed AED 5,000 per foot in the first half of 2025.
Offices are quoted at 10–12% a year against 4–7% for apartments. Those are modelled figures on specific projects, not a market average. Check them yourself: the yield rests entirely on the rent that will exist three years out, at handover.
The standard method: divide the annual net income by the capitalisation rate. For Grade A offices 8% is the accepted market benchmark. So an office producing AED 800,000 a year is valued at roughly AED 10m on exit. The cap rate is a market variable, and a move in it shifts the exit price harder than the rent does.
The Land Department fee of 4% of the price, broker commission of 2% plus VAT, and registration fees. For shell & core, add the fit-out: in the models below that is AED 620,000 on a 1,550 sq ft block and AED 2m on a 5,000 sq ft one. Fit-out costs are not covered by a mortgage and are paid separately.
Yes, commercial mortgages exist, but the terms differ from residential: lower LTV, a shorter term, a higher rate and stricter requirements on the borrower. The bank looks at the rental flow of the asset and at the buyer’s business.
Send me the project and the price — I will build the five-year model with the fit-out, the service charge and the exit rate in it, and show where the developer's version is optimistic.
