Businesses Shift to Emerging Dubai Districts Amid Prime Office Space Shortage
Dubai’s central business districts are experiencing a scarcity of high-quality office spaces, prompting companies to explore emerging areas like Expo City and Dubai Science Park. This trend is driven by exceptional demand, leading firms to secure office spaces during the construction phase to ensure access to prime locations.
Adam Wynne, Partner and Head of Commercial Agency at Knight Frank Dubai, observes that businesses are migrating to newer locations offering state-of-the-art facilities and attractive rents. He notes, “Occupiers remain driven by quality, and we are seeing businesses migrate outside of central Dubai to newer locations where office space is available.”
The influx of new businesses into Dubai has led to a surge in demand for A-Grade office spaces, with many areas reaching near-full occupancy. For instance, the Dubai International Financial Centre (DIFC) reported nearly 100% occupancy as of Q4 2024, while 17 Grade-A assets on Sheikh Zayed Road averaged 95.4% occupancy.
In response to the supply-demand imbalance, companies are increasingly securing office spaces during the construction phase. Faisal Durrani, Partner and Head of Research for MENA at Knight Frank, attributes the rising demand to new business entrants and expanding local businesses. He anticipates that rents will continue their upward trajectory, noting that prime rates in the DIFC are still about 50% below 2009 levels.
Looking ahead, Knight Frank projects that Dubai’s prime office supply will reach approximately 8.2 million square feet between 2025 and 2028, an 86% increase compared to the 4.4 million square feet delivered between 2021 and 2024. Key projects contributing to this growth include DIFC Square, Tecom, and Aldar’s new development on Sheikh Zayed Road.
This strategic shift underscores Dubai’s dynamic real estate landscape, as businesses adapt to evolving market conditions by exploring new districts that offer modern facilities and favorable leasing terms.
