Dubai's Office Market Enters a New Phase

Dubai's office market is changing faster than at any time in its history. The Emirates Towers are nearing completion on Sheikh Zayed Road, Internet City is preparing to welcome its first tenants, and international firms increasingly see Dubai as the natural base for their Middle East operations. Demand is rising, and so are tenants' expectations.

Three office markets in one city

• The traditional centre: Deira and Bur Dubai, where trading companies, banks and government offices have long been based.
• Sheikh Zayed Road: modern towers with larger floors, parking and a prestigious address.
• Free zones: Jebel Ali and now Internet City, offering full foreign ownership of businesses and tax advantages.

What tenants want now

International companies expect efficient floor plates, reliable air-conditioning, high-speed telecommunications, adequate parking and professional building management. Much of the older stock in the traditional centre falls short of these standards, which is why new towers can command higher rents and why demand is moving south.

Opportunities for owners

Owners of older buildings face a choice: invest in upgrades or accept lower rents and a different tenant mix. Well-located buildings that are modernised can remain competitive, particularly for regional trading firms that value proximity to the airport and the Creek.

Risks to watch

A rush of new office development could eventually outpace demand, especially if economic growth slows. Office markets are cyclical, and investors should be wary of projects that rely on optimistic letting assumptions. The free zones also compete directly with conventional offices for many tenants.

Lease terms and what they reveal

Office leases in Dubai are typically shorter than in many Western markets, often one to three years, and rents are commonly paid in advance. For landlords, that provides flexibility to raise rents as the market strengthens; for tenants, it means less long-term certainty. As international companies arrive, we expect pressure for longer leases with more structured terms, particularly for headquarters-quality space. Landlords who can offer professional management, clear service charges and longer, well-drafted leases may attract the most stable tenants. Watching how lease terms evolve is a useful way to judge how mature the office market is becoming.

Our view

We expect demand for high-quality offices in Dubai to remain strong for some years, driven by the city's role as a regional hub. The best opportunities lie in modern buildings with excellent access and management, and in areas positioned to benefit from new employment clusters.