Dubai: New office spaces on pre-leasing high as demand outstrips supply

Dubai: New office spaces on pre-leasing high as demand outstrips supply

Published: Sun 12 May 2024, 2:48 PM

Demand for office spaces is outstripping supply in Dubai and the emirate could well run out of Grade A office space next year.

With the inflow of foreign companies that are setting up regional headquarters in Dubai, many landlords and free zones are upgrading older office stocks to meet the growing demand and capitalise on higher rents.

Prathyusha Gurrapu, director and head of research and consultancy at Cushman & Wakefield Core, said developers and free zones are expected to initiate the next phase of office projects, however, no relief is expected until 2026 due to a minimum of a two-to three years' time for construction.

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“As most of the upcoming Grade A supply is highly likely to be pre-leased, limited substantial new supply is expected to be brought to market in the foreseeable future, deepening the supply shortage,” she added.

Gurrapu revealed that with office demand continuing to outstrip supply and most handovers being pre-leased, occupancy levels are to see sustained upward pressures with Grade A office occupancy expected to be near 95 per cent by the end of 2024 and hovering at near full