Higher yields
Grade A offices in Business Bay are projected around 8% gross, against roughly 5% to 7% on Ellington's residential stock.
The numbers
13%Rise in average Dubai office rents, year on year to Q2 2026
16%Rise in prime office rents over the same period
94%Approximate Dubai office occupancy, reflecting a shortage of Grade A space
24.6%Year-on-year increase in Dubai office rental contract registrations in Q2 2026
AED 190+Business Bay Grade A asking rent per sq ft by mid 2026, up from around AED 160 in early 2024
2030The point to which forecasts expect Dubai's office market to remain undersupplied
Sources: CBRE UAE Real Estate Market Review Q2 2026; JLL UAE Office Market Dynamics Q2 2026; published Business Bay office market analysis, 2026.
Why Grade A office space is scarce
Office towers take years to plan and build, and company formations in Dubai have not waited for them. The Dubai Chamber of Commerce recorded 70,500 new member companies in 2024, its highest annual increase on record. Demand is strongest in the established business districts and free zones, including DIFC, TECOM and DMCC, where pre-leasing is absorbing much of the new supply before it completes. Some landlords have also taken older buildings out of service for refurbishment to meet rising quality expectations, which removes stock in the short term.
Around 9 million sq ft of new office space is scheduled for delivery across Dubai by 2030. Even so, market forecasts still expect the segment to stay undersupplied until the end of the decade. A tower handing over in 2031 would arrive into that market.
The wider picture
The strength in offices has come against a harder backdrop. CBRE revised down its 2026 outlook for the UAE economy, forecasting a marginal contraction this year because of regional geopolitical disruption to trade, tourism and aviation, followed by a strong recovery in 2027. Residential has moderated as new supply eased pricing, and retail has felt softer tourism.
Offices have held up because the supply shortage is structural rather than cyclical. That does not make the sector immune to a downturn, but it does explain why commercial property has outperformed while other segments cooled.
Office or residential: the trade-offs
Corporate tenants
Office leases usually run longer than residential tenancies and are signed by companies rather than individuals.
VAT applies
Commercial property sales and rents in the UAE are subject to 5% VAT, unlike most residential transactions. Registered businesses can often recover it.
Bigger tickets
Office units, and especially half and full floors, need more capital and can take longer to resell or relet than a typical apartment.
This is general information, not tax or investment advice. Take professional advice on your own position.
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EOI closes 16 October 2026. Register now for the EOI pack, pricing and floor plans.