Class A offices in Dubai: 3% vacancy and AED 370 a square foot
Vacancy in the best stock sits near 3%, and between zero and two per cent in DIFC and Downtown. What that means in practice — a balanced market runs at 8–12% — and where rents went.
The Dubai office market has reached a state that reports describe dryly as "historically low vacancy" and that in practice means renting a decent office in the centre is a project measured in months.
The numbers
Through the first half of 2025 vacancy in class A stock held around 3%, and in the most sought-after addresses — DIFC and Downtown — it ranged between zero and two per cent. Average class A rent reached AED 370 per square foot a year, after a 28% rise over twelve months and a third consecutive year of double-digit growth.
What 3% actually is
An office market is considered balanced at 8–12% vacancy: that cushion is what allows a company to move when it needs to rather than when a floor happens to free up. Three per cent is a technical figure. It consists largely of space currently being fitted out or changing hands, and contains almost nothing available to transact.
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Zero to two per cent in DIFC means precisely what it says: there are no vacant offices there, there is a queue.
Consequences for a tenant
Planning horizons stretch. Companies now negotiate space twelve to eighteen months before a building completes, because waiting for a floor to be released is not a strategy. Fit-out periods, break clauses and expansion rights become negotiating points in a way they are not in a soft market — and mostly the landlord wins them.
Consequences for an owner
Rental growth of this order does not persist indefinitely, and the pipeline arriving towards 2030 will loosen it. But the immediate position is unusual: a re-let in a good building is close to instantaneous, and the void assumption that dominates an office investment model is currently near zero.
The practical instruction is to model both states. What the asset yields at today's rent with a two-week void, and what it yields at a normalised rent with a two-month void. If the case only works in the first, it is a bet on the cycle.
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