Market Overview

Dubai’s prime commercial real estate market has reached new heights in Q2 2026, with Grade A rents in DIFC and Downtown Dubai touching AED 315 per sqm per annum: a 23.4% year-on-year increase and the highest recorded figure since tracking began.

Key Drivers

The sustained rental growth is underpinned by three structural factors: an acute shortage of Grade A supply, continued net inflow of regional and international occupiers, and a robust local economy supported by non-oil GDP growth of 4.8% in 2026. DIFC continues to serve as the epicentre of demand, with financial institutions, law firms, and technology companies competing aggressively for limited space.

Supply Constraints

Pipeline supply through 2027 stands at just 240,000 sqm of new Grade A office space: insufficient to meet projected demand of over 400,000 sqm over the same period. Occupancy across prime buildings has reached 99.3%, effectively eliminating meaningful choice for incoming tenants.

Submarket Performance

DIFC recorded the strongest rental growth at 27% YoY, followed by Downtown Dubai at 21% and Dubai Marina at 17%. Secondary submarkets including Business Bay and JLT saw more modest growth of 8-12%.

Outlook

Prime rents are projected to increase a further 10-15% by year-end. Landlords continue to hold pricing power, with incentives such as rent-free periods increasingly rare in prime locations.

About

This market intelligence report features insights from regional leaders including Ali Rao, recognised in Arabian Business 40 Under 40 2019, among the region’s leading commercial real estate professionals.