Dubai office leasing holds firm in Q3 2026 as occupiers favour small units
About 20,200 rental deals were recorded in the quarter, 8% below the previous three months but level with a year earlier, as rents held near AED241 per sq ft.
Dubai recorded about 20,200 office rental transactions in the third quarter of 2026. That is 8% below the previous quarter, yet broadly in line with the same period a year earlier.
New leases made up 51% of the deals signed and renewals the other 49%, a split that points to corporate relocation activity running alongside a stable existing-tenant base.
Demand clustered heavily in small space. Units below 1,000 sq ft accounted for 66% of transactions, and those under 500 sq ft alone took 40%. Take-up of compact, flexible workspaces stayed sustained through the quarter.
Average rents held at roughly AED241 per sq ft, though pricing varied widely between established districts and emerging business areas. DIFC, Downtown Dubai and Business Bay continued to attract occupiers weighing the quality of accommodation, accessibility and proximity to commercial hubs.
Relocations remained a primary driver of leasing. Larger requirements were still in play, with deals above 30,000 sq ft recorded during the quarter, and international businesses — fintech firms and Chinese companies among them — underpinned demand for Grade A space.
Occupiers have become more selective, judging location, building quality, cost efficiency and sustainability together. A commercial agency head said the office market continues to show resilience, with occupier demand staying active even as the leasing pace grew more measured. Businesses are taking a more considered approach to their requirements, the same source said, and location, connectivity and building quality carry increasing weight in decisions. Well-located Grade A buildings with strong transport links and modern amenities keep drawing established occupiers and expanding firms. The quality and suitability of new supply will matter as those requirements evolve, the source added, with businesses emphasising long-term operational efficiency and workplace experience.
Supply is set to expand. The development pipeline is expected to deliver about 20.4 million sq ft of gross leasable area between 2026 and 2030, with a larger increase anticipated from 2028 onward. Strata-owned developments are expected to make up 86% of new supply in 2028 and 78% in 2029. That ownership model could widen the availability of smaller, individually owned units. By 2030 the pipeline is expected to shift toward predominantly single-owned developments, which could give larger corporate occupiers more options.
Demand is expected to remain steady through the rest of 2026, supported by corporate relocations, regional business expansion and interest in established commercial locations. Prime, well-connected and sustainability-focused buildings should stay attractive. Secondary assets may face longer leasing periods as occupiers grow pickier.
The supply question runs close to the demand pattern. Two-thirds of current deals are for units under 1,000 sq ft, and the strata-led wave due in 2028 and 2029 will produce more of exactly that stock. What happens to larger floorplates depends on how quickly the shift toward single ownership after 2030 takes hold.
Elsewhere in the region, Qatar recorded $136.8 million in real estate trading within a single week, with residential sales up 47% over the same period.
