Dubai Adds 92,000 sq.m. of Office Spaces in 2023 – JLL Report Highlights UAE’s Resilient Real Estate Sector
Dubai’s real estate sector is on the rise as the city received a whopping 92,000 sq.m. of new office spaces in 2023. A recent report by real estate consulting firm JLL has highlighted the strong growth of the UAE economy despite challenging global economic conditions. The report mentions that new market entrants and existing companies expanding their operations have contributed to the market expansion, particularly in the office spaces sector.
The total market stock in Dubai has now risen to 9.2 million sq.m. with the delivery of Grade A specifications office spaces, and an additional 44,000 sq.m is expected to be added this year. In Abu Dhabi, while the total stock remained unchanged at 3.9 million sq.m in 2023, approximately 112,000 sq.m of new office space is expected to be introduced in 2024.
Average Grade A rents in Dubai’s Central Business District increased by 15 percent year-on-year in the fourth quarter of 2023, reaching AED 2,425 per sq.m per annum. This record-setting increase in rents has led to a reduction in office vacancies to 8 percent in the CBD.
Faraz Ahmed, research director at JLL MENA, praised the UAE’s real estate industry’s performance in 2023, especially in the office and residential sectors. He mentioned that the increased demand has led to a significant increase in available properties, making real estate a key driver of growth in the country.
In Abu Dhabi, the city-wide Grade A rents grew by 12 percent year-on-year, reaching AED 2,000 per sq.m per annum. The city-wide vacancy rate also slightly decreased to 22 percent in the capital.
With robust demand driving rents’ growth and limited availability of quality spaces, landlords are in a favorable position in the market. Tenants are now exploring secondary and tertiary areas for lower-quality properties due to high rents and increased inquiries from occupiers.
Overall, the real estate market in the UAE remains favorable for both investors and tenants, with continued growth expected in the coming years.
