Dubai’s prime office shortage is fuelling a sharp rise in commercial property acquisitions as investors and corporates race to secure Grade A space, even as the emirate’s residential sector shifts into a more mature growth phase marked by value-driven demand and longer holding strategies.
Fresh data from Engel & Völkers Middle East shows Dubai’s real estate market entering 2026 on solid footing, with activity increasingly concentrated in high-quality assets across both residential and commercial segments. The commercial office market in particular is witnessing a surge in capital deployment, driven by limited supply of ready prime offices in core business districts and sustained corporate expansion.
Dubai recorded 15,981 residential sales transactions in the latest period, a rise of 20.8 per cent year on year from 13,152 deals a year earlier. Total residential sales value climbed to Dh55.9 billion, up 55.3 per cent, highlighting a strong shift toward higher-value purchases and premium locations across the city.
At the top end of the market, Dubai saw more than 1,000 residential transactions above Dh10 million in January alone, one of the strongest monthly performances on record. Demand has been supported by both established luxury addresses such as Palm Jumeirah and Nad Al Sheba and emerging high-end communities including Palm Jebel Ali, The Oasis and Jumeirah Golf Estates 2.
Average gross rental yields across apartments and villas have also strengthened to about 6.9 per cent, reinforcing Dubai’s appeal for income-focused investors. However, while prices continue to rise across key communities, the pace of growth is moderating compared with the sharp increases seen between 2023 and 2025, suggesting a transition toward a more stable and sustainable market cycle.
V.S. Bijukumar, a Dubai-based property consultant, said the evolving residential landscape reflects a maturing market characterised by longer holding periods and a growing preference for buy-to-stay and yield-focused strategies rather than short-term speculative activity.
In contrast, Dubai’s commercial real estate sector has entered 2026 with renewed momentum, led by a sharp upswing in office demand. Commercial sales reached Dh17.1 billion, an increase of 82 per cent year on year, across 1,446 transactions, up 23.7 per cent from the previous year.
Jayakrishnan Bhaskar, CEO of Ozon Marketing Management, said the office segment has been the standout performer. Transaction volumes for office properties surged 133 per cent year on year, while the total value of office sales jumped 296 per cent, underscoring intense competition for limited Grade A inventory. Investors and corporates are increasingly committing earlier in the development cycle to secure space amid tightening availability in prime business districts such as DIFC, Downtown Dubai and Business Bay.
According to Cavendish Maxwell, Dubai’s office sales value more than doubled to Dh13.1 billion in 2025, the strongest performance in over a decade. The consultancy reported a 102 per cent surge in office sales value compared with 2024, while transaction volumes rose more than 53 per cent to around 4,600 deals last year, reflecting strong occupier and investor confidence in the emirate’s long-term economic outlook.
Property consultancy CBRE has also highlighted a severe shortage of Grade A office stock in Dubai’s core districts. In its latest market review, CBRE noted that occupancy levels in prime office buildings across central locations have exceeded 95 per cent, pushing rents upward and prompting many firms to secure space well ahead of completion. The firm expects rental growth in prime offices to remain positive through 2026 due to constrained supply and sustained corporate demand.
Taimur Khan, head of research for Mena at CBRE, said in a recent report that Dubai’s office market is experiencing “one of its tightest supply environments in recent history,” driven by strong business formation, relocation of multinational firms and continued expansion in financial and technology sectors. He added that limited new completions over the next two years are likely to keep vacancy rates low and support rental and capital value growth in prime assets.
The tightening supply has also accelerated activity in the off-plan commercial segment. Primary market transactions accounted for 41.3 per cent of total commercial deals in the latest period, signalling growing appetite among investors and end-users to secure future office inventory before completion.
Daniel Hadi, chief executive of Engel & Völkers Middle East, said Dubai’s real estate market is increasingly defined by quality and long-term fundamentals. “In commercial real estate, the acceleration in office transactions and values reflects tightening Grade A availability, driving a strategic shift towards the off-plan market as corporates and investors seek to secure long-term positioning,” he said. “These dynamics reinforce Dubai’s status as a market defined by depth, liquidity and resilience.”
Industry experts say the emirate’s economic expansion, population growth and rising inflow of global companies and high-net-worth individuals continue to underpin demand across real estate segments. Dubai’s positioning as a regional headquarters hub for multinational corporations and a magnet for entrepreneurs and investors is expected to sustain pressure on prime office supply in the near term.
