Dubai Commercial Real Estate Hits $8.44 Billion in Q2 2025

Dubai's commercial property market is making headlines once again, posting a stellar performance in the second quarter of 2025. According to newly released data from CRC, the sector recorded a total transaction value of AED31 billion (approximately $8.44 billion), marking a 50% surge compared to Q2 2024. This significant jump signals not just a recovery, but a major leap forward for the emirate's commercial real estate sector, which continues to thrive on investor confidence, corporate expansion, and new supply.

Office Sector Emerges as Top Performer

Among all commercial asset classes, the office segment has taken the spotlight. Office transactions climbed to AED2.62 billion in Q2 2025—an eye-popping 93% increase year-on-year. Volume-wise, 965 office units were sold during the quarter, up from 764 units in the same period last year, representing a 26% increase.

Analysts attribute this boom to robust demand from both local and international investors, many of whom are shifting from leasing to ownership. A key driver behind the trend is the influx of foreign businesses establishing regional headquarters in Dubai, combined with local firms expanding their physical footprint amid a favorable economic outlook.

Key Districts Driving Growth in Dubai’s Commercial Real Estate

The bulk of office transactions continues to be centered in Dubai's well-established business districts, with Business Bay and Jumeirah Lake Towers (JLT) maintaining their status as the top-performing locations. These zones are favored for their central location, high-quality infrastructure, and accessibility to other major parts of the city.

However, new zones are rapidly gaining momentum. Motor City and Barsha Heights, for instance, are now firmly on the radar for investors and occupiers alike. These areas offer a compelling value proposition: competitive pricing, flexible layouts, and increasing retail and transport connectivity.

Off-Plan Projects Reshape Investor Sentiment

A notable feature of the current market dynamic is the growing share of off-plan transactions. These pre-construction deals are playing a pivotal role in redefining commercial real estate in Dubai. In the first quarter of 2025 alone, off-plan office deals totaled AED800 million—a number expected to rise as new developments hit the market.

Lumena Tower by Omniyat

Projects such as Omniyat's Lumena Tower in Business Bay are seen as market trendsetters, offering cutting-edge workspace designs, eco-friendly features, and tech-ready configurations. These developments are catering to the modern workforce and discerning investors who prioritize functionality and long-term adaptability.

The rising popularity of off-plan commercial properties points to a shift in buyer behavior, with more long-term occupiers and institutional investors prioritizing spaces designed for future operational needs rather than immediate use.

Upcoming Supply to Reshape the Market by 2027

Looking ahead, the city is set to receive a major injection of new office inventory. Approximately 680,000 square meters of office space is expected to be completed across Dubai by 2027. Much of this supply will be concentrated in high-demand zones such as Business Bay, Dubailand, Majan, and Motor City, helping to rebalance the supply-demand dynamics and support continued market activity.

This upcoming wave of completions is designed to cater to evolving business needs—offering more sustainable, efficient, and customizable work environments that align with international standards.

Office Price Trends Highlight Capital Growth

The resurgence of demand has had a profound effect on pricing as well. Office sale prices, which had reached a low of AED761 per square foot in 2020, have shown a sharp upward trajectory. By 2024, the average price was AED1,413 per square foot, and that figure has since climbed to AED1,724 in 2025—marking a 22% year-on-year increase.

This price hike reflects tightening supply conditions in secondary office markets and heightened interest in Grade A properties. Investors are increasingly viewing Dubai's office sector as a hedge against inflation and a stable source of rental income.

Warehouse Sales Skyrocket Amid Supply Crunch

The industrial segment, particularly warehousing, is experiencing a surge of its own. Average sale prices for warehouses hit AED22.2 million in Q2 2025—a staggering 107% increase compared to the same period last year. Industry experts point to a supply crunch in high-specification, strategically located facilities, especially in established industrial corridors like Dubai Industrial City, Dubai Investment Park (DIP), and Jebel Ali Free Zone (JAFZA).

This surge is not only price-driven but also reflects a structural transformation in the logistics and e-commerce ecosystem. As companies consolidate regional operations and expand their logistics capabilities, the demand for scalable and efficient warehouse spaces continues to grow. Larger transaction sizes have become increasingly common, underlining the role of industrial assets as core elements of supply chain strategies.

Leasing Market Maintains Momentum

Parallel to the sales market, Dubai’s leasing segment is gaining strong traction. Leasing deals for office space rose by 30% quarter-on-quarter, reflecting renewed optimism among occupiers. The average leasing price for office units has nearly doubled—up 95% year-on-year to AED480,768.

This leap is largely attributed to increased demand for fully fitted, well-located offices that cater to modern business needs. Companies are prioritizing larger floor plates, higher-quality finishes, and ready-to-move-in facilities, leading to an overall upgrade of the commercial leasing landscape.

Retail leasing also witnessed a healthy upswing, with average lease prices reaching AED433,147—a 7% rise year-on-year. The steady growth in this segment is linked to rising footfall in mixed-use communities and a strong rebound in consumer spending. Tenants are showing a willingness to pay a premium for strategic locations, particularly in emerging residential neighborhoods where demand for lifestyle and convenience retail is strong.

In the warehousing sector, the leasing market has mirrored the sales trend. Average leasing costs soared to AED1.26 million, marking a 95% year-on-year increase. This growth is fueled by sustained demand from the logistics, e-commerce, and manufacturing sectors, all of which require high-capacity, tech-integrated facilities.

A Market Redefined by Investor Confidence and Innovation

The significant capital inflows and evolving transaction patterns underscore a market undergoing rapid transformation. Investor confidence is being bolstered by Dubai’s stable regulatory environment, transparent transaction processes, and long-term economic vision. The government’s pro-business policies—such as full foreign ownership of commercial properties and long-term residency options for investors—are further enhancing the emirate’s appeal.

Notably, the commercial real estate sector is benefiting from increased participation by institutional investors and private equity firms. These entities are not just seeking capital appreciation but are also attracted to the steady rental yields and portfolio diversification that Dubai offers.

At the same time, the nature of demand is shifting. Today’s buyers and tenants are more discerning, seeking modern, sustainable, and flexible workspaces that align with ESG goals and digital transformation strategies. As a result, developers are under pressure to innovate—offering amenities like smart building systems, wellness zones, green certifications, and hybrid-ready layouts.

Outlook: A Sustained Growth Trajectory Through 2025 and Beyond

All signs point to a commercial real estate sector that’s not only rebounding but evolving into a more diversified and resilient ecosystem. With AED31 billion in Q2 transactions, surging prices, and robust leasing activity across sectors, Dubai is reaffirming its status as a global commercial property hotspot.

The expected completion of 680,000 square meters of office space by 2027 will provide new opportunities for businesses and investors alike. Meanwhile, continued demand for premium warehouse facilities and fitted office units is likely to sustain price momentum and absorption rates well into next year.

As market fundamentals strengthen and supply pipelines become more strategic, Dubai’s commercial real estate sector is poised for long-term expansion—backed by innovation, investment, and international confidence.

Investor Strategies: Making the Most of Dubai’s Commercial Property Growth

Dubai’s commercial real estate sector is seeing strong and sustained growth in 2025, offering a range of opportunities for investors seeking long-term value and income stability. From established office districts to fast-growing industrial zones, the market presents diverse entry points across asset classes.

Below are practical strategies for investors looking to navigate this evolving landscape effectively:

1. Prioritize Grade A Office Assets in Prime Locations

Grade A commercial spaces in established zones such as Business Bay, Jumeirah Lake Towers (JLT), and Sheikh Zayed Road consistently outperform the market in terms of both capital appreciation and rental yields. These areas enjoy high occupancy rates, strong corporate interest, and continuous infrastructure upgrades.

Tip: Look for properties with long-term lease agreements, strong tenant covenants, and modern specifications. These assets are more resilient during market fluctuations and attract premium tenants.

2. Explore Off-Plan Commercial Opportunities

Off-plan office projects are gaining momentum, offering investors first-mover advantages, flexible payment plans, and substantial price appreciation upon completion. Developments like Omniyat’s Lumena tower exemplify the trend toward luxury-grade, smart-enabled office environments.

Tip: Evaluate the developer's track record, location of the project, and construction timelines. Secure early investment in projects with innovative layouts, sustainability features, and future-proof designs.

3. Target Warehousing and Industrial Zones for Long-Term Leases

The warehousing sector has seen a 107% surge in sale prices and a 95% hike in leasing costs. With demand outpacing supply in areas like Dubai Industrial City and JAFZA, investors can benefit from strong, long-term rental contracts and capital gains.

Tip: Focus on high-clearance warehouses with access to highways and ports. Logistics-ready units with automation capabilities will see the highest demand in the coming years.

4. Invest in Emerging Commercial Districts

While traditional hubs dominate headlines, secondary districts like Motor City, Barsha Heights, and Majan offer competitive pricing, increasing rental interest, and the potential for higher yields as infrastructure develops.

Tip: Analyze future transportation plans, retail pipeline, and surrounding residential density to forecast future demand in emerging zones.

5. Utilize REITs and Joint Ventures for Portfolio Diversification

Not all investors may wish to directly manage commercial properties. Real Estate Investment Trusts (REITs) and joint venture partnerships offer fractional ownership in high-value assets with lower entry costs and reduced management responsibilities.

Tip: Choose REITs with diversified portfolios, transparent governance, and proven historical returns. Consider joint ventures for large industrial assets or multi-tenant buildings to spread risk and reduce capital exposure.

6. Stay Ahead of Legal and Tax Changes

Dubai’s regulatory environment continues to evolve to attract foreign investment. Recent reforms include full foreign ownership in commercial zones and streamlined business licensing procedures.

Tip: Work with local legal advisors or consultants to ensure compliance, optimize tax structures, and understand your rights regarding ownership, leasing, and resale.

7. Consider Value-Add Strategies

Investors with a medium-to-long-term horizon can enhance returns through property upgrades, tenant repositioning, or converting underused buildings into higher-yield formats such as co-working hubs or e-commerce micro-fulfillment centers.

Tip: Prioritize properties in need of refurbishment but located in high-traffic zones. Minor upgrades like modern fit-outs, smart technology integration, or enhanced accessibility can significantly boost rental income and property value.

8. Monitor ESG and Sustainability Trends

As corporate tenants increasingly demand energy-efficient, eco-certified buildings, sustainability is becoming a market differentiator. Properties with green credentials are not only in higher demand but also tend to achieve higher occupancy and rent premiums.

Tip: Look for developments with LEED or Estidama certifications and those offering water-saving, solar, or waste-reduction technologies. Sustainability isn't just ethical—it's profitable.

9. Leverage PropTech and Data Analytics

Dubai’s digitized property ecosystem now allows investors to access live transaction data, valuation reports, and occupancy trends. Using analytics tools can help identify market inefficiencies and investment opportunities others may overlook.

Tip: Use real-time dashboards and commercial property platforms for portfolio benchmarking, rent trend analysis, and tenant tracking.

10. Think Long-Term: Focus on Yield Stability and Exit Potential

While short-term price appreciation is attractive, long-term stability should remain your primary focus. Dubai’s strong legal framework, expanding global reputation, and ongoing infrastructure investment make it a solid choice for patient capital.

Tip: Always plan your exit strategy—whether through resale, refinancing, or income reinvestment—and align your property choices with that long-term vision.

Investor FAQs: Navigating Dubai’s Commercial Property Market

1. Is now a good time to invest in Dubai commercial real estate?

Yes. With Q2 2025 transactions reaching AED31 billion and strong price growth across all asset classes, the current market conditions favor both capital appreciation and rental yield potential.

2. How do off-plan commercial properties compare to ready units in terms of ROI?

Off-plan units often offer higher appreciation potential and flexible payment terms, while ready units provide immediate rental income. Your choice depends on investment horizon and risk appetite.

3. What areas in Dubai offer the best value for new investors?

Emerging zones like Motor City, Majan, and Barsha Heights provide strong growth potential due to competitive pricing, improving infrastructure, and rising demand.

4. What’s driving the surge in warehouse prices and leasing rates?

A shortage of high-spec facilities combined with growing demand from logistics, e-commerce, and manufacturing sectors has sharply pushed up both sale and rental prices.

5. Can foreign investors fully own commercial properties in Dubai?

Yes. Foreigners can now own 100% of commercial property in designated zones without the need for a local partner, following recent legal reforms.

6. What kind of yields can I expect from commercial properties in Dubai?

Net rental yields typically range from 6% to 9% for offices and up to 10%+ for industrial assets, depending on location, tenant profile, and asset quality.

Move with the Market—Before Demand Outpaces Supply

With Dubai’s commercial property market reaching AED31 billion in Q2 2025 and office transactions up 93% year-on-year, the data tells a clear story: investor confidence is accelerating, but supply is tightening.

From high-performing districts like Business Bay to rising stars like Motor City and Majan, opportunities exist—but they’re moving fast. Warehousing, office, and off-plan segments are already showing signs of undersupply in the face of rising corporate demand.

If you’re looking to secure long-term rental yields, future-ready assets, or logistics hubs with real operational value—now is the time to act!

Let’s Build Your Commercial Investment Strategy

I’m Stephen James Mitchell, Managing Director of Global Investments and a licensed commercial real estate advisor.

If you’re exploring how to deploy capital into Dubai’s fast-moving commercial sector, I’m here to support you with data-driven insights and access to strategic opportunities.

📞 I'll help you:

• Identify off-plan and secondary commercial assets with strong upside

• Evaluate market trends in leasing rates, tenant demand, and asset class performance

• Build a resilient, yield-focused investment strategy tailored to your goals

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