Higher yields
Ellington's Business Bay office tower is projected at around 6% to 8% gross, against roughly 5% to 7% on Ellington's residential stock.
The numbers
13%Rise in average Dubai office rents, year on year to Q2 2026
16%Rise in prime office rents over the same period
94%Approximate Dubai office occupancy, reflecting a shortage of Grade A space
24.6%Year-on-year increase in Dubai office rental contract registrations in Q2 2026
AED 190+Business Bay Grade A asking rent per sq ft by mid 2026, up from around AED 160 in early 2024
2030The point to which forecasts expect Dubai's office market to remain undersupplied
Sources: CBRE UAE Real Estate Market Review Q2 2026; JLL UAE Office Market Dynamics Q2 2026; published Business Bay office market analysis, 2026.
Sales: offices are Dubai's strongest segment in 2026
Dubai recorded AED 15.8 billion of office sales in the first half of 2026, almost three times the figure a year earlier, and Business Bay was the busiest district with 814 sales. Average office prices rose 15% year on year to AED 2,012 per sq ft, while off-plan offices sold at a weighted average of AED 4,349 per sq ft between January and May. Full figures are in Business Bay office prices and rents in 2026.
Momentum eased in the second quarter. Savills recorded no rental growth for the first time since the first half of 2021, with the citywide average holding at AED 238 per sq ft, while ValuStrat's office capital-values index still reached a record. Savills expects leasing to pick up gradually in the second half of 2026.
The third quarter was quieter. CRC Property recorded 1,123 office transactions worth AED 4.35 billion, down 42% on the second quarter by value but up 40.4% year on year, with the average ticket falling to AED 3.87m as smaller investors returned. Secondary prices eased 1.2% to AED 1,930 per sq ft. Full figures are in Dubai office market Q3 2026.
Sources: CRC Property Q3 2026; Cavendish Maxwell H1 2026; The Real Estate Reports via Gulf Business, May 2026; Savills Q2 2026; ValuStrat Q2 2026. Updated 15 October 2026.
Why Grade A office space is scarce
Office towers take years to plan and build, and company formations in Dubai have not waited for them. The Dubai Chamber of Commerce recorded 70,500 new member companies in 2024, its highest annual increase on record. Demand is strongest in the established business districts and free zones, including DIFC, TECOM and DMCC, where pre-leasing is absorbing much of the new supply before it completes. Some landlords have also taken older buildings out of service for refurbishment to meet rising quality expectations, which removes stock in the short term.
Most of the new office pipeline lands from 2028 onwards; see Dubai office supply to 2030. Even so, market forecasts still expect the segment to stay undersupplied until the end of the decade. A tower handing over in 2031 would arrive into that market.
The wider picture
The strength in offices has come against a harder backdrop. CBRE revised down its 2026 outlook for the UAE economy, forecasting a marginal contraction this year because of regional geopolitical disruption to trade, tourism and aviation, followed by a strong recovery in 2027. Residential has moderated as new supply eased pricing, and retail has felt softer tourism.
Offices have held up because the supply shortage is structural rather than cyclical. That does not make the sector immune to a downturn, but it does explain why commercial property has outperformed while other segments cooled.
Office or residential: the trade-offs
Corporate tenants
Office leases usually run longer than residential tenancies and are signed by companies rather than individuals.
VAT applies
Commercial property sales and rents in the UAE are subject to 5% VAT, unlike most residential transactions. Registered businesses can often recover it.
Bigger tickets
Office units, and especially half and full floors, need more capital and can take longer to resell or relet than a typical apartment.
This is general information, not tax or investment advice. Take professional advice on your own position.
Sources
- Khaleej Times, Smaller investors return to market as Dubai office sales jump in Q3 (CRC Property, 13 October 2026)
- Khaleej Times, Dubai office sales nearly triple to Dh15.8 billion in H1 2026 (Cavendish Maxwell)
- Gulf Business, Dubai real estate has a bright spot: office demand is soaring (May 2026)
- Khaleej Times, Dubai office rents stabilise as demand for Grade A space stays strong (Savills, July 2026)
- Enterprise, Office rents are cooling in Dubai and Abu Dhabi for first time in years (July 2026)
- CBRE, UAE Real Estate Market Review Q2 2026
- JLL, UAE Office Market Dynamics Q2 2026
- Business Bay Grade A office analysis, 2026
Register for the Ellington Business Bay office launch
Expressions of interest close on 19 October 2026. Securing an EOI requires a payment of AED 100,000 and a copy of your passport. Register below and the team will send you the EOI pack and next steps.
Register your interest
EOI closes 19 October 2026. Register now for the EOI pack, pricing and floor plans.