The office sector in Dubai's real estate market is witnessing a notable increase in pre-commitments for the first time, as the UAE has become a favored destination for corporate expansion in the region. Industry leaders report that Grade A office spaces in Dubai are operating at over 95% occupancy, primarily driven by demand from Indian, Chinese, and European firms, as well as existing corporations expanding their operations.

Pre-commitments for space in under-construction projects have risen across most micro-markets. This trend, common in more established global office markets, is now being observed in Dubai, signaling long-term corporate interest in the city, according to Emirates NBD Research's latest study.

The UAE has emerged as a top choice for corporate occupiers looking to expand their office presence. As a regional gateway, much of this demand is focused in Dubai. Alongside other regional hubs like Abu Dhabi and Riyadh, Dubai has bucked the global trend of declining office activity seen in recent years.

Global demand for office space has surged post-pandemic as economies recovered, reaching or even exceeding pre-pandemic levels in some Asian markets. The study highlights that demand has steadily increased over recent years, initially spurred by consolidation and relocation of existing corporate occupiers from smaller offices to central locations.

Dubai's cost-effective Grade A offerings and a rebound in economic and tourism activities, supported by effective government policies, have made it an attractive option for global corporations looking to expand and future-proof their real estate portfolios in a region poised for sustained economic growth.

In the region, Dubai led the recovery in occupier demand post-lockdown, a trend that has continued with most Grade A spaces operating at 95% or higher occupancy levels, contrasting sharply with pre-pandemic periods of low demand and various lease incentives offered by landlords.

Demand for office space has come from both existing corporate occupiers and new entrants to the local market. Notably, there has been a surge in demand from banking and financial services firms, particularly hedge funds, with the Dubai International Financial Center (DIFC) being the preferred free zone for such companies.

To address the growing demand, it is projected that over 1.2 million sqft of Grade A space will be added to Dubai's market in the coming years.