The UAE Real Estate Market – Q3 2023
UAE’s commercial real estate sector thrives amidst strong supply and demand factors
- Faraz Ahmed
- Muhammad Aijaz
- Sara Alameddine
Dubai witnessed a 11% year-on-year (Y-o-Y) increase in average Grade A rents within the Central Business District (CBD), with rates reaching AED 2,300 per sq. m. per annum. Furthermore, the office vacancy within the CBD remained steady at 10%. Occupiers in the emirate encountered increasingly stringent lease terms, leaving limited room for negotiations and necessitating prompt decision-making to avoid losing out to competing tenants. In the capital, average vacancy dropped to 22% which in turn pushed up rental rates. Abu Dhabi experienced a 13% Y-o-Y rise in average city-wide Grade A rents, amounting to AED 2,000 per sq. m. per annum.
In Abu Dhabi, government and semi-government entities played a pivotal role in driving office demand as they remained key occupiers in the capital city. Abu Dhabi’s total office stock stood at 3.9 million sq. m. in the third quarter; however, the capital city is anticipated to see the addition of 41,000 sq. m. of office space during the rest of this year.
Read our latest UAE Real Estate Market report to find out more.