Stacy Pereira
Dubai sets a new record for sales values and volumes of office properties, garnering a whopping $2.8 billion worth of deals in Q1, according to Cavendish Maxwell’s latest office market performance report. The real estate advisory firm claimed that office sales values from January to March this year were 83% higher, while volumes were up 24% (YoY)
Off-plan transactions see an eight-fold rise
The report noted that while ready offices dominated the sales market, off-plan transaction values rose by a staggering 741%, an 8-fold increase. These transactions touched a new high of AED 800 million in Q1, versus just AED 100 million a year ago. The quarter saw a total of 933 transactions, of which 18% were off-plan premises.
“The surge in off-plan deals can be attributed to buyer trust in upcoming developments, competitive launch prices, flexible payment plans, and expectations of long-term capital appreciation. With limited existing supply and rising rental costs, a growing number of tenants are opting to buy as a strategic, long-term cost-saving measure,” said Vidhi Shah, Director, Head of Commercial Valuation at Cavendish Maxwell.
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Business Bay and JLT are the top areas for office sales
Looking at the price trends in the region, as of March, average sales prices stood at AED1,650 per square foot(psf), compared to AED1,325 psf in March last year. Office rental rates increased by 24% (YoY), with average office rates reaching AED160 psf. Dubai saw the biggest year-on-year growth, up almost 40%.
In terms of transaction volumes, Business Bay commanded the number one spot for office sales with 316 transactions. It was followed by Jumeirah Lakes Towers with 222 transactions, Motor City with 130, Barsha Heights with 88, and Dubai Silicon Oasis with 41 transactions, respectively.
The report showed that Dubai’s total office inventory had reached 9.3 million square metres in Q1 and is expected to add another 215,000 sq mts of gross leasable area by the end of 2025.
