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    Home»Business»UAE commercial rents jump as Abu Dhabi prime office availability falls to 0.1%
    Business

    UAE commercial rents jump as Abu Dhabi prime office availability falls to 0.1%

    Editorial teamBy Editorial teamAugust 6, 2026
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    Abu Dhabi’s prime office space availability dropped to just 0.1 per cent in the second quarter of 2026, highlighting the severe shortage of premium workspaces in the capital as strong occupier demand continued to drive rental growth across the UAE, according to JLL’s latest market report.

    Overall office vacancy in Abu Dhabi remained highly constrained at 1.4 per cent during Q2, with sustained business demand pushing rental contract registrations up 5.4 per cent year-on-year and renewals increasing 7.1 per cent.

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    The limited availability of prime office stock resulted in an 11.7 per cent annual increase in prime rental rates, while Grade A and Grade B office rents recorded growth of 5.1 per cent and 4.2 per cent, respectively.

    Abu Dhabi delivered 38,000 square metres of Grade A office space during the quarter, with another 57,000 square metres in the pipeline. However, the recently introduced rent freeze regulation is expected to limit rental increases in the short to medium term, JLL said.

    Meanwhile, Dubai’s office market continued to experience strong momentum, driven by growing demand for high-quality spaces. Rental contract registrations in the emirate increased 24.6 per cent year-on-year and 15.1 per cent quarter-on-quarter, mainly supported by new contracts.

    Dubai’s overall office vacancy rate declined to 6.1 per cent in Q2 from 7.7 per cent a year earlier. As prime inventory became increasingly scarce, occupiers moved towards Grade A and Grade B alternatives, pushing Grade B vacancy down to 8 per cent from 10.9 per cent and Grade C vacancy to 10.9 per cent from 12.7 per cent.

    The supply-demand imbalance led to sharp rental increases in Dubai, with Grade B rents rising 31.5 per cent annually, followed by Grade A rents at 26.2 per cent. Prime office rents climbed 13.6 per cent over the same period.

    Mouhammad Takieddin, CEO of Middle East and Africa at JLL, said the UAE commercial real estate market was showing increasing maturity and agility despite regional volatility.

    “Quality upgrades and delivery pressures are shaping pipeline dynamics in a highly supply-constrained office market, while retail developers actively future-proofing their portfolios with a domestic-first strategy are well-positioned to capture long-term value,” he said.

    Flexible offices gain traction

    Across Dubai and Abu Dhabi, flexible office spaces continued to expand as companies increasingly sought agility, lower entry barriers and shorter lease commitments. JLL said the growing adoption of artificial intelligence and automation is also reshaping workforce requirements and corporate real estate strategies.

    The UAE retail market also witnessed structural changes, with developers focusing on community-focused destinations and diversified tenant mixes to match evolving consumer preferences.

    Dubai’s retail vacancy rate fell to 4.7 per cent in Q2 from 8 per cent a year earlier, supported by strong demand for secondary regional and smaller-format malls. Super-regional malls recorded the strongest rental growth, with rates rising 8.5 per cent annually.

    Retail leasing activity in Dubai moderated during the quarter, with annual contract volumes declining 0.2 per cent and quarterly volumes dropping 14.2 per cent as retailers adopted a cautious approach amid softer tourist footfall.

    In Abu Dhabi, retail leasing remained resilient, with rental contract registrations increasing 4.4 per cent annually. The capital’s retail vacancy rate remained stable at 8.9 per cent during the quarter.

    Community centres emerged as the strongest-performing retail segment in Abu Dhabi, recording annual rental growth of 9.3 per cent, reflecting growing consumer preference for convenient, neighbourhood-based shopping destinations.

    JLL said developers are increasingly focusing on flexible lease structures, higher capital expenditure contributions and experiential offerings such as entertainment zones and innovative food halls to attract visitors and strengthen long-term retail performance. 


    Source: Khaleej Times

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