In the first quarter, Dubai and Abu Dhabi’s occupier markets experienced robust activity, fueled by heightened demand from new rental registrations.
Dubai witnessed sustained occupier activity, with total rental registrations reaching 46,850, a 35.8% increase from the previous year. CBRE Middle East noted that the surge was predominantly driven by a 51.1% rise in new rental registrations, totaling 34,461. Meanwhile, renewed contracts saw a 6.1% growth, totaling 12,389.
Despite global market comparisons, Dubai’s occupier market dynamics remain attractive to international corporations. Free zone locations continue to be prominent, though developers are fast-tracking future developments to meet escalating demand.
In Abu Dhabi, approximately 10,475 rental contracts were registered, marking a 9.1% year-on-year increase. This was propelled by a 21.2% surge in new rental registrations, while renewed contracts declined by 5.1%.
Occupational demand in Abu Dhabi primarily stems from entities with direct or indirect government affiliations, especially in on-shore areas. The limited availability of quality stock poses a challenge, prompting consideration of build-to-suit options, notably in core CBD locations.
Taimur Khan, head of Research Mena in Dubai, noted persistent demand in the UAE’s occupier market, driven by robust economic growth. However, the scarcity of quality assets may constrain market activity. Nonetheless, high-quality assets, particularly Prime and Grade A stock, are expected to outperform due to increased demand and limited supply.
In Dubai, the average occupancy rate rose to 91.3% in Q1 2024, driving rental rate increases across Prime, Grade A, Grade B, and Grade C segments. Similarly, Abu Dhabi’s institutional-grade buildings recorded a 94% occupancy rate, supporting rental rate growth.
