Published 2026-08-30
Office space in the UAE is scarcer than at any point in the past decade. According to JLL’s UAE Market Dynamics report for the second quarter of 2026, citywide office vacancy fell to 6.1% in Dubai (from 7.7% a year earlier) and stood at 1.4% in Abu Dhabi, with prime space availability at 0.7% and 0.1% respectively. Rental contract registrations in Dubai rose 24.6% year on year and 15.1% quarter on quarter, while Grade B office rents in Dubai climbed 31.5% in a year and Grade A rents 26.2%. JLL published the report on 2026-08-05; Khaleej Times summarised its findings on 2026-08-30. With Abu Dhabi adding only 38,000 sq m of Grade A space in the quarter and Dubai recording no major completions, landlords in both cities are holding their pricing and offering incentives selectively.
Q2 2026 office market in numbers
The table brings together the headline figures from the JLL report. All percentages are for the second quarter of 2026 unless stated otherwise.
| Indicator | Dubai | Abu Dhabi |
|---|---|---|
| Citywide office vacancy | 6.1% (7.7% a year earlier) | 1.4% |
| Prime space availability | 0.7% | 0.1% |
| Grade A vacancy | 4.2% | 1.4% |
| Grade B vacancy | 8.0% (10.9% a year earlier) | 2.7% |
| Grade C vacancy | 10.9% (12.7% a year earlier) | not reported |
| Rental contract registrations, year on year | +24.6% | +5.4% |
| Rental contract registrations, quarter on quarter | +15.1% | broadly flat |
| Prime rents, year on year | +13.6% | +11.7% |
| Grade A rents, year on year | +26.2% | +5.1% |
| Grade B rents, year on year | +31.5% | +4.2% |
| New supply in Q2 | no major completions | about 38,000 sq m of Grade A |
| Pipeline for H2 2026 | nearly 940,000 sq ft | about 57,000 sq m |
Dubai’s total office stock is just over 100 million sq ft (JLL’s press release gives 100.6 million sq ft; the Khaleej Times summary cites 101.4 million sq ft). Abu Dhabi’s inventory reached about 4.2 million sq m after the second-quarter deliveries.
Demand: more contracts, fewer exits
The sharp rise in Dubai registrations was driven mainly by new contracts rather than renewals, which JLL reads as a sign of business confidence and of the city’s resilience to regional uncertainty. In Abu Dhabi the picture is steadier: registrations grew 5.4% year on year, led by a 7.1% increase in renewals, meaning existing tenants are staying put while new entrants continue to look for space.
Some occupiers paused expansion plans during the quarter, but downsizing activity remained minimal. Whenever space was released, it was quickly absorbed by other tenants, which is why rents did not soften even where individual companies hesitated. New enquiries in both cities improved compared with the more cautious first quarter of 2026, although some prospective tenants kept exploring options and monitoring the market rather than signing immediately.
Where the pressure is felt: Grade B and Grade C buildings
The most telling figure in the report is the 31.5% annual rise in Dubai Grade B rents, ahead of Grade A (26.2%) and prime (13.6%). With prime availability at 0.7%, companies that cannot find or afford top-tier space are moving down the quality ladder, which pushed Grade B vacancy from 10.9% to 8.0% and Grade C vacancy from 12.7% to 10.9% in a year. Quarterly growth was 8.7% for Grade B and 8.8% for Grade A, so the trend was still accelerating at mid-year.
Abu Dhabi’s rental growth is more moderate: prime rents rose 11.7% year on year but slipped 0.3% quarter on quarter, and Grade A and Grade B rents were largely stable over the quarter with annual gains of 5.1% and 4.2%. The capital’s constraint is availability rather than price: with 1.4% vacancy overall and 0.1% in prime buildings, there is very little to lease at any rate.
Supply: refurbishments and a thin pipeline
Abu Dhabi delivered roughly 38,000 sq m of Grade A gross leasable area in the second quarter and has about 57,000 sq m scheduled for the second half of the year. Dubai recorded no major completions in the quarter and expects nearly 940,000 sq ft by year-end, less than 1% of existing stock. Several previously operational buildings in Dubai have been temporarily taken offline for refurbishment to meet demand for higher-quality space, which removes supply in the short term.
JLL notes that developers continue to face supply-chain difficulties affecting material imports. Because many projects are already secured through pre-lease commitments, landlords are prioritising timely delivery, with a stronger focus on cost efficiency and quality assurance. Mouhammad Takieddin, CEO of JLL for the Middle East and Africa, described the situation as one where quality upgrades and delivery pressures are shaping pipeline dynamics in a highly supply-constrained office market.
Abu Dhabi rent freeze: what it changes for office tenants
At the close of the second quarter Abu Dhabi introduced a rent freeze. The Abu Dhabi Real Estate Centre (ADREC) announced in June 2026 that rents on renewals and re-lettings of residential, commercial and industrial property are capped at the value recorded in the most recent registered Tawtheeq or Tamleeq contract for the unit. The measure is described as temporary and in force until further notice; as of the June 2026 client alert by Baker McKenzie, no formal decree number had been published and the rule was communicated through a circular.
The freeze does not apply within Abu Dhabi Global Market (ADGM), which has its own property law and covers Al Maryah Island and parts of Al Reem Island, and JLL adds that newly completed projects are also outside its scope. JLL expects the measure to cap sharp quarterly rent increases in the capital in the short to medium term, while annual rent growth is still expected to continue through year-end in both emirates.
Flexible workspace as the release valve
The flexible workspace segment continued to expand in the quarter. Companies used serviced offices and coworking to avoid capital expenditure on fit-out and to keep lease commitments short, which is attractive when the business is still sizing its headcount. JLL links this to the integration of AI and automation into operations: workforce needs are changing faster than a five-year lease can accommodate.
What it means for a business in the UAE
For a company setting up or renewing a licence, the office question is now a cost and timing issue rather than a formality. Three practical consequences follow from the JLL data:
- Budget for higher rent at renewal. In Dubai, Grade B rents are up 31.5% in a year; a tenant renewing a 2025 lease should expect the landlord to reprice rather than roll over, and incentives such as rent-free periods are being offered only selectively.
- Start the search early. With prime availability below 1% in both cities, a company that needs a specific district, floor plate or fit-out standard should begin negotiations well before the current lease expires, or accept a Grade B or Grade C building.
- Use the licence structure to size the office. A mainland licence in Dubai requires a registered Ejari tenancy contract, and in most free zones the number of residence visas is linked to the office product chosen. Choosing between a flexi-desk, a serviced office and a leased unit changes both the rent and the visa quota; our guide on mainland versus free zone companies in the UAE explains the trade-offs.
The office squeeze sits alongside the wider commercial property boom we covered earlier: Dubai commercial transactions reached AED 65.23 billion in the first half of 2026, and Dubai free zones reported 96% occupancy over the same period.
Checklist: leasing an office in Dubai or Abu Dhabi in 2026
- Confirm which licence you hold or plan to obtain (mainland, free zone, DIFC or ADGM) and what office product it requires for the licence and for visa quotas.
- Decide on the building grade you can accept: prime and Grade A are close to fully let, Grade B and Grade C have 8% to 11% vacancy in Dubai.
- Check whether the premises fall under the Abu Dhabi rent freeze (mainland Abu Dhabi) or outside it (ADGM, newly completed projects).
- Ask the landlord in writing about incentives: rent-free months, fit-out contribution, parking, and the number of cheques.
- Register the contract (Ejari in Dubai, Tawtheeq in Abu Dhabi) immediately after signing; the licence renewal and visa applications depend on it.
- Compare a 12-month serviced office against a 3-year lease on total cost, including fit-out, deposit and exit terms.
How Atlant Capital can help
Atlant Capital sets up and maintains UAE companies for founders and investors from the CIS and beyond. We handle company formation in Dubai free zones and on the mainland, advise on the office product that matches the licence and visa plan, and process work visas and residency for owners and staff once the tenancy contract is registered. If you are choosing between a flexi-desk, a serviced office and a full lease, we can show the cost difference for your specific licence before you sign.
Conclusion
JLL’s second-quarter data describe an office market where demand outruns construction: vacancy of 6.1% in Dubai and 1.4% in Abu Dhabi, prime availability under 1%, Grade B rents up 31.5% in Dubai, and a pipeline that adds less than 1% to Dubai’s stock by year-end. The Abu Dhabi rent freeze limits quarterly increases for existing tenants in the capital, but it does not create space. For companies operating in the UAE, the practical answer is to plan the office earlier, budget for repricing, and match the office product to the licence.
FAQ
What is the office vacancy rate in Dubai and Abu Dhabi in 2026?
According to JLL’s UAE Market Dynamics report for Q2 2026, citywide office vacancy was 6.1% in Dubai, down from 7.7% a year earlier, and 1.4% in Abu Dhabi. Prime space availability was 0.7% in Dubai and 0.1% in Abu Dhabi; Dubai Grade A vacancy was 4.2%, Grade B 8.0% and Grade C 10.9%.
How much have office rents in Dubai increased in 2026?
JLL reports that in the second quarter of 2026 Dubai Grade B office rents were 31.5% higher than a year earlier (8.7% higher than the previous quarter), Grade A rents rose 26.2% year on year (8.8% quarter on quarter) and prime rents rose 13.6% year on year. In Abu Dhabi prime rents grew 11.7% annually, Grade A 5.1% and Grade B 4.2%.
Does the Abu Dhabi rent freeze apply to offices?
Yes. The freeze announced by the Abu Dhabi Real Estate Centre (ADREC) in June 2026 applies to residential, commercial and industrial property: on renewal or re-letting the rent is capped at the value in the most recent registered Tawtheeq or Tamleeq contract. Premises inside Abu Dhabi Global Market (ADGM) are exempt, and JLL notes that newly completed projects are also outside the measure. The freeze is temporary and applies until further notice.
How much new office space will Dubai and Abu Dhabi add in 2026?
JLL expects nearly 940,000 sq ft of office space to be delivered in Dubai in the second half of 2026, against total stock of just over 100 million sq ft. Abu Dhabi added about 38,000 sq m of Grade A space in the second quarter and has about 57,000 sq m in the pipeline, with total inventory of about 4.2 million sq m.
