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Dubai's commercial real estate market is heading towards a major reset that could create a clear two-tier office ecosystem by 2028, according to fäm Properties. While commercial transactions have surged sharply this year, the office sector has lagged residential real estate in adopting modern design and quality standards. With no true new-generation office supply delivered since the global financial crisis, older buildings now face growing pressure. From 2028, the arrival of Grade A offices is expected to shift tenant preferences and pricing toward quality assets. This transition will likely widen the gap between premium offices and ageing stock, reshaping rents, occupancy levels and investor demand across Dubai's office market.
Dubai's commercial real estate market is moving towards a significant reset that is likely to result in a two-tier office ecosystem by 2028, according to Firas Al Msaddi, Chief Executive Officer of fäm Properties. While the sector has recorded strong transactional growth this year, the absence of modern, high-quality office developments over the past decade and a half is now set to reshape market dynamics. Advertisement
Commercial property transactions have surged over the first 11 months of the year, with sales value rising by nearly 78% and volumes increasing by over 35%. Despite this momentum, the office segment has lagged behind the residential market in adopting contemporary design, construction quality and luxury standards. In contrast, residential real estate has undergone a major transformation since 2008, marked by new architectural approaches, enhanced specifications and stricter construction norms.
Al Msaddi noted that Dubai has not witnessed the emergence of a true new generation of office buildings since the global financial crisis. This is expected to change from 2028 onwards, when the first wave of next-generation Grade A offices is scheduled for handover. At that point, tenants will be presented with modern, efficient and architecturally relevant alternatives, placing older office buildings under increasing competitive pressure.
As newer assets enter the market, pricing is expected to recalibrate around quality, leading to a widening gap between premium Grade A offices and ageing secondary stock. This shift is likely to redefine rental values, occupancy levels and investor preferences across the commercial sector.
Demand for high-quality office space is already visible in select developments. Vision Tower in Business Bay has emerged as a strong indicator of this trend, consistently outperforming the broader market. Its configuration, which offers half-floor units as the smallest available option, has naturally attracted established corporate occupiers, highlighting the depth of demand for genuine Grade A office environments.
The commercial market's growth comes alongside a record-breaking year for Dubai's residential sector, which has already surpassed previous annual transaction and value benchmarks in 2025. Commercial real estate activity has also strengthened, with total sales value reaching AED 15.5 billion during the January to November period, compared to AED 8.7 billion a year earlier. Transaction volumes rose from 3,970 deals last year to 5,364 during the same period this year.
Offices accounted for the largest share of commercial activity, with sales value of AED 11.2 billion across more than 4,000 transactions. Shops followed with AED 3.8 billion in value, while other asset classes such as showrooms, warehouses, workshops and clinics contributed smaller volumes.
As Dubai prepares for the delivery of modern office stock from 2028, the commercial real estate sector is expected to increasingly reward quality, efficiency and relevance, accelerating the emergence of a clearly defined two-tier market.
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