Office Rent Increases Driven by High Demand

Abu Dhabi's office market is experiencing robust growth, with Grade A office rents reaching record highs in the second quarter of 2025. This surge is fueled by strong demand and limited new supply, according to Savills' "Market in Minutes" report. The Central Business District (CBD) saw the most significant increase, with rents up 42% year-on-year, while Outer CBD areas rose by 18%. Notable developments like City Gate Tower and Abu Dhabi Global Market (ADGM) also saw substantial rental hikes.

The economic prosperity of Abu Dhabi is a key driver of this real estate boom. The non-oil sector grew by 6.1% in the first quarter of 2025, contributing over 56% of the total GDP. This growth has boosted business confidence, increased leasing activity, and driven demand for larger, high-quality office spaces. The expansion of ADGM to Al Reem Island, adding nearly 500,000 sq m of office space, further fueled market activity.

ADGM's expansion and increased tenant activity are notable factors. The number of operational firms within ADGM grew by 43% year-on-year to 2,781, with a 26% rise in financial services entities. The workforce on Al Maryah Island also grew significantly. Occupier activity in the first half of 2025 was led by banking, financial services, consulting, technology, and hedge fund sectors, with many seeking units of 10,000 to 20,000 sq ft.

With only 100,000 sq m of new office space expected in 2025 and a further 100,000 sq m planned by 2027, Savills anticipates continued upward pressure on prime office rents. This trend is likely to benefit landlords and developers but could pose challenges for companies looking to expand or relocate within Abu Dhabi.