Is Abu Dhabi's A-Grade Office Space Boom Here to Stay?

10x Industry

Mokshita P.
10x Industry
Published:

Is Abu Dhabi's A-Grade Office Space Boom Here to Stay?

Abu Dhabi’s A-grade office space is in high demand, driven by economic growth, with waitlists for premium buildings and a surge in new economic licenses. Office Square’s new centres are already booking fast.

The commercial real estate market in Abu Dhabi is really buzzing right now, especially when it comes to A-grade office spaces. There’s a huge demand for these high-quality buildings, which is a sign of growing confidence in the city’s economy. Businesses are expanding and looking for modern, top-notch spaces, which is shaping the city’s skyline.

In fact, the market is so hot that some A-grade buildings already have waitlists. The economic growth in Abu Dhabi was reported at over 3.1 percent in 2023, and it's expected to double by the end of this year. That’s driving up demand for premium commercial properties.

Last year alone, the Abu Dhabi Department of Economic Development issued 25,647 new economic licenses, a 3.5 percent increase from the previous year. To support this growth, the government is expanding the ADGM financial free zone by adding Reem Island, which will increase its area to around 1,438 hectares. This expansion is set to roll out by the end of 2024 and could shift a lot of businesses within and around ADGM, further boosting demand for commercial office space.

Savills recently reported that there are over 90,000 square meters of office space in the pipeline until 2026. This includes projects like The Link Masdar City, Masdar City Square, and Aldar’s HB Office Tower. Many of these new projects are already seeing strong pre-commitment rates due to high demand.

Loubna Atbir from Office Square mentioned that leasing activity is up because businesses are returning to office spaces and expanding. Abu Dhabi's strategic efforts to attract international investors and improve the business environment are really paying off. She pointed out that A-grade spaces are becoming a hub for international and regional companies, and there's a big focus on quality and sustainability.

Office Square has seen incredible interest since opening their first fully serviced business centre at Aldar HQ in Al Raha just three months ago. They’re already planning to open a second location in Nation Towers Mall next month, with over 80 percent of the space already booked.

A key trend is the shortage of high-quality commercial spaces for SMEs. Many landlords prefer leasing larger spaces, leaving fewer options for smaller businesses. To address this, Office Square is taking larger spaces in A-grade buildings and creating smaller office units to better serve the SME sector.