UAE Flexible Office Space Market Size (2024 - 2029)

The UAE flexible office space market is experiencing growth driven by the increasing demand for co-working spaces, particularly among startups seeking cost-effective alternatives to traditional office rentals. The market's expansion is further fueled by the shift in workplace strategies and the emphasis on wellness, which flexible office spaces address effectively. Despite being one of the largest markets in the MENA region, the market's growth is somewhat hindered by a lack of awareness among SMEs and startups, who often mistakenly believe that these spaces cater exclusively to the IT sector.

Market Size of UAE Flexible Office Space Industry

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UAE Flexible Office Space Market Summary
Study Period 2020 - 2029
Base Year For Estimation 2023
Market Size (2024) USD 1.13 Billion
Market Size (2029) USD 1.73 Billion
CAGR (2024 - 2029) 9.16 %
Market Concentration Low

Major Players

UAE Flexible Office Space Market Major Players

*Disclaimer: Major Players sorted in no particular order

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UAE Flexible Office Space Market Analysis

The UAE Flexible Office Space Market size is estimated at USD 1.13 billion in 2024, and is expected to reach USD 1.73 billion by 2029, growing at a CAGR of 9.16% during the forecast period (2024-2029).

The United Arab Emirates is experiencing a rising demand for flexible office spaces, leading to more expansions than contractions in the office market and exacerbating the supply-demand imbalance. This trend and record-high new company registrations pose challenges for firms seeking high-quality office space across the market. The surge is primarily driven by new businesses establishing their operations in the city, as they find these flexible spaces more suitable during their initial phases than traditional offices.

A total of 34,075 new companies joined as members of the Dubai Chamber of Commerce during H1 2024, representing year-over-year (YoY) growth of 5%. The figures reflect the dynamism of Dubai’s business environment and the emirate’s high levels of competitiveness in attracting foreign direct investment. This increase is fueled by Dubai's appeal as a competitive global hub, attracting international startups and expanding companies, particularly from Asia, Central Asia, and the MENA region.

In Dubai, the market saw the addition of 92,000 square meters of new office space in 2023, bringing the total stock to 9.2 million square meters. An additional 44,000 square meters are expected by the end of 2024. Grade-A office rents in Dubai's Central Business District (CBD), surged by 15% year-on-year to AED 2,425 (USD 660) per square meter per annum, setting a new record and reducing vacancies to 8%.

Abu Dhabi's office market also remains strong, with 3.9 million square meters of total stock in 2023 and an expected increase of 112,000 square meters in 2024. Average Grade-A rents in the city rose 12% year-on-year to AED 2,000 (USD 544) per square meter per annum, with vacancies slightly decreasing to 22%.

The demand for hybrid working is notably high in the United Arab Emirates, with 90% of employees favoring hybrid models and 83% reporting employer support for these schemes, per industry associations. In response, IWG launched two new flexible office spaces in 2023: "Spaces" in Dubai and Signature Workspace in Abu Dhabi. The UAE's real estate sector thrives due to the high demand for quality office spaces, limited availability, and a favorable investment climate.

UAE Flexible Office Space Industry Segmentation

A flexible workspace, also known as shared office space or flexispace, is fitted with basic equipment like phone lines, desks, and chairs. It allows employees who normally work from home or telecommute to have a physical office for a few hours every week or every month. A complete background analysis of the UAE's flexible office space market, including the contribution of sectors in the economy, assessment of the economy and, market size estimation for key segments, market overview, and emerging trends in the market dynamics, market segments, and geographical trends is covered in the report.

The UAE's flexible office space market is segmented by type (co-working space, serviced offices / executive suites, and others (hybrid, virtual office)), end-use (information technology (IT and ITES), BFSI (banking, financial services, and insurance), business consulting & professional services, other services), and user (freelancers, enterprises, start-ups, and others). The report offers market size and forecasts for all the above segments in value (USD).

By Type
Co-working Space
Serviced offices / Executive suites
Others (Hybrid, Virtual Office)
By End Use
Information Technology (IT and ITES)
BFSI (Banking, Financial Services, and Insurance)
Business Consulting & Professional Services
Others
By User
Freelancers
Enterprises
Start-Ups
Others
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UAE Flexible Office Space Market Size Summary

The UAE flexible office space market is experiencing significant growth, driven by the shift towards hybrid work models and the increasing demand for co-working spaces. This trend has been accelerated by the COVID-19 pandemic, which prompted businesses to adopt more flexible work arrangements. The UAE stands out as a leading market for flexible office spaces in the MENA region, with numerous companies like Letswork, Servcorp, and My Office entering the market to offer shared spaces. Government initiatives, such as the establishment of free zones, have further bolstered this sector by attracting startups and freelancers. The demand for flexible office spaces is not only due to the flexibility they offer but also because they align with modern workplace strategies that emphasize collaboration, wellness, and risk mitigation. Dubai, in particular, is at the forefront of this market, with a robust supply and demand for flexible office spaces.

The market is becoming increasingly competitive, with a mix of local, regional, and a few global players vying for market share. Key players such as Nasab, Astrolabs, Nook, LetsWork, and WitWork are leveraging partnerships, expansions, and technological advancements to enhance their offerings. The rise in SMEs and startups across various industries is a significant factor contributing to the growth of co-working spaces, which are favored for their networking and collaboration opportunities. Despite the challenges posed by misconceptions about flexible office spaces being limited to the IT sector, the market continues to expand, supported by investments and strategic developments. The sector's resilience is evident in the rising office rents and occupancy levels in major business hubs like Dubai and Abu Dhabi, indicating a strong recovery and growth trajectory for the flexible office space market in the UAE.

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UAE Flexible Office Space Market Size - Table of Contents

  1. 1. MARKET INSIGHTS

    1. 1.1 Current Economic and Flexible Office Space Market Scenario

    2. 1.2 Technological Innovations in the Flexible Office Space Sector

    3. 1.3 Impact of Government Regulations and Initiatives on the Industry

    4. 1.4 Key Exports & import statistics of construction materials

    5. 1.5 Impact of Geopolitics and Pandemics on the Market

    6. 1.6 Insights into Flexible Office Space Construction Costs

    7. 1.7 Insights into Rents, Leasing, and Rental Yields in the Flexible Office Space Segment

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Type

      1. 2.1.1 Co-working Space

      2. 2.1.2 Serviced offices / Executive suites

      3. 2.1.3 Others (Hybrid, Virtual Office)

    2. 2.2 By End Use

      1. 2.2.1 Information Technology (IT and ITES)

      2. 2.2.2 BFSI (Banking, Financial Services, and Insurance)

      3. 2.2.3 Business Consulting & Professional Services

      4. 2.2.4 Others

    3. 2.3 By User

      1. 2.3.1 Freelancers

      2. 2.3.2 Enterprises

      3. 2.3.3 Start-Ups

      4. 2.3.4 Others

UAE Flexible Office Space Market Size FAQs

The UAE Flexible Office Space Market size is expected to reach USD 1.13 billion in 2024 and grow at a CAGR of 9.16% to reach USD 1.73 billion by 2029.

In 2024, the UAE Flexible Office Space Market size is expected to reach USD 1.13 billion.

UAE Flexible Office Space Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)