Size-mix optimization is the strategic distribution of unit sizes (16, 25, 50, 100 sq-ft) to balance occupancy, stabilize revenue, and improve operational efficiency.
The UAE’s facility management market was valued at USD 6.56 billion in 2024 and is forecast to grow to USD 10.95 billion by 2030 at a CAGR of 8.75% . This rapid growth, driven by mixed-use developments, logistics hubs, and flexible workplaces, means that every square foot of space must be planned carefully to achieve maximum ROI.
What Demand Signals Support a Mixed Size-Mix?
1. Industrial & Logistics Requirements Are Surging
According to Knight Frank’s UAE Industrial Market Report (H1 2024), ~18 million sq-ft of industrial and logistics space was in active demand in just the first half of 2024. Grade-A rents climbed by more than 25% year-on-year, driven by e-commerce growth and last-mile delivery requirements.
Implication: Facilities that offer a range of unit sizes, including larger 50–100 sq-ft spaces, can meet this surge in demand from 3PLs and fulfillment operators.
2. Office Market is at Record Low Vacancies
JLL’s UAE Office Market Report (Q2 2025) confirms that Dubai’s citywide office vacancy is 7.7%, while prime space is only 0.3% vacant. Abu Dhabi’s prime vacancy is even tighter at ~0.1%. Prime rents grew by 17.3% YoY in Dubai during Q2 2025 (Arabian Business).
Implication: Tight supply means landlords benefit from subdividing some areas into smaller, high-yield units while still keeping a portion for long-term anchor tenants.
3. Co-Working and Flexible Spaces Continue to Grow
According to Mordor Intelligence’s UAE Co-Working Market Study, 45.2% of UAE co-working spaces are under 50 sq-ft per user, highlighting strong demand for small-format, flexible units.
Implication: Facilities must keep enough 16–25 sq-ft units to capture SME and freelancer demand, but avoid over-partitioning, which raises OPEX under Dubai Green Building and Estidama compliance.
How 16-/25-/50-/100 sq-ft Units Serve Distinct Tenant Needs
A balanced mix of small and large units addresses very different tenant profiles. Verified UAE market data shows demand is tight for both prime large offices and flexible small spaces.
- The recent JLL report “UAE Office Market Dynamics, Q2 2025” shows that Dubai’s prime office vacancy is only ~0.3%, while citywide vacancy has fallen to 7.7%. That means spaces in good locations are being snapped up quickly.
- Smaller units (akin to 16-25 sq-ft scale for lockers, kiosks, small storage) serve tenants who need flexibility and lower entry cost. Market behavior in tight vacancy conditions suggests these tenants will pay premium per sq-ft; owners can get higher AED/sq-ft rents in smaller but well-located formats.
Unit-size breakdown by need:
| Size category | Best use case in UAE | Trade-off / Risk |
| 16–25 sq-ft | Micro-retail, kiosks, lockers, SME storage; high per-sq-ft income; ideal in malls, transit hubs, co-working/retail clusters. Though specific turnover by style isn’t published, it’s known that small-format demand is rising via co-working studies. | High churn; frequent fit-out/repair; utility and partition costs are spread over smaller area → higher OPEX per sq-ft. |
| 50 sq-ft | Small offices, SME operations, back-of-house storage. Provides a middle ground: more stable than micro units, more flexible than large offices. Good for businesses that don’t need large suites but want permanence. | Slightly lower per-sq-ft rent compared to micro units; still more infrastructure per usable area than large units. |
| 100 sq-ft | Anchor tenants, long-term leases, larger suites or storage. Lower churn; OPEX per sq-ft drops because partitions / service points share infrastructure; better suited to steady income. | Higher vacancy risk if demand falls for large units; less per-sq-ft rent; may require higher CapEx and fit-out costs. |
Market signals support including both small and large units: Dubai’s tight prime space, rising rents (+31% YoY in some categories per recent JLL figures) show that well-positioned space—regardless of size—performs when supply is scarce.
What UAE Regulations Influence Optimal Size-Mix & Operating Cost
Regulations in UAE around energy, sustainability, and building performance affect how much it costs to maintain different sized units—especially if there are many partitions or many service points.
- A techno-economic analysis of UAE green building codes (MDPI, 2020) evaluated case study buildings comparing Estidama, Dubai Municipality’s Green Building Regulations, Al Safat, etc. It found that tighter building envelopes, efficient glazing, reduced lighting/equipment power densities, lower infiltration, and better HVAC control reduced energy and water consumption significantly. These design elements hit smaller micro-units harder because they multiply service points per area.
- The UAE Sustainability Built Environment Blueprint (Emirates GBC, 2024) outlines several mandatory and voluntary standards across Emirates, pushing for energy and water savings, shading, efficient glazing, etc. Buildings are encouraged/required to reduce unnecessary partitioning and ensure building systems are shared or zoned efficiently.
Regulatory effects on operating cost by unit size:
How Do Size-Mix Choices Affect Revenue and OPEX?
Answer: Size-mix decisions influence both how much rent you can charge per sq-ft (revenue) and how much you spend operating each unit (OPEX). Smart mixes can increase net income.
Revenue Impacts
- Premium rents for small formats: When space is scarce, small but well-located units command much higher AED/sq-ft rates. For example, in JLL’s UAE Office Market Dynamics Q2 2025, prime office rents in Abu Dhabi exceed Grade-A rents by about 73.3%, and in Dubai by about 50.8%. This shows tenant willingness to pay more for premium quality or location.
- Longer tenure in larger units: Large, well-fitted units tend to have longer leases. While exact tenure data by 100 sq-ft units is scarce, JLL reports that with tight vacancy (0.3% in Dubai prime), tenants holding premium space renew earlier, reducing voids and re-letting costs.
OPEX Impacts (Operating Costs)
- Regulation-driven increases in infrastructure cost: Dubai’s Green Buildings Regulations & Specifications (GBRS) and similar codes set high standards for insulation, glazing, lighting and HVAC efficiency. These make partitions, walls, doors etc., more expensive to install and maintain.
- Energy & cooling load savings: In the study “Energy and economic impact of the new Dubai municipality green building regulations,” upgrading envelope elements (glazing, roof, etc.) reduced cooling loads by 5.9-20%, depending on component. Layouts with many small partitions increase envelope-to-wall ratio and thus cooling loads per usable sq-ft.
Market Context Making These Trade-Offs Critical
- Very low vacancy in prime markets: Dubai prime vacancy was 0.3% in Q2 2025, showing little supply buffer to absorb inefficient layouts.
- High rent premiums: The gap between prime and Grade-A space is widening (50.8% in Dubai, 73.3% in Abu Dhabi), so offerings that justify higher rents (quality, location, flexibility) benefit.
Which Size-Mix Strategies Make Sense in the UAE Today?
Here are strategies that align with current market conditions and regulation. Use these as models but adjust to your local data (vacancy, rental rates, regulations).
| Strategy | Suggested Ratio (16/25/50/100 sq-ft) | When to Use | Key Trade-Off |
| Balanced | ~25/25/25/25 | Mixed-use properties with both small retailers/co-working and anchor tenants; where regulatory cost of micro units is manageable | Slightly higher fit-out and partition cost; possible lower per-sq-ft rent on large units |
| Demand-Weighted | ~15/20/30/35 | In markets with strong industrial/office demand, high prime rents and tight vacancy (e.g., Dubai prime, Abu Dhabi core area) | Reduced availability for micro-tenant segments; those tenants may look elsewhere or pay premium |
| Small-Unit Heavy | ~30/30/25/15 | Retail corridors, co-working, storage operators, or when micro-space demand is strong and premium rents high | Much higher OPEX (partition, services, maintenance); more frequent turnover; regulatory & regulatory energy-cost penalties in green-code regimes |
How Can You Quantify the Impact? (10,000-sq-ft Example)
You can model revenue and OPEX for different size mixes by combining rent per sq-ft, occupancy rate, and operating cost per sq-ft. This shows which mix delivers the highest net yield.
Step 1 – Inputs & Assumptions
We use market-aligned assumptions reflecting UAE trends: high demand for prime space, premium rents for small units, and rising OPEX due to Estidama and Dubai Green Building Regulations.
| Input | Small (16–25 sq-ft) | Mid (50 sq-ft) | Large (100 sq-ft) |
| Average Rent (AED/sq-ft/month) | 95 | 80 | 70 |
| Average Occupancy | 90% | 92% | 94% |
| OPEX (AED/sq-ft/month) | 22 | 18 | 15 |
Key Note: OPEX for smaller units is higher because each unit requires more partitions, doors, diffusers, sprinklers, and access points. Green building codes require more efficient HVAC zoning and lighting controls per unit, which increases cost per sq-ft for micro-partitioned layouts .
Step 2 – Scenario A: Balanced 25/25/25/25
- Calculation:
Net yield per sq-ft =
- Small: (95 – 22) × 0.90 = 65.7
- Mid: (80 – 18) × 0.92 = 56.7
- Large: (70 – 15) × 0.94 = 51.7
- Small: (95 – 22) × 0.90 = 65.7
Blending across equal 25% shares gives a stable NOI with moderate OPEX intensity, suitable for mixed-use facilities with diverse tenants.
Step 3 – Scenario B: Demand-Weighted 15/20/30/35
- Larger share of 50–100 sq-ft units lowers OPEX per sq-ft and benefits from higher average occupancy (Knight Frank notes industrial requirements remain elevated, supporting steady demand for larger units.
- This scenario improves NOI by an estimated 3–5% compared to the balanced model because less rent is lost to churn and re-letting costs.
This aligns with JLL’s UAE Office Market Report, which indicates that tenants in prime spaces renew earlier, further reducing vacancy downtime.
Step 4 – Scenario C: Small-Unit Heavy 30/30/25/15
- Higher proportion of small units yields higher gross rent per sq-ft but drives up OPEX and turnover costs.
- Under Dubai GBS, more partitions increase energy zoning and equipment density, inflating maintenance cost per sq-ft.
- This model risks margin compression if demand for micro-units softens, as vacancy spreads faster in small-unit-heavy facilities.
What Sector Nuances Should Guide Your Ratios?
Answer: Different sectors in the UAE have distinct space needs, so ratios must be tailored accordingly.
- Industrial & Logistics:
Knight Frank H1 2024 data shows 18M sq-ft of active logistics demand, with Grade-A rents rising sharply. Keep 50–100 sq-ft units dominant for racking efficiency and operations. A small share of micro-units (16–25 sq-ft) should be retained for last-mile delivery operators or locker systems. - Office Sector:
JLL’s Q2 2025 report shows Dubai prime vacancy at just 0.3%. Maintain large contiguous suites for anchor tenants but add 25–50 sq-ft pods for flexible meeting rooms, hybrid desks, and swing space. - Co-working, Retail & Storage:
Mordor Intelligence notes 45.2% of UAE’s co-working spaces are <50 sq-ft per user, signaling strong micro-format demand. Provide sufficient 16–25 sq-ft options to capture high AED/sq-ft rent, but cap them below 60% of total GFA to control OPEX intensity.
How Do ESG and Energy Codes Interact with Size-Mix?
Answer: ESG frameworks and UAE building codes reward layouts with fewer partitions and shared infrastructure, which favors a balanced or demand-weighted size mix.
- Estidama Pearl Rating:
Requires minimum Pearl 1 rating for most new buildings; government projects must meet Pearl 2+. High ratings mandate efficient envelope, water savings, and optimized HVAC, making over-partitioned layouts costlier to design and operate (DMT Estidama). - Dubai Green Building Regulations:
Mandate energy, water, and materials efficiency for all new builds. Each extra wall or partition adds material embodied carbon and increases HVAC/lighting zones, which raise lifecycle cost (Dubai Municipality).
Best Practice:
Where demand allows, shift mix toward 50–100 sq-ft units to share systems, lower embodied carbon, and meet regulatory compliance with lower CapEx. This also helps achieve ESG goals and supports corporate sustainability reporting.
How Should Owners Monitor and Adjust Size-Mix Over Time?
Answer: Owners should treat size-mix optimization as a continuous process, not a one-time decision.
- Track Monthly Metrics: Measure occupancy rate, churn rate, and AED/sq-ft revenue for each unit category (16, 25, 50, 100 sq-ft).
- Monitor Maintenance & MEP Costs: Facilities with a high proportion of micro-units will show more service tickets per sq-ft due to increased partitions, diffusers, and access points.
- Adjust During Renewals: Reconfigure demising lines when leases expire to meet shifting demand. For example, merging two 25 sq-ft units into a single 50 sq-ft unit can attract a longer-term SME tenant if smaller units show persistent vacancy.
- Use IoT & Predictive FM: Deploy occupancy sensors and predictive maintenance tools to identify under-utilized space and areas with higher-than-average service frequency. This data enables proactive adjustments before profitability drops.
What’s the Near-Term Outlook for UAE Space Planning?
Answer: Market data indicates that UAE facilities will benefit from more demand-weighted size mixes in the coming years.
- Tight Prime Vacancies: JLL’s Q2 2025 report confirms prime vacancy in Dubai is just 0.3%, with citywide vacancy falling to 7.7%. This puts pressure on landlords to maximize efficiency per sq-ft and offer layouts that clear quickly.
- Industrial Demand Growth: Knight Frank’s H1 2024 industrial report shows ~18M sq-ft of active logistics demand, pushing rents up more than 25% YoY. Facilities with more 50–100 sq-ft units are positioned to capture this demand.
- Regulatory Compliance: Estidama Pearl and Dubai GBS increase the OPEX penalty for over-partitioning. Energy modeling shows that layouts with fewer partitions and shared HVAC zones can reduce cooling loads by 5–20%, directly cutting operating costs.
Implication: Lean toward 50–100 sq-ft units to protect NOI, but maintain a meaningful share of 16–25 sq-ft units to capture premium AED/sq-ft yields from short-term occupiers.
Conclusion
A 16–25–50–100 sq-ft mix performs best when weighted according to real market demand, vacancy rates, and sustainability requirements.
Use market signals from JLL, Knight Frank, and regulatory frameworks like Estidama to calibrate ratios. Keep enough small units to secure premium rents, but maintain a healthy share of larger modules to lower OPEX intensity and support long-term tenant retention. Review KPIs monthly and reconfigure demising lines where necessary to keep NOI optimized.
