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Tag: Abu Dhabi office market

  • RAK Retail Property Prices Soar Up to 348% in H1 2026

    RAK Retail Property Prices Soar Up to 348% in H1 2026

    Average retail property prices in key Ras Al Khaimah locations recorded sharp annual increases during the first half of 2026, led by Al Marjan Island and RAK Central, according to data from Property Finder released on August 5, 2026.

    The average price of retail properties on Al Marjan Island reached Dh19.7 million, up 348 percent from Dh4.4 million in the first half of 2025. RAK Central recorded a 254 percent increase to an average of Dh11.9 million, while retail property prices in Al Hamra Village rose 44 percent to Dh2.4 million.

    The figures point to growing investor interest in Ras Al Khaimah’s commercial property market as the emirate expands its tourism, residential and business infrastructure.

    Retail Rents Rise Across RAK

    Average retail rents in Mina Al Arab increased 109.9 percent year-on-year to Dh187,490, while Al Qusaidat recorded an 83.3 percent rise to Dh58,528. Retail rents on Al Marjan Island grew by a more moderate 5.8 percent to Dh181,564.

    In the office market, average rents in Al Seer more than doubled to Dh61,211, while the Corniche area recorded a 15.6 percent increase to Dh155,058. Julfar office sale prices rose 3.9 percent to an average of Dh613,800, while Al Marjan Island office prices averaged Dh8.6 million.

    Dubai Office Rents Maintain Growth

    Dubai’s commercial property market also recorded strong annual rental growth in several leading business districts. Average office rents in Jumeirah Lakes Towers increased 30.6 percent to Dh475,870 during the first half, while Deira recorded a 23.4 percent rise to Dh64,391.

    Sheikh Zayed Road office rents increased 14.5 percent to Dh578,394, while Business Bay rose 11.4 percent to Dh421,041. The performance aligns with broader trends observed across the emirate’s commercial office sector during Q2 2026.

    Among retail locations, Deira recorded the strongest increase, with average rents rising 61.5 percent to Dh643,855. Jumeirah Village Circle retail rents increased 33.4 percent to Dh511,536, while Arjan rose 19.3 percent to Dh422,612.

    Dubai’s office sales market also recorded increases across several districts. Property Finder’s figures showed average first-half sale prices of about Dh10.6 million in Business Bay, Dh6 million in Jumeirah Lakes Towers and Dh2.45 million in Jumeirah Village Circle.

    The data, however, showed varying performance between the first and second quarters, reflecting differences in property size, quality and the composition of listings in each location.

    Growth Across Abu Dhabi and Sharjah Locations

    In Abu Dhabi, average retail rents in Khalifa City increased 17.1 percent to Dh665,200, while Al Raha Beach recorded an 8.5 percent rise to about Dh317,449. Al Reem Island office rents increased 7.4 percent to Dh570,030, while average retail sale prices at Al Raha Beach rose 11.5 percent to Dh5.2 million.

    Average office sale prices on Al Reem Island increased 28 percent to Dh3.8 million, according to the data. The capital’s commercial sector has shown resilience alongside the residential market, which recorded 17.8 percent annual price growth in Q2 2026.

    Sharjah also recorded strong rental growth in selected commercial locations. Average office rents in Al Majaz rose 64.4 percent to Dh121,627, while Sharjah Industrial Area recorded an increase of 57.3 percent to Dh61,262. Office rents in Al Qasimia increased 41.3 percent to Dh122,765, while retail rents in Muwaileh rose 42.3 percent to Dh88,796.

    The figures also showed declines in some areas, underscoring the varied performance of the commercial property market across different asset types and locations. The expansion of commercial infrastructure across northern emirates reflects the broader diversification of the UAE’s property market beyond Dubai and Abu Dhabi’s traditional dominance.

  • UAE Office Rents Surge 13% in Q2 2026

    UAE Office Rents Surge 13% in Q2 2026

    The UAE’s commercial real estate sector demonstrated resilience during the second quarter of 2026 despite regional geopolitical headwinds that weighed on tourism, retail and broader economic activity, with office and industrial markets continuing to benefit from supply constraints and strong occupier demand.

    Dubai’s office market recorded average rent increases of 13 percent year-on-year in Q2 2026, while prime office rents climbed 16 percent. Occupancy levels remained exceptionally high at approximately 94 percent, reflecting continued shortages of Grade A office stock across key commercial districts and free zones including DIFC, TECOM and DMCC, where pre-leasing activity absorbed a significant portion of future supply before completion.

    Abu Dhabi’s office fundamentals proved equally robust, with average rents rising nearly 16 percent year-on-year and occupancy reaching approximately 96 percent. Demand remained concentrated in the Abu Dhabi Global Market (ADGM) freezone, supported by continued growth across financial services sectors, including hedge funds and investment activities. With less than 300,000 square meters of new office space expected between 2026 and 2027, supply constraints are likely to persist in the medium term.

    “The second quarter marked a notable shift in the UAE’s economic and real estate landscape, as regional geopolitical developments began to weigh on business activity, tourism flows and broader market sentiment. While several sectors have seen a moderation in performance, the impact has been uneven, with office and industrial markets continuing to benefit from limited supply and sustained occupier demand,” said Matthew Green, Head of Research at CBRE MENA.

    The report forecast a marginal GDP contraction of 0.04 percent for 2026, reflecting disruptions to trade, tourism, aviation and consumer-facing sectors, while projecting a strong recovery in 2027 as regional conditions stabilize and economic activity normalizes.

    The UAE’s industrial and logistics real estate market remained a standout performer, supported by government-led industrial strategies, supply chain localization initiatives and ongoing foreign direct investment. Industrial exports reached AED262 billion in 2025, while programs such as Operation 300bn and Make It in the Emirates (MIITE) continue to attract manufacturing and logistics investment.

    Despite regional supply chain challenges, leasing activity remained resilient and rental growth continued across major industrial hubs. In Dubai, strong rental growth was recorded across key logistics destinations including Dubai Industrial City, Dubai Investments Park and National Industries Park. Abu Dhabi’s market was supported by significant investment commitments, including AED48.5 billion announced through the MIITE initiative and major new logistics agreements within KEZAD.

    Dubai’s residential real estate market experienced noticeable moderation during the second quarter as demand softened and transaction activity declined. While residential sales prices remained 1.9 percent higher year-on-year, rental performance turned negative, with average rents declining by 2.6 percent annually and 6.2 percent quarter-on-quarter. Increased supply, slower transaction activity and weaker occupier demand contributed to a cooling market environment.

    Transaction volumes fell by 29 percent year-on-year during Q2 2026, with fewer than 37,000 residential sales recorded compared to more than 51,000 in the same period last year. Total transaction values declined to AED88 billion, down from nearly AED154 billion in Q2 2025. Approximately 18,000 residential units were completed during the first half of the year, adding to available inventory while helping moderate pricing pressures.

    In contrast, Abu Dhabi’s residential market continued to outperform, supported by strong domestic demand and sustained investor confidence. Residential values increased by 21.6 percent year-on-year during Q2 2026, driven primarily by apartment price growth of 24.4 percent. Rental growth remained positive at 3.6 percent annually despite short-term moderation during the quarter.

    Transaction activity in Abu Dhabi proved particularly robust, with sales values reaching AED32 billion, representing a 150 percent increase compared to Q2 2025, while transaction volumes grew by approximately 80 percent year-on-year. The off-plan market remained the dominant segment, accounting for roughly 83 percent of all residential transactions and 85 percent of total sales value, reflecting continued demand for newly launched projects.

    “What remains particularly noteworthy is the speed and scale of the UAE’s policy response, from supporting business continuity and trade flows to advancing economic partnerships and diversification initiatives. Although near-term conditions are likely to remain challenging, the country’s long-term growth trajectory remains supported by structural reforms, strategic investment and its position as a leading hub for trade, capital and talent,” added Green.

    The divergent performance across real estate segments underscores the UAE market’s complexity, with commercial property fundamentals continuing to strengthen while residential markets adjust to increased supply and shifting demand patterns across both emirates.

  • UAE Office Rents Surge as Prime Space Shortage Tightens Market

    UAE Office Rents Surge as Prime Space Shortage Tightens Market

    The UAE’s commercial real estate market demonstrated remarkable resilience in the first quarter of 2026, sustaining strong rental growth across office and retail sectors despite heightened geopolitical uncertainty and evolving economic conditions across the Middle East.

    According to the latest Real Estate Market Dynamics report released by JLL on May 25, 2026, strong economic fundamentals, robust occupier confidence and limited availability of quality office space helped maintain momentum even as businesses adopted a more cautious approach to expansion and leasing decisions.

    Abu Dhabi recorded prime office rent growth of 11.7% year-on-year, while Grade A and Grade B office spaces posted annual increases of 5.1% and 4.2% respectively. Dubai delivered even stronger performance, led by Grade B office space, where rents surged 23.4% year-on-year as occupiers increasingly shifted to more affordable alternatives amid limited prime inventory in core business districts such as DIFC, Downtown Dubai and Business Bay.

    Grade A office rents in Dubai rose 19% annually, while prime office rents increased 17.2%.

    Taimur Khan, head of Research for the Middle East and Africa at JLL, said the UAE market continued to show exceptional resilience and adaptability despite short-term regional disruptions.

    “With strong underlying economic fundamentals and agile occupier and landlord strategies, the UAE’s office and retail sectors demonstrated remarkable resilience and a strong capacity for strategic adaptation. Demand remains robust, signalling the market’s inherent strength and positioning it for sustained growth as demand for prime spaces accelerates amid tightening supply.”

    Industry analysts say the sharp rise in Grade B rents reflects a growing mismatch between supply and demand as businesses seek cost-effective options without compromising on location and connectivity.

    Vacancy levels remained exceptionally low across both emirates. Abu Dhabi’s citywide office vacancy rate stood at just 1.4%, while prime vacancy dropped to an almost negligible 0.1%. Dubai’s citywide vacancy rate edged up slightly to 7.3% following new project deliveries, although prime vacancy remained extremely tight at 0.7%.

    Dubai’s total office inventory reached 101.1 million square feet during the quarter, while Abu Dhabi’s office stock expanded to 4.18 million square metres.

    The UAE’s broader economic diversification push, combined with strong growth in financial services, technology, consulting, logistics and family offices, has continued to fuel demand for commercial office space. This trend aligns with broader commercial momentum across the emirates.

    Despite the rental surge, leasing activity showed signs of moderation as companies adopted a more measured approach amid regional geopolitical tensions and global economic uncertainty. Office rental contract registrations declined 6% year-on-year in Abu Dhabi and 7.7% in Dubai during the first quarter. Monthly new contracts also fell sharply in March compared to February.

    However, Dubai demonstrated notable resilience, with office lease renewals rising 11.2% annually, underlining strong occupier retention and continued confidence in the emirate’s long-term growth prospects.

    The report highlighted a pronounced “flight to quality” trend, with companies increasingly prioritising premium office environments, flexible leasing structures and strategically located assets amid evolving economic and geopolitical conditions.

    Analysts say global supply-chain disruptions and rising construction costs are continuing to affect development timelines, although developers are increasingly mitigating these pressures through phased procurement planning, strategic sourcing and contractor negotiations.

    The UAE’s retail sector also remained relatively resilient, supported by strong domestic consumption, government stimulus measures and flexible leasing arrangements introduced by landlords. Dubai’s retail inventory stood at 56 million square feet, while citywide vacancy tightened further to 4.8%, reflecting sustained occupier demand despite softer tourism flows in certain segments. Abu Dhabi maintained a stable retail vacancy rate of 8.9%.

    The report noted that the UAE government’s Dh1 billion economic stimulus package, combined with landlord flexibility through turnover-rent and short-term relief models, played an important role in supporting occupancy levels and preserving retail market stability.

    Retail rents remained firm across key segments. Super-regional malls in Dubai recorded annual rental growth of 12.4%, while Abu Dhabi’s prime super-regional malls maintained premium positioning with rents reaching Dh5,524 per square metre, supported by selective demand from high-quality tenants.

    While leasing activity in Dubai softened, with new retail rental contracts declining 9.9% year-on-year, Abu Dhabi recorded a 3.6% increase in registrations, driven by a 16.7% rise in new contracts.

    JLL said retailers are increasingly focusing on flexible and experiential concepts to capture domestic demand as consumer behaviour evolves. Community and neighbourhood retail centres are expected to remain resilient, while experiential retail, wellness-focused concepts and home-grown brands are likely to outperform amid changing consumer preferences.

    Analysts believe the UAE’s strong population growth, rising tourism, expanding corporate activity and government-backed economic diversification programmes will continue to support the long-term outlook for both office and retail real estate despite short-term regional volatility. This confidence mirrors sustained investor sentiment across residential markets.