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Tag: UAE commercial real estate

  • 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 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.