UAE Commercial Real Estate Holds Strong as Office Rents Climb and Retail Stays Resilient
Office rents posted double-digit growth in Dubai and Abu Dhabi, while retail occupancy remained stable despite regional uncertainty
The UAE’s commercial real estate market continued to show strong resilience in the first quarter of 2026, supported by solid economic fundamentals, occupier confidence, and limited availability of quality space.
According to JLL’s latest market update, both the office and retail sectors remained relatively strong even as businesses adopted a more measured approach to expansion and leasing decisions. The main story was clear: demand for quality space is still strong, and supply in the best locations remains very tight.
Dubai Grade B Rent Growth
23.4%
Highest office rental growth
Dubai Grade A Rent Growth
19%
Prime demand remains strong
Abu Dhabi Prime Rent Growth
11.7%
Very tight vacancy
Dubai Retail Vacancy
4.8%
Healthy occupier demand
OFFICE MARKET: FLIGHT TO QUALITY CONTINUES
One of the clearest trends in the market is the continued flight to quality. Companies are increasingly prioritising premium offices, flexible leasing terms, and well-connected locations as they adapt to changing economic and geopolitical conditions.
In Abu Dhabi, prime office rents rose 11.7% year-on-year, while Grade A and Grade B rents increased by 5.1% and 4.2% respectively.
Dubai posted even stronger rental growth. Grade B rents surged 23.4%, Grade A rents rose 19%, and prime office rents increased 17.2%. This reflects a clear mismatch between demand and supply, especially in core districts such as DIFC, Downtown Dubai, and Business Bay.
VACANCY LEVELS SHOW HOW TIGHT THE MARKET IS
| Market |
Citywide Vacancy |
Prime Vacancy |
What It Means |
| Abu Dhabi Office |
1.4% |
0.1% |
Exceptionally tight market with very limited prime availability |
| Dubai Office |
7.3% |
0.7% |
Some citywide flexibility, but prime stock remains very limited |
| Dubai Retail |
4.8% |
— |
Healthy demand and steady occupancy |
| Abu Dhabi Retail |
8.9% |
— |
Stable performance supported by steady demand |
LEASING ACTIVITY MODERATED, BUT CONFIDENCE REMAINED
Even with rising rents, leasing activity showed some signs of moderation as companies became more cautious amid regional tensions and global uncertainty.
Office rental contract registrations declined by 6% in Abu Dhabi and 7.7% in Dubai. Monthly new contracts also dropped sharply in March compared with February.
However, Dubai still showed notable resilience, with office lease renewals rising 11.2% year-on-year, underlining strong occupier retention and continued confidence in the emirate’s longer-term business outlook.
RETAIL MARKET REMAINED STABLE
The UAE’s retail sector also remained relatively resilient, supported by strong domestic consumption, government stimulus, and flexible leasing models introduced by landlords.
Dubai’s retail inventory reached 56 million square feet, while Abu Dhabi maintained a stable retail environment. 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.
Leasing activity was mixed. New retail rental contracts in Dubai declined 9.9%, but Abu Dhabi recorded a 3.6% increase, driven by a 16.7% rise in new contracts.
WHAT IS SUPPORTING THE MARKET?
Main Drivers
• Strong economic fundamentals
• Expanding financial and technology sectors
• Limited premium office supply
• Population growth and rising corporate activity
Retail Support Factors
• Dh1 billion economic stimulus package
• Turnover-rent and short-term relief models
• Demand for experiential and wellness-focused retail
• Strength of community and neighbourhood centres
M R ONE PROPERTIES PERSPECTIVE
At M R One Properties, we see the latest JLL data as a strong sign that the UAE’s commercial property market is not merely holding steady — it is adapting intelligently.
The office sector continues to benefit from tight prime supply and sustained occupier demand, while retail remains supported by flexible leasing strategies and stable domestic consumption. Even where leasing activity has moderated, the broader picture is still one of resilience, discipline, and long-term confidence.
This is what a maturing commercial real estate market looks like: selective demand, stronger focus on quality, and continued strength in the best-connected, best-positioned assets.
