The UAE commercial real estate market continues to grow: in the first quarter of 2026, office rental rates in Dubai and Abu Dhabi showed strong growth amidst limited supply and high business demand.

The high-quality office space segment demonstrated particularly strong momentum.

Office rents in the UAE continue to rise

In Abu Dhabi:

• prime office rents increased by 11.7% year-on-year
• Grade A offices — by 5.1%
• Grade B — by 4.2%

In Dubai, growth was even more significant:

• Grade B offices — +23.4%
• Grade A — +19%
• Prime offices — +17.2%

Experts note that due to the shortage of premium spaces, many companies have started to more actively consider high-quality Grade B offices.

Vacancy remains minimal

One of the main factors driving price growth remains the extremely low level of available space.

Vacancy rates:

Abu Dhabi

• citywide vacancy — 1.4%
• prime vacancy — just 0.1%

Dubai

• citywide vacancy — 7.3%
• prime vacancy — 0.7%

Even with new developments coming online, the supply of truly high-quality office space remains limited.

The office market volume continues to grow

Total office stock reached:

• 101.1 million sq ft in Dubai
• 4.18 million sq m in Abu Dhabi

Meanwhile, demand from international companies, the fintech sector, AI companies, and regional headquarters continues to support the market.

Companies are more cautious about new contracts

In the first quarter of 2026, the market became more cautious in its decision-making.

The number of new office contracts decreased:

Dubai

• −7.7% year-on-year

Abu Dhabi

• −6% year-on-year

However, this does not indicate market weakness.

On the contrary, in Dubai, renewals increased by 11.2%, demonstrating a high level of confidence among current tenants in the market.

Retail segment: resilience continues

Retail real estate also demonstrates stability.

In Dubai:

• retail vacancy decreased to 4.8%
• Super-regional malls showed rental growth of 12.4%

In Abu Dhabi:

• Vacancy remained stable at 8.9%

The market was supported by:

• flexible lease structures
• turnover-rent models
• short-term rental concessions
• government incentives

What's currently in focus for the market

The most resilient formats remain:

• community malls
• experiential retail
• wellness concepts
• local brands
• pop-up projects

Meanwhile, retail more dependent on tourism is showing more subdued performance.

Why the market remains resilient

Despite regional instability and global economic risks, the UAE commercial real estate market continues to show strong fundamentals.

Key drivers:

• limited supply of quality assets
• steady business inflow
• economic diversification
• growth of new industries
• government support for the economy

The shortage of prime spaces will remain the key factor driving further growth in rental rates in the coming quarters.