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UAE commercial real estate defies regional tensions, draws global talent and capital
Strong fundamentals and sustained investor confidence keep growth trajectory intact
- PUBLISHED: Tue 7 Jul 2026, 8:00 AM
The UAE’s commercial real estate market has taken recent regional events in its stride and remains firmly on course to attract global talent and businesses, as the fundamental drivers of growth continue to hold strong, supported by proactive government measures, according to industry experts.
Market specialists, analysts and executives said the sector demonstrated remarkable resilience during the first half of 2026 despite heightened geopolitical tensions. While some tenants and investors chose to adopt a wait-and-see approach, leading to longer decision-making cycles and a moderation in transaction activity during March — when regional tensions were at their peak — overall market fundamentals remained intact.
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“Dubai’s business ecosystem continues to expand, with 2,709 new companies registered with the Dubai Chamber in March alone, underscoring the strength of underlying demand for commercial space across the office, retail and industrial sectors,” according to an Engel & Völkers report. The report recorded a 26.2% year-on-year increase in sales transactions to 3,619 during the first quarter of 2026.
In value terms, sales transactions climbed 32% to Dh37.9 billion compared with the same period last year, highlighting sustained capital inflows into the sector. Office and retail assets spearheaded the growth, while land and building transactions largely held their ground, the report noted.
Meanwhile, real estate consultancy Knight Frank, in its latest report, highlighted a robust pipeline of upcoming commercial developments, driven by near-full occupancy levels across Dubai’s office market. More than 23.4 million square feet of new office space is expected to be delivered by 2030, barring any construction-related delays stemming from regional tensions.
“The supply pipeline has been strategically spread across key business hubs, including Business Bay (4.6 million sqft), Meydan City (3.8 million sqft) and DIFC (3.4 million sqft). In DIFC, much of the new stock is being developed by the authority itself under a build-to-rent model, reflecting strong investor confidence in the submarket prior to the recent regional tensions,” Knight Frank said.
The consultancy further noted that future supply is heavily weighted towards Dubai’s prime office districts. DIFC alone has a substantial development pipeline of 7.7 million square feet scheduled for delivery by 2040. Build-to-rent projects account for around 42% of the office space planned within this pipeline, catering primarily to the financial and professional services firms that continue to drive leasing demand in the free zone.
Analysts said the figures suggest the market is weathering short-term headwinds without missing a beat, reinforcing Dubai’s position as a regional business hub and signalling that investor appetite remains alive and well despite geopolitical uncertainties.
Growing Market
Zaid Khan, Partner and Chief Financial Officer, Zane Development, said the UAE’s commercial real estate market has evolved into one of the most sophisticated and internationally attractive markets in the Middle East. While precise market valuations fluctuate based on asset classes and transactions, the commercial sector, including office, retail, logistics, mixed-use developments, and business parks, represents hundreds of billions of dirhams in real estate assets across the country.
“Dubai remains the dominant commercial hub, supported by Abu Dhabi’s growing financial and institutional ecosystem. Over the last few years, we have witnessed exceptionally strong demand for Grade A office space, particularly from multinational corporations, technology firms, financial institutions, family offices, and professional services companies establishing regional headquarters in the UAE,” Khan told BTR.
Several landmark developments continue to attract global investors, including:
Dubai International Financial Centre (DIFC), which has become a leading financial center connecting Europe, Asia, and Africa.
Dubai Internet City and Dubai Media City, which continue to attract technology and media companies.
Expo City Dubai, which is emerging as a next-generation business ecosystem.
Masdar City and Abu Dhabi Global Market (ADGM), which are increasingly attracting international businesses and institutional capital.
“What differentiates the UAE is not only the quality of its real estate but also its regulatory environment, political stability, world-class infrastructure, and strategic location connecting global markets,” he said.
Anthony Spary, Senior Director for Leasing Services at CBRE Middle East and North Africa (Mena) region, expressed full confidence in the UAE’s commercial market and said it will continue to grow due to rising demand in Dubai and Abu Dhabi.
“We are also seeing continued growth in demand across key office districts such as DIFC, Tecom, DMCC and Dubai Commercity, and for the ADGM in Abu Dhabi. Prime Grade A assets continue to attract most of this demand with schemes such as DIFC Square, Sweid One, ICD Brookfield Place, Central Park Towers, Tecom Innovation Hub remaining attractive options for multi-national corporates,” Spary told BTR.
“We are also starting to see strong pre-leasing activity for future schemes such as DIFC Immersive Tower, DMCC Uptown Place, Innovation Hub Phase 4 and Dubai Design District Expansion, which is obviously really encouraging for the market given that pre-leasing has not always been so prevalent so early in this market,” he said.
Next 5-year Outlook
Khan said the UAE commercial market is expected to sustain upward momentum in the coming years due to rising demand and consistent government policies.
“We expect the UAE commercial property market to experience sustained growth over the next five years, driven by continued economic diversification, foreign direct investment, corporate relocations, and government initiatives aimed at attracting global talent and businesses,” he said.
“One of the strongest trends we are observing is the supply-demand imbalance in premium Grade A office space, particularly in Dubai. Vacancy levels in prime locations have tightened significantly, resulting in rental growth and increasing investor interest in office development opportunities,” he added.
Over the medium term, Khan anticipates that rentals will continue to rise in prime office locations, increased developments of smart and sustainable commercial buildings will further expand mixed-use for business complimenting the growth in logistics and industrial real estate driven by e-commerce and trade.
“As the market is also maturing. Investors are increasingly focused on asset quality and long-term income stability rather than purely speculative gains.”
Spary of CBRE Mena opine that the Dubai market remains largely undersupplied in relation to Grade A office accommodation and the aforementioned projects currently under development are due for completion over the next 1-3 years.
“Whilst this will undoubtedly satisfy some of the latent occupier demand, there will always be a need from corporate occupiers to upgrade their spaces in line with their own occupational requirements or evolving market trends, and this will not change in the short to mid-term. Working models in the US and Europe in particular have seen a significant shift as a result of the pandemic however, the regional impact has been somewhat limited.” Regionally, he said the office remains an integral part of the day-to-day life of a corporate occupier, and this is unlikely to change for the foreseeable future.
As with any market, ensuring the right balance of supply and demand is critical to ensuring the long-term success of the city. That said, whilst there is currently undersupply, we are also seeing some impact on new commercial requirements due to the conflict. However, with hopes of a long-term resolution and with developers continuing to prioritise their upcoming projects, this balance appears to be suitably addressed for the time being.”
Growth Catalysts
Spary said Dubai continues to position itself as a global city and a financial hub. This has been supported by a large influx of global hedge funds entering the market over the last 3-4 years, demonstrating increased confidence in the Dubai and wider UAE market. With their preference being to enter the region within the DIFC, this has helped schemes such as ICD Brookfield Place, DIFC Square and now DIFC Immersive Tower with their absorption.
“We have also seen rapid growth in AI, fintech and crypto companies, further bolstering the financial industry across the UAE. Data centres have also played a key role over the last 2-3 years with some vast requirements emerging in the market over the past 12 months, with this trend likely to continue for the foreseeable future given the long-term growth trajectory of the region. Hence, with the government continuing to spend heavily on strategic infrastructure projects, whilst also ensuring the presence of an increasable business friendly environment, the outlook for further business licence and occupational growth looks strong,” he said.
Khan of Zane Developments said the UAE government’s pro-business policies, including long-term residency programmes, expanded foreign ownership, and corporate-friendly regulations, continue to attract international companies, investors and entrepreneurs.
He observed that the UAE’s economic diversification strategy is creating demand beyond traditional sectors. Growth in financial services, technology, artificial intelligence, healthcare, advanced manufacturing, and professional services is translating directly into office and commercial space demand.
“The country’s position as a global logistics and trade hub remains a significant advantage. Businesses serving markets across the Middle East, Africa, South Asia, and Europe increasingly view Dubai and Abu Dhabi as ideal regional headquarters locations,” he said.
Additional, having a strong population growth with continued inflow of skilled professionals and heavy infrastructure investments along with rising demand for commercial developments create a strong foundation for long-term commercial real estate growth, according to Khan.
Millionaires Migaration
While much attention is often focused on the impact of high-net-worth individuals on the luxury residential sector, their influence on commercial real estate is equally significant, according to Khan.
“Many ultra-wealthy individuals relocating to the UAE are not simply purchasing homes; they are establishing family offices, investment platforms, private equity firms, venture capital funds, operating companies, and regional headquarters. This creates substantial demand for premium office space and business infrastructure. This migration trend has a multiplier effect. As capital moves into the UAE, businesses, advisors, service providers, and employees follow, further strengthening demand across the commercial property ecosystem,” he said.
From an investor perspective, he said the UAE has positioned itself as a jurisdiction that offers stability, security, tax efficiency, connectivity, and a high quality of life — all factors that continue to attract global wealth.
Spary expressed the similar views and said this trend can only really benefit the UAE, as these types of individuals typically bring wealth with them, they bring experience, and usually a workforce. This then translates into visa and occupational requirements that need to be satisfied by commercial office assets across the region.
“We have certainly seen this impact the strata (sales) market, as well as off-plan office sales, as some of these investors prefer to purchase space and invest more heavily in the UAE upon their arrival. This has led to a buoyant sales market, probably the most buoyant we have seen since the GFC, which has pushed developers to launch this product type with noted success across the Dubai market in particular.
“Whether this trend has impacted the institutional office assets is yet to be seen, as these spaces tend to be leased by multi national corporates seeking long term lease terms i.e. 5-10 years, which has been the preference of such companies across the region for over 20 years now,” he said.
While the long-term fundamentals remain strong, Khan said there are several challenges in the market that should be monitor.
First, supply timing, pricing discipline, construction cost, parking, traffic, service charges, and the risk of mediocre commercial buildings entering the market, are key factors for market stability. “Developers must carefully align new office delivery with actual occupier demand to avoid localised oversupply in certain segments.”
Second, there is also a risk that some owners overprice assets simply because the market is hot. “In my view, the UAE commercial market is strong, but buyers and developers now need to be sharper. The next cycle will reward quality, not just location.”
Third, global economic uncertainty, geopolitical developments, and fluctuations in international capital markets can influence investment sentiment and corporate expansion plans. “That said, competition among regional business hubs is increasing. To maintain its leadership position, the UAE must continue enhancing its regulatory environment, talent attraction initiatives, and business ecosystem.
Spary said regional stability is the greatest risk currently with short to long term impacts of the conflict still largely unknown and heavily dependent on the longevity of the ongoing situation.
“Based on what we can determine so far, certain sectors are more exposed to the conflict, whilst other are proving to be much more resilient and that will likely impact leasing activity. That being said, as we saw with the GFC and the Covid pandemic, the UAE will bounce back stronger than ever and we expect to see rapid growth once the current conflict has been resolved. The timing of this remains uncertain however the fundamentals remain in place to see another sustained push forward.”
Importantly, he said the commercial real estate market has entered this more challenging period in a very different point in the market cycle then was the case during the pandemic, with availability levels at an all-time low (especially across Grade A assets), with strong prevailing demand, and an on-going trend of flight to quality still being prominent.
“This has led to landlords typically being able to maintain their rental levels and occupancy rates across their portfolios and in certain cases, even continue to raise rents where demand is outstripping supply.”
“The next wave of Grade A assets are set to enter the Dubai market during 2027 and 2028, creating a further catalyst for occupier growth, but large-scale developments such as the DIFC Zabeel District are highlighted as the real game changers, significantly impacting the overall direction of the leasing market,” Spary said.
Looking ahead, industry specialists said the UAE commercial real estate market remains well-positioned to navigate the geopolitical tensions as the government has consistently demonstrated a proactive approach to supporting economic activity, including recent measures to maintain liquidity across key sectors. As conditions stabilise, the commercial market is expected to regain momentum, supported by strong fundamentals, continued business expansion, and a depth of demand that reinforces the UAE’s long-term growth trajectory.
“From our perspective at Zane Development, the UAE commercial real estate sector is entering a phase of institutional maturity. Demand is increasingly driven by genuine business expansion, global capital inflows, and long-term economic transformation rather than short-term market cycles. As a result, we remain highly optimistic about the sector’s trajectory over the coming five years, particularly within the premium office and mixed-use commercial segments,” Khan concluded.
