UAE Real Estate Market Remains Resilient Despite Regional Disruptions

Dubai – April 22, 2026:

CBRE Middle East, the global leader in commercial real estate services, released its UAE Real Estate Market Review for the first quarter of 2026. The report highlights the UAE real estate market’s resilience in the first quarter of the year despite heightened regional geopolitical tensions and a softer economic outlook.

The UAE’s GDP growth outlook for 2026 has been revised to 0.3%, reflecting the impact of regional geopolitical disruptions, logistical constraints, and a slowdown across selected non-oil sectors. However, despite this tempered outlook, the broader economy is cushioned from more severe near-term impacts by contained inflation, strong liquidity, and proactive policy support. Regional financial markets, in particular, have demonstrated a recovery, with USD-denominated GCC bonds regaining over half their late-February losses and credit spreads tightening due to emerging geopolitical optimism.

The banking system itself remains robust, supported by the CBUAE’s AED 1 trillion asset base and a five-pillar Resilience Package designed to enhance liquidity and stabilize funding ratios. This underlying strength is further affirmed by S&P Global Ratings, which reaffirmed the UAE’s stable AA/A-1+ rating, citing the Federation’s immense fiscal buffers and strategic agility, including the successful deployment of emergency land corridors to bypass maritime disruptions.

Office markets across Dubai and Abu Dhabi remained tight during the quarter, supported by limited new supply deliveries. In Dubai, average office rents rose 14% year-on-year, while prime rents increased by 16%, with occupancy holding at approximately 95%. Continued shortages of Grade A space across key business districts helped underpin rental performance, despite some multinational occupiers temporarily shifting to remote working or delaying expansion decisions.
Abu Dhabi’s office market recorded similar strength, with occupancy rates reaching 98% and average rents rising 12% year-on-year. CBRE noted that a limited development pipeline through 2027 is likely to keep market conditions tight, particularly within regulated business zones, where demand remains structurally strong.

Dubai’s Residential market entered a temporary phase of moderation following several years of rapid growth. Rental increases eased to 4.1% year-on-year, while sales price growth slowed to around 9%. Transaction volumes remained elevated for the quarter overall, though activity declined noticeably in March as buyer sentiment softened. Off-plan transactions continued to dominate, particularly in the mid-market segment, while investor behavior showed early signs of caution amid stabilizing yields.
In contrast, Abu Dhabi’s residential market recorded a sharp increase in activity, driven by high-value off-plan sales and strong demand for premium

developments. Transaction volumes rose significantly year-on-year, while total transaction values reached record levels. Residential prices continued to climb, led by apartments, although rental growth showed early indications of deceleration.

The UAE’s Hospitality market demonstrated strength through 2025 and into early 2026. Dubai concluded 2025 with a record 19.6 million arrivals, marking a 5% year-on-year increase, with strong contributions from key international markets. Hotel performance in 2025 was robust, with Dubai achieving 80.7% occupancy and an 11% growth in RevPAR, while Abu Dhabi welcomed nearly 6 million visitors and saw its RevPAR grow by 19%. Ras Al Khaimah also posted a standout performance, welcoming 1.36 million visitors with a 12% increase in revenues.

This positive momentum continued into the start of 2026, with Dubai welcoming 2 million visitors in January, alongside significant surges in ADR and RevPAR and an 86% occupancy rate. Nationwide, the UAE hospitality market operated at near-peak levels during January and February 2026, averaging 85% occupancy.

While the sector is now navigating a complex shift in regional travel patterns and external disruptions emerging in March, it entered this period from a position of significant strength. Operators have swiftly responded by proactively leveraging domestic demand, rolling out attractive staycation offers to help stabilize occupancy, drive F&B revenue and to support operations as international travel patterns evolve.

The UAE Retail market is navigating sudden shifts in consumer behavior and loss of international tourism, with prime mall assets still able to maintain robust performances. Occupancy rates remain high at 98% in Dubai and 95% in Abu Dhabi, supporting stable rental returns. This quarter saw significant milestones, including Primark’s UAE debut and initiatives like Majid Al Futtaim’s Ma’an supporting local entrepreneurs.

The Industrial and logistics market continued to outperform, supported by strong demand and constrained availability. Dubai recorded double-digit rental growth, while Abu Dhabi saw steady increases across its main industrial hubs. Investment in logistics infrastructure and supply chain resilience initiatives continues to support the sector’s medium-term outlook.
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Matthew Green, Head of Research at CBRE MENA comments:

“Recent geopolitical developments have undeniably influenced sentiment and short-term activity, but the UAE real estate market has showcased its inherent stability. Structural undersupply across various asset classes, well-established institutional frameworks, and the country’s pivotal role as a destination for international capital have collectively strengthened market fundamentals.”

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