Office and retail sectors lead Dubai’s commercial property market as transaction value reaches AED 65.23 billion, while investors increasingly favour income-generating assets over land banking

Dubai’s commercial real estate market continued to demonstrate resilience in the first half of 2026 despite geopolitical tensions across West Asia, with transaction values and deal volumes registering strong year-on-year growth.

According to a report by real estate consultancy Anarock, the value of commercial real estate transactions in Dubai rose 8.5 per cent year-on-year to AED 65.23 billion in H1 2026, compared with the corresponding period last year.

Transaction volumes also increased significantly, rising nearly 13 per cent to 6,487 transactions, from 5,754 deals in H1 2025.

The performance was primarily driven by strong activity in the office and retail segments, while the land segment remained a drag on overall transaction volumes.

Office Segment Leads Commercial Property Growth

The office segment emerged as the biggest growth driver for Dubai’s commercial real estate market during H1 2026.

Office transaction values surged nearly 200 per cent year-on-year, increasing from AED 5.28 billion in H1 2025 to AED 15.81 billion in H1 2026.

Transaction volumes also rose 38 per cent to 2,571 deals, highlighting strong demand for commercial office properties.

Average office prices climbed sharply, increasing 85 per cent to AED 3,202 per square foot.

The increase reflects strong demand for premium office space, particularly in established business districts and free zones where Grade A supply remains relatively constrained.

Anuj Kejriwal, chief executive officer of retail and Europe, Middle East and Africa at Anarock Group, said the figures point to intensifying demand for Grade A office space amid limited supply in key business districts and free zones.

Why Investors Are Focusing on Grade A Offices

Dubai’s office market has benefited from the continued expansion of businesses, increasing international corporate presence and population growth.

Companies are increasingly looking for modern office buildings offering better connectivity, infrastructure, amenities and sustainability features.

At the same time, the supply of premium office space in established commercial locations remains relatively limited.

This imbalance between demand and supply has supported rental rates and capital values, making high-quality office properties increasingly attractive to investors seeking stable income and long-term appreciation.

Retail Real Estate Records Strong Growth

The retail property segment also recorded a substantial improvement during H1 2026.

Retail transaction volumes increased 56 per cent year-on-year to 853 deals, while transaction values more than doubled to AED 3.71 billion, compared with AED 1.35 billion in H1 2025.

Average retail property prices rose 54 per cent to AED 3,486 per square foot.

The strong performance reflects growing consumer activity, continued tourism flows and increasing investor interest in well-located retail properties.

Dubai’s expanding population and its position as a major international tourism and business hub are also supporting demand for retail and lifestyle assets.

Investors Move Away From Land Banking

While offices and retail properties performed strongly, land transactions declined during the first half of 2026.

Land transaction volumes fell 29 per cent year-on-year to 941 deals, while transaction value declined 9 per cent to AED 33.19 billion from AED 36.60 billion in H1 2025.

The contrasting performance of land and operational commercial properties suggests that investor preferences may be changing.

Investors appear to be increasingly favouring assets that can generate regular rental income rather than land holdings dependent primarily on future development or capital appreciation.

Kejriwal said investor interest was moving away from land banking and towards income-generating office and retail assets.

Q1 2026 Records Strongest Performance

The first quarter of 2026 was particularly strong for Dubai’s commercial real estate market.

Transaction value reached approximately AED 40.75 billion in Q1 2026, representing an increase of more than 40 per cent year-on-year.

The strong performance came as Dubai continued to strengthen its reputation as a destination for regional and international capital during periods of geopolitical uncertainty.

The emirate’s business-friendly environment, infrastructure, global connectivity and property ownership framework have continued to support investor interest.

Q2 Sees Natural Moderation

Commercial real estate activity moderated during the second quarter compared with the exceptionally strong first quarter.

Transaction volumes fell approximately 22 per cent sequentially, while transaction value declined close to 40 per cent.

However, the moderation does not necessarily indicate a broad-based deterioration in the market.

According to Anarock, Q2 transaction volumes were broadly stable compared with the year-ago period, declining only around 1 per cent year-on-year. Transaction value was approximately 21 per cent lower year-on-year.

The sequential decline was therefore partly a normalisation from the exceptionally strong Q1 performance.

High Base Effect Weighs on Q2 Transaction Value

Large land transactions recorded during Q2 2025 created a high base for comparison.

As a result, the year-on-year decline in transaction value during Q2 2026 needs to be viewed in context.

Importantly, average transaction prices remained strong.

The average price per square foot increased 34 per cent year-on-year to AED 3,186 per square foot in Q2 2026.

This suggests that demand for quality commercial assets remained resilient even as overall transaction activity moderated.

Dubai Continues to Attract Global Capital

Dubai’s position as an international business and investment hub remains a major structural advantage for its real estate market.

The emirate offers several factors that continue to attract international investors, including its tax environment, infrastructure, foreign ownership opportunities and global connectivity.

The continued expansion of the Golden Visa programme is another factor supporting long-term demand from international investors and high-net-worth individuals.

These advantages could help Dubai maintain its attractiveness even when regional geopolitical uncertainty remains elevated.

Geopolitical Risks Remain a Key Concern

Despite the strong first-half performance, Dubai’s commercial property market is not completely insulated from regional risks.

The ongoing West Asia conflict has the potential to affect investor confidence, tourism, trade and broader economic activity.

A prolonged escalation could result in temporary volatility in transaction volumes and capital flows.

However, Dubai has historically demonstrated an ability to attract regional and global capital during periods of uncertainty because of its infrastructure, regulatory environment and status as a major financial and commercial centre.

Tight Office Supply Could Support Property Values

One of the key positives for Dubai’s commercial property market is the shortage of high-quality Grade A office space in important business districts.

As international companies expand their operations and new businesses establish themselves in Dubai, demand for premium offices could remain strong.

If new supply fails to keep pace with demand, rental rates could remain elevated, supporting both property values and investor returns.

This could make established office assets particularly attractive to institutional and international investors.

Retail Market Benefits From Consumer and Tourism Growth

Dubai’s retail real estate market is also benefiting from strong consumer activity.

The city’s tourism industry, expanding expatriate population and growing international business ecosystem are creating sustained demand for shopping, entertainment and lifestyle destinations.

Well-located retail properties with strong tenant profiles and high footfall could therefore continue to attract investors.

However, investors are likely to remain selective, with location, occupancy levels, tenant quality and rental growth becoming increasingly important considerations.

Key Factors That Could Drive Dubai Real Estate in H2 2026

Several factors are expected to influence Dubai’s commercial property market during the remainder of the year:

• Continued demand for Grade A office space

• Limited supply in established business districts

• Rising office rentals

• Population growth and international migration

• Expansion of global companies in Dubai

• Strong tourism and consumer spending

• Foreign investor participation

• Golden Visa-related demand

• Infrastructure development

• Dubai’s tax and ownership advantages

• Regional geopolitical developments

The interaction between these structural growth factors and short-term geopolitical risks will determine the pace of commercial real estate activity during the second half of 2026.

Risks Investors Need to Monitor

Despite the positive market indicators, investors should remain aware of several risks.

Geopolitical uncertainty

Further escalation in the region could temporarily affect capital flows, tourism and business sentiment.

Elevated valuations

Strong price growth in premium office and retail assets could result in expensive valuations in certain locations.

Interest-rate movements

Changes in global interest rates could affect borrowing costs, property financing and investment decisions.

New supply

A sharp increase in commercial property supply could put pressure on rents and occupancy in specific submarkets.

Economic slowdown

A slowdown in global or regional economic growth could affect corporate expansion and demand for office and retail space.

Dubai Commercial Real Estate Enters H2 2026 on a Stronger Footing

Dubai’s first-half commercial real estate performance indicates that the market continues to attract substantial investment despite challenging geopolitical conditions.

The 8.5 per cent year-on-year increase in transaction value and 13 per cent rise in transaction volumes highlight the underlying strength of the market.

The strongest performance came from office and retail assets, suggesting that investors are increasingly prioritising established properties capable of generating recurring income.

At the same time, the decline in land transactions indicates a possible shift away from speculative land banking towards operational commercial assets.

Market Outlook

Dubai’s commercial real estate market is likely to remain on a growth trajectory through the remainder of 2026, although quarterly transaction activity could remain volatile.

The office segment is expected to remain a key growth engine, supported by limited Grade A supply, rising rentals and sustained occupier demand. Retail assets could also benefit from Dubai’s growing consumer economy, tourism activity and increasing investor appetite for income-generating properties.

The Q2 slowdown should be interpreted against the exceptionally strong Q1 performance and the high base created by large land transactions in the previous year. The continued increase in average prices indicates that demand for quality commercial properties remains firm.

For investors, Dubai’s tax advantages, foreign ownership framework, infrastructure, international connectivity and Golden Visa programme remain important long-term positives. However, geopolitical developments, interest rates, valuations and future property supply will remain key monitorables.

Overall, H1 2026 data suggests that Dubai continues to strengthen its position as a global commercial real estate destination, with investor preferences increasingly shifting towards high-quality, income-generating office and retail assets rather than speculative land holdings.