-- The UAE real estate market continued to outperform global benchmarks in H1 2025, delivering strong returns across core sectors despite tighter global conditions. According to Cushman & Wakefield Core’s mid-year commentary, scarcity remains a defining feature - but capital is now moving more selectively across the region’s maturing asset classes.
“Institutional capital still sees the UAE as one of the few global markets offering yield, visibility, and long-term upside - but underwriting assumptions are shifting,” said PP Varghese, Head of Professional Services at Cushman & Wakefield Core. “Scarcity remains, but pricing power now belongs to assets with the right ESG profile, location and covenant strength.”
Office: Prime Supply Under Pressure
Commercial real estate in Dubai, in particular the office sector continues to tighten. Citywide occupancy stands at 92%, with Grade A assets at 95%. Rents have risen 22% year-on-year, averaging AED 190 per sqft, with DIFC commanding the highest premiums. Only 0.89 million sqft of new space is due in 2025, while 6.4 million sqft is scheduled from 2026 onwards. Many of these future assets are already seeing strong pre-leasing interest.
In Abu Dhabi, Grade A occupancy stands at 97% and overall occupancy at 90%. Asking rents have climbed 11% year-on-year to AED 160 per sqft. Over 830,000 sqft of new supply is expected in H2 2025, largely concentrated in Masdar City and The Link, most of which is pre-committed.
Residential: Moderation in Dubai, Momentum in Abu Dhabi
Dubai’s residential market is showing signs of moderation. Q2 2025 sales prices averaged AED 1,822 per sqft, up 14% year-on-year, while rental growth slowed to 7%. Nearly 43,000 new units are expected to be delivered this year - the highest total since 2019. Mid-market apartments are softening, while villa communities remain resilient.
Abu Dhabi continues to accelerate. Citywide sales prices rose 18% year-on-year, with Saadiyat Island up 30% to AED 4,172 per sqft. Rents are up 27% overall, with strong performance across apartment segments. More than 3,600 units are due for handover on Yas Island in 2025, supported by strong pre-sales and structural demand.
Retail: Tenant Strategy Becomes the Growth Driver
The retail market remains robust, with headline occupancy exceeding 95%. Rents at super-regional malls in Dubai, such as The Dubai Mall and Mall of the Emirates, have grown 12–15% year-on-year. Landlords are shifting focus from pure occupancy to destination curation - prioritising homegrown F&B anchors and global brands that localise effectively.
The market is becoming increasingly segmented by catchment, with distinct approaches required in Emirati neighbourhoods versus expat-driven areas. Community retail hubs and hybrid lease models are rising in importance, aligning with the Urban Master Plan 2040 and shifting consumer behaviour.
Looking Ahead
With over 43,000 residential units scheduled for delivery, 6.4 million sqft of upcoming offices for sale in Dubai, and a growing data centre pipeline, the second half of 2025 will test how capital, developers and occupiers respond to deeper market segmentation. Capital remains engaged — but performance will hinge on asset-level discipline.
About Cushman & Wakefield Core
Cushman & Wakefield is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2023, the firm reported revenue of $9.5 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), sustainability and more. Cushman & Wakefield Core is an independently owned and operated affiliate of Cushman & Wakefield, with over 17 years’ experience operating in the UAE. For additional information, visit www.cushwake.ae.
Contact Info:
Name: Rachel Smylie
Email: Send Email
Organization: Cushman & Wakefield Core
Website: https://www.cushwake.ae/en
Release ID: 89167027
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