Dubai real estate market diverges as industrial and retail surge

Dubai real estate market diverges as industrial and retail surge

Dubai, 10 August 2026 – Dubai’s real estate market continues to show signs of its maturity, with performance increasingly driven by asset type, location and underlying demand rather than broad market-wide growth, according to new research from Chestertons Global. 

The firm’s Q2 2026 Dubai Real Estate Market Report found that while industrial and retail sectors continued to deliver strong annual growth, office and residential markets entered a more measured period following several years of rapid expansion. The findings suggest the market is creating increasingly unique opportunities across different sectors, even as it demonstrates renewed resilience following a period of regional uncertainty earlier in the year. 

Industrial remained Dubai’s standout performer during the quarter, with sector rents rising 23.3% year on year across key logistics corridors as demand for Grade A warehouse space continued to outstrip supply. Growth was driven by logistics operators, manufacturers and traders, with established logistics corridors benefiting from persistent supply constraints. 

Retail also continued to perform strongly, with average rents reaching AED 273 per sq ft, up 18.3% year on year. Prime destination malls remained close to full occupancy, supported by population growth, tourism and sustained demand for high-quality retail space. 

Meanwhile, Dubai’s office market entered a more balanced phase. Leasing activity remained resilient, with almost 39,000 rental contracts registered during Q2, up 15.2% year on year, although occupiers increasingly favoured smaller, more flexible workspaces while regional geopolitical uncertainty meant larger corporate expansion decisions were delayed. Limited availability of Grade A offices continued to support rental values across prime locations, and government measures, including an AED 1 billion package to support corporate liquidity, helped support the sector during the quarter. 

Residential activity has cooled as buyers took longer to make purchasing decisions and new supply entered the market. However, villas and townhouses continued to outperform apartments, with limited low-density supply supporting further price appreciation.

John Stevens, Chief Executive Officer of Chestertons MENA, said: 

“Dubai’s property market continues to demonstrate resilience, but we’re now seeing a nuanced shift towards a more mature market where performance varies significantly between sectors. Investors and occupiers are becoming increasingly focused on fundamentals such as asset quality, location and long-term demand drivers, creating more selective opportunities across the market.” 

He added: 

“For international investors, Dubai remains one of the world’s most compelling real estate markets. However, success will increasingly depend on identifying areas where structural demand and constrained supply continue to support long-term growth, rather than relying on market-wide appreciation.” 

Looking ahead, Chestertons Global expects Dubai’s property market to remain supported by continued population growth, international investment, tourism and economic diversification. However, the report concludes that future performance will increasingly depend on the ability of individual assets to meet evolving occupier and investor requirements, reinforcing the importance of careful asset selection as the market enters its next phase. 

The Chestertons Global Q2 2026 Dubai Real Estate Market Report provides analysis of residential, office, retail and industrial property trends across Dubai.