Dubai’s retail real estate market is experiencing a remarkable boom, with a significant surge in sales and rental activity. As tenants prioritize retaining their existing prime spaces amid limited availability, the landscape of retail and warehousing is rapidly evolving.

Retail Sales Surge

According to the prominent real estate consultancy Cavendish Maxwell, sales transactions in Dubai’s retail sector soared nearly 50% year-on-year, reaching AED 4.6 billion in 2025. Approximately 1,450 sales were recorded, marking a 7.6% increase from the previous year, with the off-plan sector representing over half of these transactions. Notably, off-plan sales have skyrocketed by more than 830% over the last five years, increasing from just 79 in 2021 to nearly 740 in 2025. This trend reflects growing investor confidence in Dubai’s retail market, as well as an ongoing shift towards off-plan purchases, indicating a healthy long-term outlook.

Shifts in Rental Trends

In the rental market, the number of lease renewals experienced a 6.5% increase in 2025, while new leases dropped by 15.7%. This shift underscores a clear preference among tenants to stay in established locales rather than seek new spaces, which are becoming scarce in high-demand areas. Rental costs on average rose by 7.1%, with increases reaching as high as 15% in some regions. Vidhi Shah, Director and Head of Commercial Valuation at Cavendish Maxwell, noted that the limited availability of prime locations is prompting tenants to opt for renewing their current leases, which were up 4% last year. In comparison, new contracts came with substantial hikes, averaging around 14% higher than previous agreements.

Looking ahead, the Dubai retail market is poised for expansion, driven by a variety of community-centric developments aimed at enhancing convenience and promoting localized shopping experiences. Upcoming projects include Dubai Square, Ghaf Woods Mall, and Sobha Mall, among others. This shift aligns with evolving consumer preferences that prioritize accessibility in retail environments.

Resilience in Warehousing Sector

The warehousing segment in Dubai also showed impressive growth in 2025, with a surge in rental values contributing to a total of AED 3.2 billion. Rental rates rose by an average of 17.6%, with the most significant increases occurring in key areas such as Jebel Ali, where rates climbed by 22.1%. Similar trends were observed in Dubai Industrial City and Dubai Investments Park, indicating a robust demand for warehouse spaces.

As e-commerce continues to thrive in the region, tenants are increasingly renewing their leases rather than seeking relocation, evidenced by an 18% increase in renewals versus a substantial drop of nearly 30% in new contracts. The demand is particularly strong for mid-sized warehouse units, which accounted for over 52% of the rental market, highlighting the operational needs of small to medium-sized enterprises, trading companies, and e-commerce businesses.

Outlook for 2025 and Beyond

Cavendish Maxwell’s report suggests that the overall outlook for both retail and warehousing sectors will heavily rely on various market dynamics, including tourism trends, population growth, and changes in trade flows. The resilience of the Dubai market is bolstered by a history of adaptability and ongoing investments in line with the D33 economic agenda. As the emirate continues to position itself as a hub for international business and commerce, both sectors are expected to sustain their growth trajectories, reflecting Dubai’s commitment to enhancing its retail and warehousing landscapes.

Overall, Dubai’s retail and warehousing markets demonstrate a dynamic interplay between tenant preferences, site availability, and economic factors, setting the stage for ongoing opportunities in the region’s real estate landscape.