The commercial property market in Dubai saw a significant downturn in the third quarter of 2026, as reported by CRC Property. Investors are gravitating towards smaller office units, leading to a notable decline in overall sales value. While the volume of office transactions has increased, their total value has sharply fallen, indicating a shift in market dynamics.

### Decline in Commercial Property Sales Value

In the third quarter, the overall sales value of commercial properties dropped by 25.6% compared to the previous quarter, totaling AED 18.04 billion (approximately $4.91 billion). Transaction volumes also saw a slight decrease of 1.8%, falling to 2,789 deals. Interestingly, office transactions did rise by 11.7% from the second quarter, reaching 1,123 units. However, the combined value of these transactions plummeted by 42%, down to AED 4.35 billion ($1.18 billion). The average deal size significantly shrank from AED 7.46 million to AED 3.87 million, reflecting a marked shift towards smaller investments in the office sector.

Behnam Bargh, managing director of CRC Property, characterized the third quarter as a period of stabilization rather than one of recovery. While deal counts remained robust, the market’s focus has unmistakably shifted toward smaller transactions, which are becoming increasingly prevalent.

### Jebel Ali Emerges as a Key Market Player

In an interesting turn of events, Downtown Jebel Ali has surpassed Business Bay to become Dubai’s most active office market, accounting for 321 transactions, or 28.6% of the total in the third quarter. Meanwhile, Jumeirah Lakes Towers also saw a resurgence, with a substantial increase of 47.3% in the number of deals, totaling 162. This shift in focus towards Jebel Ali and Jumeirah Lakes Towers signifies a changing landscape in Dubai’s office sector, where secondary office prices experienced a marginal decline of 1.2%, now standing at AED 1,930 per square foot.

Despite the recent drop in overall value, office sales are still 40.4% higher compared to the same period in 2025, indicating a certain resilience in the market amidst the shifting dynamics.

### Emaar Square’s Noteworthy Sale

One of the standout transactions in the third quarter was the sale of Emaar Square Building 3 in Downtown Dubai, which fetched AED 725 million ($197 million) at a net initial yield of roughly 8%. This significant sale serves as a benchmark for valuations of income-generating office properties within the region. The previous owners reported an impressive 44% gross capital gain over a 21-month holding period, showcasing the potential benefits of larger transactions, even as the market leans towards smaller deals.

### Rising Interest in Commercial Land

Commercial land transactions also played a vital role in the third quarter, amounting to AED 6.81 billion ($1.85 billion) and representing about 38% of Dubai’s entire commercial property sales value. Investors are increasingly interested in acquiring industrial sites as opportunities for new land allocations become more limited. This trend underscores the diversified interests of investors who are responding to the evolving market conditions.

Overall, the third quarter of 2026 indicates a transformative period for Dubai’s commercial real estate landscape, spotlighting smaller office units while maintaining interest in significant assets like commercial land and high-value office buildings.