Sales in Dubai’s retail real estate market have seen a remarkable increase, with a 171% surge year-on-year, reaching AED 2.1 billion in the first quarter of 2026. According to Cavendish Maxwell, a prominent real estate advisory group, the off-plan transactions alone jumped by an astonishing 225%.

Record-Breaking Retail Transactions

In the first quarter, approximately 485 retail transactions were finalized, showing a nearly 52% increase compared to last year. The average property price climbed to AED 4.3 million, marking an almost 80% year-on-year increase. Notably, off-plan retail sales contributed significantly, generating AED 1.3 billion, accounting for over 60% of the total sales values. The number of off-plan transactions surged by 75%, reflecting a strong demand for new developments in the market.

Monthly sales volumes fluctuated, starting with 139 in January, rising to 196 in February, and then modestly declining to 150 in March. This decrease was attributed to a 36% drop in ready-market activity compared to March 2025. However, the off-plan segment showed resilience, with sales improving by 195% from the previous March. It’s essential to interpret March figures cautiously, as the registration lag of 60 to 90 days for off-plan sales may affect data clarity in the coming months.

Rental Trends in Retail Spaces

In Q1, average retail rental rates increased by 6.4% year-on-year, though there were significant variances based on location. Business Bay led the increase with a remarkable hike of 12.6%, followed closely by Downtown Dubai at 12.5%, Jumeirah Village Circle at 12.2%, and Palm Jumeirah at 10.8%. A total of 19,800 rental contracts were recorded, with renewals, which made up over 82%, experiencing a slight uptick of 1.3% from last year. However, new lease contracts saw a significant decrease of one-third, implying that many businesses opted to remain in their current locations amidst economic uncertainties.

In March alone, 4,600 rental contracts were registered, a reduction of 15% compared to March 2025. This decline was primarily due to the sharp decrease in demand for new leases, which fell almost 41% year-on-year. Cavendish Maxwell indicated that this moderation in leasing activity began even before recent regional instabilities, indicating an existing trend rather than a reactive shift.

The State of Dubai’s Warehousing Sector

Dubai’s warehousing market is experiencing a similar trend, bolstered by the emirate’s strategic position as a trade and distribution hub. In the first quarter, 5,800 leasing agreements were recorded, with renewals dominating the market, making up nearly 84% of contracts and reflecting a 15% increase year-on-year. However, there was a 7.3% overall decrease in leases, and new contracts saw a staggering drop of 50%, suggesting a slowdown in both existing tenant expansion and new tenant activity.

Despite the declines, average rental rates in the warehousing sector increased over 16% compared to the previous year, significantly higher in key areas like Jebel Ali, where prices rose nearly 21%. Leasing activity predominantly centered on small to mid-sized units, with spaces ranging from 2,000 to 5,000 square feet accounting for more than half of all transactions. This trend shows a sustained demand for flexible spaces favored by small and medium enterprises.

As per Vidhi Shah, Director and Head of Commercial Valuation at Cavendish Maxwell, the warehousing sector remains stable, driven by limited availability in crucial locations. Despite potential regional uncertainties, the underlying market fundamentals are strong, and continuous investment initiatives from the Dubai Government are expected to bolster business confidence and support long-term market stability.