Dubai’s commercial property market shows resilience despite geopolitical challenges. While high-value transactions have slowed down, demand for office space remains strong due to limited availability. Investors are shifting their focus towards smaller deals as businesses hesitate to commit to larger investments. Recent reports indicate that although the overall volume of commercial property transactions experienced a slight year-on-year decrease in the second quarter of 2026, the decline in transaction value is more pronounced, underscoring a notable shift in the types of deals being made.

Stable Demand Amidst Market Shifts

According to Anarock, the number of commercial transactions in Dubai was almost unchanged in the second quarter of 2026, with 2,844 deals compared to 2,875 in the same period the previous year. However, the value of these transactions fell drastically from AED 31.15 billion to AED 24.49 billion. Anuj Kejriwal, CEO of EMEA at Anarock, noted that while the evolving geopolitical landscape has slowed down bigger deals, the demand for office and retail spaces continues to flourish. “The overall commercial sales value did come down, but the number of deals remained stable,” he emphasized.

Anarock’s data highlights that Indian investors, already among the most active foreign buyers in the UAE, are diversifying their interests beyond residential properties to include commercial real estate. This shift indicates a broader acceptance of the commercial market, even as uncertainties linger.

Delays in Significant Transactions

Kejriwal pointed out that high-value, single-buyer transactions are likely to face delays as companies prolong their decision-making processes. Unlike larger deals, office and retail transactions involve quicker decision-making, helping these sectors maintain growth momentum. Real estate expert Aditya Earnest John observed that many businesses are adopting a more cautious approach, leaning towards leasing instead of purchasing while they seek greater clarity in the market. However, he believes this behavior doesn’t signal a fundamental change in the market dynamics.

According to John, firms are taking longer to finalize expansion and relocation plans, which has temporarily affected transaction volume. Nevertheless, he emphasizes that Dubai is still grappling with a shortage of high-quality Grade A office spaces, with a significant portion of future supply still under construction, indicating sustained demand.

Office Space Surges Despite Market Challenges

This situation is reflected in the performance of office space transactions. While other categories, such as land and hotels, showed a substantial decline in sales value—ranging from 24% to 59% year-on-year—office deals rose by 4.4%, with sales values soaring to AED 7.6 billion. It suggests that while some sectors are struggling, office spaces are becoming increasingly sought after.

Kejriwal explained, “The weakness in commercial real estate is centered on specific subcategories rather than the overall market.” He highlighted that sectors like industrial properties and hotels are more affected by single large buyers and prolonged negotiation cycles, which are particularly vulnerable to war-related hesitations. Contrastingly, the increasing demand for office spaces points to a healthier segment of the commercial real estate landscape, evidenced by a remarkable 195% surge in transaction value last quarter.

In summary, despite prevailing geopolitical tensions and their effects on larger commercial transactions, Dubai’s office space market remains vibrant. This sustained demand, coupled with a limited supply of high-quality office spaces, suggests that the city’s commercial real estate sector may continue to thrive even in the face of uncertainty.