UAE office rents surged in Q2 2026, outpacing other sectors.
CBRE Middle East reported that Dubai’s average office rents rose 13 percent year on year, with prime leases up 16 percent and occupancy near 94 percent. Abu Dhabi recorded nearly 16 percent rental growth and occupancy around 96 percent, both markets constrained by a shortage of Grade A space.
Office market strength drives rent gains
Dubai’s office market continued to tighten, pushing landlords to raise rents despite a broader slowdown elsewhere. The high occupancy rate of roughly 94 percent reflects strong demand from multinational firms and government agencies seeking premium space.
Abu Dhabi mirrored the trend, with occupancy hovering at about 96 percent. The emirate’s limited supply of Grade A offices kept pressure on rents, delivering the near‑16 percent increase noted by CBRE.
“The second quarter marked a notable shift in the UAE’s economic and real estate landscape, as regional geopolitical developments began to weigh on business activity, tourism flows and broader market sentiment.”
— Matthew Green, Head of Research, CBRE MENA
Residential and hospitality sectors feel the chill
Dubai’s residential market cooled sharply, with transactions down 29 percent year on year to fewer than 37,000 and total values falling to 88 billion dirhams, down from nearly 154 billion a year earlier. Residential rents slipped 2.6 percent, even as sales prices edged up 1.9 percent.
In contrast, Abu Dhabi’s residential values rose 21.6 percent year on year, sales values jumped about 150 percent to 32 billion dirhams, and transaction volumes increased roughly 80 percent, indicating divergent local dynamics.
“While several sectors have seen a moderation in performance, the impact has been uneven, with office and industrial markets continuing to benefit from limited supply and sustained occupier demand.”
— Matthew Green, Head of Research, CBRE MENA
Hospitality performance weakened across the UAE, with hotel occupancy falling 27.7 percentage points year on year through June and revenue per available room dropping 31.8 percent. Dubai bore the brunt of the decline, while Abu Dhabi’s domestic‑ and event‑driven tourism cushioned its impact.
Policy moves aim to balance tenant pressures
Authorities introduced measures to ease tenant strain. Abu Dhabi froze rental increases in June, providing immediate relief to commercial tenants facing rising costs.
Dubai expanded its Flexi Rent initiative, allowing tenants to spread payments in instalments rather than a lump sum, a step aimed at improving cash‑flow flexibility for businesses.
Retail occupancy remained robust, with rates around 98 percent in Dubai and 95 percent in Abu Dhabi, and Dubai rents still rising about 3 percent year on year, underscoring the sector’s resilience despite broader market cooling.
