The UAE real estate market experienced constrained supply during 2025, which contributed to notable growth in office and warehouse rents. In contrast, growth in residential sales and rents slowed due to the substantial influx of new supply and ongoing construction projects scheduled for completion in 2026, helping to create a more stable market environment.
According to statements by Prathyusha Gurrapu, Head of Research at Cushman & Wakefield, during a recent market update video, the fundamentals of the UAE real estate market remain strong, particularly across the office, industrial, and residential sectors. Limited supply, high occupancy rates, and evolving tenant behavior have all supported this stability.
According to a study conducted by Cushman & Wakefield, office markets in Dubai and Abu Dhabi are witnessing rising demand, with occupancy rates reaching 92% in both cities. This is driven by the scarcity of new office developments—especially prime Grade A, single-owner buildings—along with their strategic locations. These factors have pushed rental values higher and strengthened landlord-favorable market conditions. In Dubai specifically, demand for high-quality office space has intensified, leading to a notable increase in rents in prime locations.
Cushman & Wakefield data revealed that office rents rose by 19% year-on-year in Dubai and 29% year-on-year in Abu Dhabi, reflecting sustained interest from both tenants and investors. At the same time, Dubai’s office sales market showed clear momentum, particularly for single-owner, prime-grade assets, as investors seek income-generating commercial properties amid limited supply.
Prathyusha Gurrapu confirmed that the lack of new supply and minimal near-term pipeline impact remain key drivers in the office markets of Dubai and Abu Dhabi. She added that prime, strategically located, single-owner Grade A assets continue to be the most in demand.
The industrial and logistics sector also emerged as one of the strongest-performing segments in the UAE real estate market, benefiting from high occupancy rates of up to 95% in both cities and rental growth of 18% year-on-year in Dubai and 13% year-on-year in Abu Dhabi. Gurrapu noted that strong demand for industrial assets, coupled with limited supply, has made this sector one of the standout performers.
She also highlighted a shift toward build-to-suit requirements and early commitments, with occupiers leasing spaces well ahead of completion. This trend is prompting developers to respond more flexibly to the growing demand for customized facilities.
In contrast, the residential real estate market is undergoing a more moderate phase following several years of rapid growth. While prices increased by 13% year-on-year, rental growth slowed to 6%, indicating a healthy and sustainable market balance. Prime locations such as Palm Jumeirah and Downtown Dubai continued to outperform due to their prestigious addresses and limited supply.
The year 2025 recorded the highest level of new residential unit deliveries in five years, totaling approximately 44,000 units. With around 69,000 additional units expected to enter the market in 2026, further moderation in rental and sales price growth is anticipated. Gurrapu emphasized that this expansion in supply will enhance long-term market stability.
For a comprehensive overview of the UAE real estate market’s performance across key sectors—including office, industrial, and residential—viewers can watch the Cushman & Wakefield video featuring Prathyusha Gurrapu.
