23/04/2026 01:35 AST
The UAE's real estate sector remained resilient in the first quarter of 2026 despite conflict in the Middle East, while office markets in Dubai and Abu Dhabi remained tight due to limited new supply, according to CBRE.
In its latest report, the real estate consultancy said that average office rents in Dubai rose 14 percent year on year in the first quarter, while prime rents increased by 16 percent, with occupancy holding at approximately 95 percent.
The shortage of office space also highlights the UAE's status as a regional business haven, even as some infrastructure in Dubai and Abu Dhabi was affected by the recent conflict, causing limited casualties and short-term disruption.
In March, several multinational giants, including Amazon, Google and Citigroup, as well as JPMorgan, activated remote work protocols to mitigate the impact of the war in the region.
"Recent geopolitical developments have undeniably influenced sentiment and short-term activity, but the UAE real estate market has showcased its inherent stability," said Matthew Green, head of research at CBRE for the Middle East and North Africa region.
He added that the UAE real estate market fundamentals remain exceptionally strong, supported by structural undersupply across asset classes, proactive government policies, contained inflation, robust liquidity, and the UAE's established role as a global investment hub.
According to the report, Abu Dhabi's office market showed strong resilience amid conflict, with occupancy rates reaching 98 percent and average rents rising 12 percent year on year in the first quarter.
CBRE noted that a limited development pipeline through 2027 is likely to keep market conditions tight, particularly within regulated business zones, where demand remains structurally strong.
In terms of the residential market, Dubai experienced some moderation after years of rapid growth, with rental increases easing to 4.1 percent, while sales price growth slowed to around 9 percent.
"Transaction volumes (in the Dubai residential sector) remained elevated for the quarter overall, though activity declined noticeably in March as buyer sentiment softened. Off-plan transactions continued to dominate, particularly in the mid-market segment, while investor behavior showed early signs of caution amid stabilizing yields," added CBRE.
Abu Dhabi's residential market saw a surge in activity, with transaction volumes rising year on year in the first quarter, total values reaching record levels, and prices continuing to climb.
Arab News
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