The UAE’s property market held its footing in the first quarter of 2026, recording growth across office, hospitality, retail, and industrial sectors, even as the country’s GDP outlook was revised down to 0.3 per cent for the year.
That is the conclusion of CBRE Middle East’s first-quarter market review, which points to structural undersupply, institutional frameworks and the country’s role as a hub for international capital as the forces keeping fundamentals in place.
The downward revision to growth reflects the effects of regional geopolitical disruptions, logistical constraints, and a slowdown across certain non-oil sectors.
UAE real estate market holds firm in Q1 2026 fespite geopolitical headwinds: CBRE
The Central Bank of the UAE’s AED 1 trillion asset base and a five-pillar Resilience Package – designed to bolster liquidity and stabilise funding ratios – are among the mechanisms cited as cushioning the economy.
S&P Global Ratings reaffirmed the UAE’s stable AA/A-1+ rating during the quarter, pointing to the country’s fiscal buffers and its ability to deploy emergency land corridors to bypass maritime disruptions.
“Recent geopolitical developments have undeniably influenced sentiment and short-term activity, but the UAE real estate market has showcased its inherent stability. Structural undersupply across various asset classes, well-established institutional frameworks, and the country’s pivotal role as a destination for international capital have collectively strengthened market fundamentals,” Matthew Green, Head of Research at CBRE MENA said in a statement.
Office markets in both Dubai and Abu Dhabi remained under strain from a shortage of Grade A space. In Dubai, average office rents rose 14 per cent year-on-year and prime rents climbed 16 per cent, with occupancy holding at approximately 95 per cent.
Some multinational occupiers shifted temporarily to remote working or delayed expansion decisions, yet rental performance held firm.
Abu Dhabi’s office market posted occupancy of 98 per cent, with average rents up 12 per cent year-on-year. CBRE noted that a limited development pipeline through 2027 is expected to keep conditions tight, particularly within regulated business zones where demand is structurally driven.
Dubai’s residential market entered a phase of moderation in the first quarter, following several years of rapid growth. Rental increases eased to 4.1 per cent year-on-year, while sales price growth slowed to around 9 per cent.
Transaction volumes remained at a level for the quarter overall, though activity fell in March as buyer sentiment softened. Off-plan transactions continued to dominate, particularly in the mid-market segment, while early signs of caution were visible among investors as yields stabilised.
Abu Dhabi told a different story. Its residential market recorded a rise in activity, driven by high-value off-plan sales and demand for premium developments. Transaction volumes rose year-on-year, and total transaction values reached record levels. Prices continued to climb, led by apartments, though rental growth showed early signs of decelerating.
The UAE’s hospitality sector entered the first quarter of 2026 from a position of strength, having concluded 2025 on record figures. Dubai welcomed 19.6 million visitors in 2025, a 5 per cent year-on-year increase, with the city achieving 80.7 per cent occupancy and 11 per cent growth in revenue per available room.
Abu Dhabi welcomed nearly 6 million visitors during the same period, with RevPAR growing by 19 per cent. Ras Al Khaimah also posted a year of standout performance, welcoming 1.36 million visitors and recording 12 per cent growth in revenues.
That momentum carried into the start of 2026. Dubai welcomed 2 million visitors in January alone, with an occupancy rate of 86 per cent and rises in both average daily rate and RevPAR.
Across the UAE as a whole, the hospitality market averaged 85 per cent occupancy through January and February. As regional travel patterns shifted in March, operators responded by leaning on domestic demand, rolling out staycation offers to stabilise occupancy and support food and beverage revenues.
The retail sector absorbed disruption from changes in international tourism, with prime mall assets maintaining their performance. Occupancy rates stood at 98 per cent in Dubai and 95 per cent in Abu Dhabi, supporting stable rental returns.
The quarter brought several milestones, including Primark’s debut in the UAE market and the launch of Majid Al Futtaim’s Ma’an initiative, designed to support local entrepreneurs.
Industrial and logistics property recorded some of the quarter’s rental gains. Dubai posted double-digit rental growth in the sector, while Abu Dhabi saw steady increases across its main industrial hubs. Investment in logistics infrastructure and supply chain resilience continued to support the medium-term outlook for the sector.
UAE financial markets showed signs of recovery during the quarter. USD-denominated GCC bonds recovered more than half of their losses from late February, and credit spreads tightened amid what CBRE described as a mood of emerging geopolitical optimism.
