Off-plan sales surge more than 830% in five years

• Tenants prioritise retaining prime space amid limited availability

Dubai, UAE – Sales transactions in Dubai’s retail real estate market climbed almost 50% year-on-year to AED4.6 billion in 2025, says leading real estate advisory group and property consultancy, Cavendish Maxwell.

Around 1,450 sales were secured last year – a 7.6% increase on 2025 – with the off-plan sector accounting for more than half of them. Off-plan sales transactions have surged more than 830% in the last five years, rising from 79 in 2021 to nearly 740 in 2025, according to Cavendish Maxwell’s latest insight into Dubai’s retail and warehousing sectors.

In the retail rental market, the number of lease renewals rose by 6.5% in 2025, while new leases were down 15.7%, highlighting tenant preferences to stay in existing premises because of limited new availability at prime locations. Rental costs were up an average 7.1% – and by as much as 15% in some areas, driven by growth in community retail and steady performance across large scale retail destinations.

Vidhi Shah, Director, Head of Commercial Valuation at Cavendish Maxwell, said: “Dubai’s retail sector showed sustained growth and resilience in 2025, backed by strong fundamentals including a record 19.6 million tourists and unprecedented population growth. Sales values rose sharply and off-plan purchases are now eight times as high as there were just five years ago, signalling strong long-term investor confidence in the retail market.

“With prime, high-footfall locations in short supply and rental rates on the rise, tenants are increasingly favouring renewing existing leases over moving to new premises to save costs and avoid the risk of relocating somewhere less established. Prices for renewals rose by 4% last year, whereas new contracts were, on average, 14% higher.

“Looking ahead, Dubai’s retail offering is expected to expand this year with raft of community-centric developments in the pipeline that reflect a broader shift towards localised retail that prioritises convenience and proximity over the more traditional, large-scale destination-led formats,” she added.

Neighourhood retail at Jumeirah Village Circle commanded the highest rental growth in 2025, at 15.5% higher than in 2024, while Business Bay and Palm Jumeirah saw 13.7% hikes and Downtown Dubai 13.1%. Upcoming community developments include Dubai Square, Ghaf Woods Mall, Sobha Mall, Liwan Mall, Villa Square and South Bay Mall.

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Dubai’s warehousing segment also remained robust in 2025, reflecting the continued rise in e-commerce activity in the emirate. Total rental values grew by more than 14% to AED3.2 billion in 2025, with rental rates climbing an average 17.6% – and considerably more in key areas, according to Cavendish Maxwell’s insight and analysis.

The biggest hikes were in Jebel Ali, at 22.1%, followed by Dubai Industrial City (18.9%), Dubai Investments Park (18.7%) and Umm Ramool (18.2%).  As with the retail sector, warehouse tenants are renewing rather than relocating, with an 18% surge in renewals last year, compared to a drop of almost 30% in new contracts.

Warehouse activity in 2025 was focused on mid-sized units of between 2,001 and 5,000 sq ft, which accounted for more than half (52%) of rents, driven by strong demand from SMEs, trading companies and e-commerce businesses seeking functional storage space. Just under 20% of contracts were for units of 10,000 sq ft, with the rest split roughly equally between premises of 2,000 sq ft and those between 5,001 and 10,000 sq ft.

Vidhi Shah said: “Domestic and international business continue to enter the warehousing market, prioritising modern, high-spec facilities that support automation, operational efficiency and specialised infrastructure.  We expect this trend to continue this year, especially with government led-initiatives like the UAE Global Centre of Trade programme, which aims to attract leading international trading companies to set up in Dubai.”

Cavendish Maxwell added that the overall outlook for the rest of the year in both the retail and warehouse sectors will depend on several market conditions. While tourism, population growth, e-commerce and trade have historically supported demand, regional conditions that impact visitor numbers and spending patterns may influence demand for retail space demand, whereas changes in trade flows or supply chain dynamics could affect warehousing needs. However, Dubai’s proven track record of agility, combined with ongoing investment in line with the D33 economic agenda is expected to support overall market resilience.

About Cavendish Maxwell

Cavendish Maxwell is a leading Middle East real estate advisory group and property consultant, with offices in Dubai, Abu Dhabi, Sharjah, Ajman, Ras Al Khaimah, Kuwait City, Muscat and Riyadh. The company is a member of the Royal Institution of Chartered Surveyors (RICS) and offers the full range of property-related services, including valuation, strategic advisory, research, project and building consultancy and investment and commercial agency expertise. With a team of experienced professionals and a commitment to delivering exceptional service, Cavendish Maxwell has established itself as a trusted advisor in the regional real estate market.