Macro Growth Outlook Moderates Amidst Current Regional Conditions

Read CBRE’s UAE Real Estate Market Review – Q2 2026 for our latest macroeconomic and real estate market overview and outlook, covering UAE’s estate sectors.

Key takeaways from the report include: 

• The UAE real estate market continued to show durability in Q2 2026 despite a challenging macroeconomic backdrop and ongoing regional disruptions, with office and industrial markets sustaining growth amid supply constraints and resilient occupier demand.
• The country’s 2026 growth outlook has been revised down, with a marginal GDP contraction of 0.04% forecast this year, reflecting disruption to trade, tourism, aviation and other consumer-facing sectors, though a strong recovery is expected in 2027 as conditions stabilize.
• Office market fundamentals remained robust across Dubai and Abu Dhabi. Dubai office rents rose by 13% year-on-year, with prime rents up 16% and occupancy at approximately 94%, while Abu Dhabi rents increased by nearly 16% and occupancy reached around 96%.
• Dubai’s residential market moderated during the quarter as demand softened, transaction activity declined and new supply helped ease pricing pressures, while Abu Dhabi’s residential sector continued to outperform, supported by strong domestic demand, investor confidence, and sustained off-plan activity.
• Hospitality markets faced pressure from weaker international travel demand and airline disruptions, with UAE hotel occupancy and RevPAR declining sharply year-on-year through June, although operators are responding through domestic tourism campaigns, staycation offers and refurbishment programs.
• Retail markets remained under pressure from softer tourism flows and changing consumer spending patterns, but occupancy levels stayed exceptionally strong across major malls at around 98% in Dubai and 95% in Abu Dhabi.
• The industrial and logistics sector remained a standout performer, supported by government-led industrial strategies, supply chain localization initiatives and foreign direct investment, with leasing activity and rental growth continuing across major industrial hubs.