Dubai’s retail property market has experienced remarkable growth in the first half of 2026, with total sales value soaring 176.7% to AED3.8 billion ($1.03 billion), according to a report by Cavendish Maxwell. The surge in sales was largely driven by off-plan activity, which saw a significant increase of 109.6%, accounting for 58.8% of transactions and 68.3% of the total sales value. The average transaction value also rose by 77.3% to AED4.4 million, although there was a quarter-on-quarter decline of 25.4% in Q2, indicating a potential moderation from the high levels recorded in Q1.
Leasing Activity and Trends
In terms of leasing, Dubai recorded approximately 33,300 retail property contracts in H1 2026, reflecting a 5.8% year-on-year decline. This decrease was primarily due to a 26.3% drop in new leasing contracts, while renewal activity remained stable, increasing by 1.5%. This trend suggests a cautious approach among occupiers, who are opting to retain existing locations rather than expand into new spaces.
The second quarter of 2026 saw a more pronounced decline in leasing activity, with total contracts down 9.8% year-on-year. The moderation in both new and renewal activity coincided with heightened regional uncertainty, which may have led businesses to postpone relocation and expansion decisions. If this trend continues, it could limit tenant diversity across retail locations, potentially affecting footfall and visitor activity.
Vidhi Shah, Director and Head of Commercial Valuation at Cavendish Maxwell, noted that occupancy rates at Dubai’s flagship malls and community retail hubs are averaging around 98%. As the winter events season approaches, these established destinations are expected to perform well, despite a more selective leasing environment.
Rental Rates and Market Outlook
Retail rental rates in Dubai increased by 4.4% year-on-year in H1 2026, with all monitored locations showing annual growth. However, there was a slight quarterly decline of 0.8% in average rental rates during Q2, indicating a moderation in the pace of rental growth amidst greater external uncertainty.
In the warehouse sector, approximately 10,000 rental contracts were recorded in H1 2026, down 4.5% year-on-year. Despite the decline in transaction volumes, total rental value increased by 9.9% to AED1.8 billion. The drop in new contracts, which fell by 51.8%, contrasted with a 21.6% rise in renewal contracts, highlighting a market characterized by strong retention but reduced appetite for new space commitments.
As Dubai’s retail and warehouse markets enter the second half of 2026, they are expected to adopt a more selective approach. Businesses are likely to remain cautious about expansion due to regional uncertainties and rising costs. While established retail destinations and well-located warehouse facilities should continue to attract interest, new leasing and expansion decisions may take longer as companies focus on optimizing their existing spaces.
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