Dubai retail property sales jump 171% to AED2.1bn in Q1 as off-plan investment surges
Dubai retail property sales soared 171 per cent to $572m in Q1 2026, with off-plan transactions rising 225 per cent, Cavendish Maxwell reports.
Dubai’s retail real estate market recorded a sharp increase in investment activity during the first quarter of 2026, with sales values soaring 171 per cent year-on-year to AED2.1bn ($571.7m), driven by strong demand for off-plan assets.
According to property consultancy Cavendish Maxwell, off-plan retail transaction values climbed 225 per cent to AED1.3bn ($353.9m) between January and March, accounting for more than 60 per cent of total retail sales during the quarter.
The market also saw 485 retail sales transactions in Q1, an increase of almost 52 per cent compared with the same period last year, while the average purchase price rose nearly 80 per cent to AED4.3m($1.17m) per property.
Off-plan retail sales accounted for 254 transactions during the quarter, representing a 75 per cent increase year-on-year.
Monthly sales volumes reached 139 transactions in January, increased to 196 in February before easing to 150 in March.
Dubai retail property sales
Cavendish Maxwell said the moderation in March reflected weaker activity in the ready market, where transactions fell 36 per cent compared with March 2025.
However, the off-plan segment continued to outperform, with March sales increasing 195 per cent year-on-year.
The consultancy said March figures should be interpreted with caution because off-plan transactions are typically registered 60 to 90 days after a sale, meaning future data will provide a clearer picture of demand trends.
Average retail rental rates increased 6.4 per cent year-on-year during the first quarter, although performance varied significantly across Dubai.
Business Bay recorded the strongest rental growth at 12.6 per cent, followed by:
- Downtown Dubai: 12.5 per cent
- Jumeirah Village Circle: 12.2 per cent
- Palm Jumeirah: 10.8 per cent
Nearly 19,800 retail lease contracts were recorded during Q1.
Renewals represented more than 82 per cent of all contracts and increased 1.3 per cent year-on-year, while total leasing activity fell 7 per cent as new leases declined by around one-third, suggesting many occupiers chose to remain in their existing premises.
March saw around 4,600 rental contracts, down 15 per cent compared with the same month in 2025, largely due to a 41 per cent fall in demand for new leases.
Cavendish Maxwell said leasing activity had already begun moderating before the onset of regional uncertainty, indicating that recent developments accelerated an existing trend rather than initiating it.
Vidhi Shah, Director, Head of Commercial Valuation at Cavendish Maxwell, said: “Dubai’s retail sector began the year with positive market fundamentals, supported by population growth, continued economic expansion and resilient occupier demand. While Q1 activity was influenced by Ramadan, Eid Al Fitr and regional uncertainty, market performance remained relatively stable, with robust growth in sales.
“Although leasing contracts were down, rental rates were up across the board, with location a key factor. Our research suggests that community, convenience-led retail assets remained particularly resilient, and we expect this trend to continue. Meanwhile, tourism-linked destinations may face a more challenging environment. As a result, occupiers are likely to remain selective, choosing locations in established catchment areas, with strong footfall.”
Warehousing demand support
Dubai’s warehousing market also continued to benefit from the emirate’s role as a regional logistics and distribution hub.
Around 5,800 warehouse leasing contracts were signed during Q1, with renewals accounting for almost 84 per cent of all leases and increasing 15 per cent year-on-year.
Overall warehouse leasing activity declined 7.3 per cent compared with Q1 2025, while new contracts fell by half.
In March, lease renewals rose almost 29 per cent, although new leases declined by around two-thirds year-on-year, leaving overall warehouse leasing activity 11 per cent lower than March 2025.
Average warehouse rents increased by more than 16 per cent year-on-year across Dubai.
The strongest rental growth was recorded in:
- Jebel Ali: almost 21 per cent
- Dubai Industrial City: 18 per cent
- Dubai Investments Park: nearly 17 per cent
- Ras Al Khor: 16.3 per cent
Vidhi Shah added: “Dubai’s warehousing sector continued to reflect stable structural dynamics in Q1. Rental rates rose in all areas – the result of limited availability in key locations – and demand for well-positioned space at established industrial hubs is expected to continue.
“While activity may remain influenced by evolving regional conditions, market fundamentals remain supportive. Continued investment under the D33 agenda, together with the Dubai Government’s support measures, is expected to reinforce business confidence and support long-term market performance.”
