Dubai’s retail real estate sector reached AED1.1 billion in sales for the first time, driven by rising demand, tight supply, and investor confidence in premium retail assets.
DUBAI: Dubai’s retail property market has posted its strongest quarterly performance to date, reaching AED1.1 billion in sales across 400 transactions, according to the latest report by Cavendish Maxwell. The surge reflects robust investor confidence and an increasingly competitive landscape for high-demand retail and logistics assets.
This marks the first time that quarterly retail sales have crossed the AED1 billion mark in the emirate. Compared to the previous quarter, transactions rose nearly 80%, while year-on-year growth stood at 30%. Off-plan retail transactions more than doubled over the quarter and saw a 65% increase on an annual basis.
Despite a drop in new leasing contracts, rental renewals increased by 6% compared to Q3 2024, showing that tenants are choosing to stay at their existing locations despite rising costs. With occupancy nearing capacity and limited supply, rental rates in some districts surged by up to 15%. Key areas like Jumeirah Lakes Towers, Business Bay and Dubai Marina led the rental growth curve.
The report also highlights strong performance at major retail hubs. Dubai Mall, one of the city’s iconic destinations, continues to operate at 98% occupancy, demonstrating consistent footfall and tenant demand among both residents and tourists. This aligns with wider trends toward experiential retail in high-traffic zones.
The warehousing sector showed similar momentum. Rental renewal contracts soared by 62% year-on-year, as businesses opted to hold onto their current spaces amidst limited new availability. Warehouse rents climbed 17% on average, with Jebel Ali topping the list at 21% growth. Other hot spots included Ras Al Khor, Dubai Industrial City, and Dubai Investments Park.
According to Vidhi Shah, Director at Cavendish Maxwell, Dubai’s real estate fundamentals remain strong. She noted that retail growth is being driven by population increase, tourism recovery, and ongoing investment in infrastructure like the AED5 billion expansion at Mall of the Emirates.
As Dubai cements its status as a logistics and retail hub, both retail and warehousing sectors are expected to maintain upward momentum in the coming quarters.
