Dubai Retail Property Sales Jump 171% in Q1 2026, Says Cavendish Maxwell

DUBAI, UAE – Dubai's retail real estate market recorded a strong start to 2026, with sales values surging 171% year-on-year to $572 million (AED2.1 billion) during the first quarter, according to the latest market analysis from real estate advisory and property consultancy Cavendish Maxwell.

The report found that 485 retail property transactions were completed between January and March, representing an increase of nearly 52% compared with the same period last year. Investors paid an average of AED4.3 million per property, reflecting an annual price increase of almost 80%.

Off-Plan Market Drives Sales Growth

Off-plan retail assets continued to dominate market activity, generating $354 million (AED1.3 billion) in sales during the first quarter, accounting for more than 60% of the market's total transaction value.

The number of off-plan transactions increased 75% year-on-year to 254 deals, while off-plan sales values climbed 225%, underlining continued investor confidence in Dubai's future retail developments.

Monthly transaction volumes reached 139 sales in January, increased to 196 in February, before easing to 150 in March. Cavendish Maxwell attributed the moderation primarily to reduced activity in the ready market, where sales declined 36% compared with March 2025.

Despite this, the off-plan segment maintained strong momentum, recording a 195% increase in sales over the same month last year.

The consultancy noted that March figures should be interpreted with caution due to the typical 60 to 90-day registration lag associated with off-plan transactions, with upcoming data expected to provide a clearer picture of market demand.

Read more: Dubai Luxury Off-Plan Home Sales Reach $1.36 Billion in May

Retail Leasing Remains Stable

Average retail rental rates increased 6.4% year-on-year during the first quarter, although rental growth varied significantly across Dubai's commercial districts.

Business Bay recorded the strongest increase at 12.6%, followed by Downtown Dubai (12.5%), Jumeirah Village Circle (12.2%), and Palm Jumeirah (10.8%).

Around 19,800 retail leasing contracts were registered during Q1, with renewals accounting for more than 82% of all agreements and rising 1.3% compared with the previous year.

Overall leasing activity declined 7% year-on-year, while new leases fell by approximately one-third, suggesting that many occupiers chose to renew existing premises rather than relocate.

March saw approximately 4,600 rental contracts, down 15% compared with March 2025, largely due to weaker demand for new leases, which declined almost 41% year-on-year.

According to Cavendish Maxwell, leasing activity had already begun moderating before recent regional developments, indicating that geopolitical uncertainty accelerated an existing trend rather than initiating it.

Commenting on the findings, Vidhi Shah, Director and 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 Sector Maintains Strong Fundamentals

Dubai's warehousing market also continued to benefit from the emirate's position as a regional logistics and distribution hub, supported by ongoing infrastructure investment.

The sector recorded approximately 5,800 leasing contracts during the first quarter, with renewals accounting for nearly 84% of all agreements and increasing 15% year-on-year.

Overall warehouse leasing activity declined 7.3%, while new contracts fell by half, reflecting slower expansion among existing occupiers and softer demand from new tenants.

During March, warehouse lease renewals increased nearly 29%, while new leasing activity declined by almost two-thirds compared with the same month last year. Total leasing activity was down 11% year-on-year.

Warehouse rental rates increased by more than 16% across Dubai during Q1, led by Jebel Ali, where rents rose almost 21%. Other notable increases were recorded in Dubai Industrial City (18%), Dubai Investments Park (nearly 17%), and Ras Al Khor (16.3%).

Demand remained strongest for flexible warehouse formats, with units between 2,000 and 5,000 square feet accounting for more than half of all leases. Larger facilities exceeding 10,000 square feet, typically occupied by logistics and storage operators, represented almost 20% of transactions.

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.”