Dubai’s commercial real estate dips in Q2 but maintains underlying strength
Commercial sales value in the UAE moderated 36% quarter-on-quarter to AED 24.25 billion, as the disruptive effects of the regional conflict that began in late February 2026 weighed on investor confidence and delayed decision-making on large-ticket transactions. That is according to research from CRC Property.
The UAE’s office segment recorded 1,005 units sold in the second quarter, down 35.8% quarter-on-quarter, while total sales value held comparatively steady at AED 7.5 billion, a more modest 8% decline.
However, on a year-on-year basis, office sales value has nearly tripled, up 190% from an estimated AED 2.6 billion in Q2 2025. Business Bay reaffirmed its position as Dubai’s leading office destination, recording 441 transactions and accounting for close to half of all office activity citywide, followed by Al Sufouh 1 (118 transactions) and Jumeirah Lakes Towers (110 transactions).
Units under 1,500 square feet accounted for 61% of transactions said CRC Property, underscoring sustained demand from small and mid-sized businesses, start-ups and single-owner operators.
In the retail segment, transaction volumes declined quarter-on-quarter and total sales value fell to AED 1.63 billion.
However, in this segment too the year-on-year picture remains exceptionally strong: against Q2 2025’s transactions and value, Q2 2026 still represents growth of approximately 58.6% in volume and 178.4% in value. Dubai South, Sobha Central and Jumeirah Village Circle led transacted retail locations for the quarter.
Industrial and warehousing emerged as the most resilient asset class in Q2, underpinned by sustained occupier demand, disciplined pricing and continued institutional conviction. Demand remained concentrated in the small-to-medium bracket, between 10,000 and 50,000 square feet, reflecting the footprint requirements of regional distributors and last-mile logistics operators. Rental rates held firm through the quarter, supported by tight availability.
A dip on the back of underlying strength
Despite the pullback in the second quarter, CRC Property’s report characterises the correction as an acute, event-driven shock rather than a structural loss of momentum, pointing to year-on-year growth numbers evidencing that Dubai’s underlying fundamentals remain firmly intact.
“The second quarter tested the resilience of Dubai’s commercial real estate market and it passed with encouraging signs of underlying strength,” said Behnam Bargh, Managing Director of CRC Property. “While transaction volumes corrected, the city has once again shown its ability to weather near-term disruption while staying anchored to the fundamentals that continue to attract capital from around the world.”
