The UAE's 2025 real estate market saw tight supply driving strong rental growth in the office and industrial sectors. Residential sales/rent growth moderated due to record new supply and a significant pipeline for 2026, creating a more balanced market.
-- The UAE real estate market continues to demonstrate strong fundamentals across office, industrial, and residential sectors, supported by limited supply, high occupancy levels, and evolving occupier behaviour, according to insights shared by Prathyusha Gurrapu, Head of Research at Cushman & Wakefield, in a recent market update video.
According to Cushman & Wakefield research, the office markets in both Dubai and Abu Dhabi remain extremely tight, with occupancy levels at 92% in both cities. Limited new supply, particularly in well-located, single-owned Grade A office assets, is driving strong rental growth and reinforcing landlord-favoured market conditions. Demand for office for rent in Dubai has intensified as occupiers compete for a shrinking pool of high-quality space, pushing rental values higher across prime locations.
Cushman & Wakefield data shows that office rents have increased 19% year-on-year in Dubai and 29% year-on-year in Abu Dhabi, reflecting sustained interest from both occupiers and investors. At the same time, activity for office for sale in Dubai continues to gain momentum, particularly for single-owned Grade A assets, as buyers seek long-term exposure to supply-constrained, income-generating commercial real estate.
“Limited new office supply and very tight market conditions are continuing to drive both the Dubai and Abu Dhabi office markets,” said Prathyusha Gurrapu, Head of Research, Cushman & Wakefield.
“Well-located, single-owned Grade A assets remain the most sought after,” she added, according to Cushman & Wakefield’s latest analysis.
The industrial and logistics sector has emerged as the strongest-performing asset class in the UAE, supported by high occupancy and robust rental growth. Occupancy levels stand at approximately 95% in both Dubai and Abu Dhabi, while rents have risen 18% year-on-year in Dubai and 13% year-on-year in Abu Dhabi.
“Industrial assets continue to outperform the broader market, driven by strong occupier demand and limited availability,” Gurrapu noted.
“We are also seeing a growing shift towards build-to-suit requirements and early commitments, with occupiers securing space well ahead of completion and developers increasingly responding to this demand.”
In contrast, the wider residential market is entering a more balanced phase following several years of rapid growth. Sales prices have increased 13% year-on-year, while rental growth has moderated to 6%, indicating a healthier and more sustainable growth trajectory. Prime locations continue to outperform, with Palm Jumeirah and Downtown Dubai leading both sales and rental performance due to their central locations and limited supply.
“Prime districts such as Palm Jumeirah and Downtown Dubai continue to outperform the wider market, supported by strong demand and constrained supply,” she added.
On the supply front, 2025 marked a five-year high for new residential completions, with approximately 44,000 units delivered. Looking ahead, an estimated 69,000 units are expected to enter the market in 2026, which is likely to result in further moderation in both rental and sales price growth.
“With new supply reaching a five-year high and a significant pipeline expected in 2026, we anticipate continued moderation across both rents and sales prices,” Gurrapu said.
For a concise overview of the UAE real estate market across office, industrial, and residential sectors, watch Cushman & Wakefield’s full market update video featuring Prathyusha Gurrapu below.
About the company: Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2023, the firm reported revenue of $9.5 billion across its core services of property, facilities, and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity, and Inclusion (DEI), sustainability, and more. Cushman & Wakefield Core is an independently owned and operated affiliate of Cushman & Wakefield, with over 17 years’ experience operating in the UAE. For additional information, visit www.cushwake.ae.
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