Dubai's commercial property market is entering a phase of "strategic maturation," where focus has shifted from volume-driven to value-driven acquisitions has pushed capital values to historic highs, says CRC (Commercial Real Estate Consultants) in a report.

CRC's Q1 2026 report highlights that while total commercial units sold dipped by 3% to 3,619 transactions, the market remains fundamentally robust. Total sales value for the quarter reached AED37.9 billion ($10.32 billion), representing an impressive 30% increase year-on-year compared to the same period in 2025.

The market is experiencing a slight cooling in overall transaction frequency following the record-breaking close of 2025, it said.

Behnam Bargh, Managing Director of CRC, notes that this performance reflects a broader trajectory of economic stability within the UAE. He emphasises that while there was a 16% softening in total sales value relative to the final quarter of 2025, the underlying market remains strong.

The office sector stood out as the primary growth engine during the first quarter. While transaction volumes rose by a steady 2% to 1,565 units, the total sales value skyrocketed by 73% quarter-on-quarter to reach AED8.2 billion. This surge in value is further evidenced by a major milestone in the secondary market, where prices broke the psychological barrier of AED 2,000 per sq ft for the first time, settling at an average of AED2,023. Geographically, Al Sufouh led the market in activity, followed closely by established business hubs like Business Bay and JLT.

In the retail segment, assets underwent a dramatic repricing that saw sales values surge by 162% year-on-year. This shift reflects a growing appetite for premium, high-traffic spaces and community-centric retail models. Jumeirah Village Circle (JVC) emerged as the top performer for retail transactions, followed by Motor City. Eliza Esenbek, Head of Retail and F&B at CRC, suggests that the current boom in neighborhood retail highlights a transition toward convenience and well-being, where destination shopping is being supplemented by curated, daily-life experiences.

The report also identifies aggressive demand in the off-plan and industrial sectors. Off-plan transaction volumes rose by 26%, but the value of these deals outperformed volume growth with a staggering 158% increase, now accounting for 78% of all commercial transactions. Simultaneously, warehouse demand remains fierce, with leads growing by 73% year-on-year and 72% quarter-on-quarter, indicating sustained institutional interest in logistics and industrial assets.

On the leasing front, the market is seeing a notable shift in tenant behavior centered on cash-flow management. While the 4-cheque payment plan remains the industry standard, accounting for 55% of transactions, 1-cheque payments saw a significant 13% decline. This suggests that corporate tenants are increasingly prioritising operational liquidity over the upfront discounts typically associated with single-payment terms.

Looking ahead, the CRC report maintains a positive outlook for the remainder of 2026. Driven by the D33 economic framework and substantial foreign direct investment, Dubai continues to establish itself as a global benchmark for commercial resilience. As non-oil sectors like logistics and the digital economy continue their expansion, the requirement for physical footprints remains a mandatory driver for the market’s long-term growth. - TradeArabia News Service

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