The current supply-demand imbalance in the UAE’s office and retail markets presents a clear pathway for agile investors and developers to unlock significant new value and drive resilient, long-term growth, reveals JLL's latest Q3 2025 report.

Fuelled by evolving consumer preferences, corporate priorities, and current market dynamics, the ongoing transformations create a competitive leasing environment in the two landlord-favoured sectors, it says.

A shift in consumer behaviour alongside a growing focus on value and convenience in retail formats is shaping the 8.24 million sq m retail inventory in Abu Dhabi and Dubai. Backed by strong demand for prime retail spaces, landlords are negotiating higher rental rates. In Abu Dhabi, prime super regional malls maintained premium over other categories with a 3.4% rental increase in the year to Q3 2025 while Dubai experienced a substantial 13.5% rise in the same period. This landlord-favoured environment is evident across prime retail properties and successful shopping centres that draw strong footfall and turnover for tenants, says the report.

Demand shifts in office market

Dubai and Abu Dhabi’s 13.4 million sq m office inventory is witnessing a sharp shift in demand composition, with leasing inquiries from regional companies increasing at a faster rate compared to large international corporates. This transition is favourable for landlords, as regional occupiers often demonstrate greater rental rate flexibility and willingness than international occupiers to accept premium pricing structures, the report notes.

JLL’s Office Market Dynamics report reveals that the rate of rental growth in the two emirates may be reaching its cyclical peak, particularly for Prime and Grade A spaces. Reflecting a flight-to-quality trend, Prime rents in Abu Dhabi surged 31.3% year-on-year, while Dubai experienced a 16.8% rise in the year to Q3 2025. Occupiers are increasingly viewing these prices as unsustainable within their operational budgets.

Another emerging trend sees Dubai's residential developers diversifying into the commercial sector, often in secondary locations where land availability and development opportunities are more favourable. These new projects predominantly use strata-title ownership structures, which generally do not meet the requirements of regional companies and large corporate tenants seeking consolidated spaces in Central Business Districts.

Dana Williamson, Head of Offices, Business Space & Retail – MEA, JLL, said: “As the UAE’s prime commercial real estate sectors evolve, we anticipate a period of sustained resilience. For investors and developers, achieving success hinges on a deep understanding of the evolving occupier and consumer behaviours, and the ability to implement innovative adaptation strategies in a fast-maturing market. While facing a constrained supply environment across both prime retail and office segments, market sentiment remains positive, offering stakeholders significant opportunities to capitalize on new potent growth avenues for value creation that directly respond to fundamental behavioural shifts.”  

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