• Retail rents up 6.4% as renewals dominate market  

Dubai, UAE – Sales values in Dubai’s retail real estate market surged 171% year-on-year to AED2.1 billion in Q1 2026, with off-plan transaction values up 225%, says leading real estate advisory group and property consultancy, Cavendish Maxwell.

Around 485 retail sales transactions were secured in Q1, up nearly 52% on the same period last year, with investors paying an average AED4.3 million for their property – a price rise of nearly 80% year-on-year. Off-plan retail sales generated AED1.3 billion – over 60% of total sales values – from January to March, as the number of transactions rose 75% to 254, according to Cavendish Maxwell’s latest analysis of Dubai’s retail and warehousing sectors.

Sales volumes reached 139 in January, rose to 196 in February and moderated to 150 in March, with the slowdown driven by reduced ready-market activity which was down 36% compared to March 2025. However, the off-plan segment continued to strengthen with a 195% hike in sales from March last year.

Cavendish Maxwell added that March figures should be interpreted with caution because of the lag in registration – typically 60 to 90 days – associated with off-plan sales, and that data from upcoming months will provide more clarity on demand trends.

Year-on-year, average retail rental rates were up 6.4% in Q1, with wide variations in increases from location to location. Business Bay saw the biggest hike (12.6%), followed by Downtown Dubai (12.5%), Jumeirah Village Circle (12.2%) and Palm Jumeirah (10.8%).

Around 19,800 contracts were recorded in Q1, with renewals, which accounted for more than 82%, up 1.3% on last year. Overall, contracts dropped 7% against Q1 last year, with new leases down by a third, suggesting occupiers chose to stay at their existing premises.

There were 4,600 rental contracts recorded in March, a reduction of 15% compared to March 2025, mainly due to lower demand for new leases, which fell almost 41% year-on-year. Cavendish Maxwell pointed out that leasing activity began to moderate before the onset of regional uncertainty, indicating that recent developments accelerated, not initiated, the trend.

Vidhi Shah, Director, 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

Dubai’s warehousing sector continues to benefit from the emirate’s position as a regional trade and distribution hub, alongside ongoing investment in logistics and infrastructure, with 5,800 leasing contracts recorded in Q1. As with the retail sector, renewals outnumbered new contracts by a huge margin, accounting for nearly 84% of all leases and increasing 15% year-on-year, according to the Cavendish Maxwell study.

Q1 saw a 7.3% annual decline in all leases, with new contracts dropping by half, reflecting a reduction in expansion by existing occupiers and a softening among new tenants. March 2026 saw an almost 29% rise in rent renewals, while new leases fell by two thirds against March 2025. Overall leasing activity was down 11% this March compared to the same month last year.

Average rental costs in Q1 were more than 16% up on the same period last year – and almost 21% up in Jebel Ali. Other strong performers were Dubai Industrial City (18%), Dubai Investments Park (nearly 17%) and Ras Al Khor (16.3%).

Warehouse leasing focused on small to mid-sized units in Q1, with premises from 2,000 to 5,000 sq ft accounting for more than half of all units, highlighting sustained demand for flexible formats favoured by SMEs and light industrial users. Nearly 20% of tenants rented warehouses larger than 10,000 sq ft – the type typically used by logistics and storage operators.

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.

Download the full Cavendish Maxwell Q1 2026 Dubai Retail and Warehouse report here.

Media contact:  Rebecca Rees at rebecca@rebecomms.com

About Cavendish Maxwell (www.cavendishmaxwell.com)

Cavendish Maxwell is a leading Middle East real estate advisory group and property consultant, with offices in Dubai, Abu Dhabi, Sharjah, Ajman, Ras Al Khaimah, Kuwait City, Muscat and Riyadh. The company is a member of the Royal Institution of Chartered Surveyors (RICS) and offers the full range of property-related services, including valuation, strategic advisory, research, project and building consultancy and investment and commercial agency expertise. With a team of experienced professionals and a commitment to delivering exceptional service, Cavendish Maxwell has established itself as a trusted advisor in the regional real estate market.