RICS Commercial Property Monitor, Q1 2023 – UAE results

  • UAE commercial property market displays strong and stable positive sentiment among all key metrics
  • Occupier demand strongest for office and retail space
  • Investment Sentiment Index records highest reading since Q3 2014 – investment enquiries growing across all commercial property segments (office, retail, industrial)

The Royal Institution of Chartered Surveyors (RICS) Commercial Property Monitor Q1 2023 results for the UAE, signal that the UAE’s commercial property market remained among the strongest globally in the first three months of 2023.

One of the highlights of this quarter is the Investment Sentiment Index (ISI), which reported a reading of +23 - its strongest measurement since Q3 2014. This landmark result, which is an aggregate of occupier and investor sentiment, is driven by an acceleration in investment demand growth (in net balance terms) across all sectors covered in the survey.  Meanwhile, both domestic and foreign investment enquiries remained in solidly positive territory, recording sentiments of +52% and +58% (net balances), respectively.

Overall occupier demand remained stable, but at a strong reading of +53% net balance, with office and retail sectors leading the way with sentiments of +60% (net balance) reported in both. While a little weaker, occupier demand in the industrial sector also remained firmly positive.  This strong demand picture is reflected both in the continuation of development starts, investor demand and rents. Rent expectations are strongly positive at both the 3 and 12 month horizons.  

As all key metrics in each commercial property sector continue to report positive readings, with the office sector the clear leader on most fronts, it seems that this will continue to be the case for the foreseeable future with confidence running high - around three quarters of all survey respondents reporting the market to be improving.

Anecdotal commentary reflects the positive picture, with retail occupancy and a solid footfall also cited alongside hospitality continuing to boom.  There was also a commentary about the increase in working from home, but that this is being balanced by investors from abroad.