New supply is still tight across residential, retail, and office markets in the UAE, pushing prices and sales up in 2Q 2025, according to data from JLL.

THE OFFICE MARKET-

Vacancy is nearly vanishing in Abu Dhabi’s office market, according to JLL’s 2Q Office Market Dynamics report (pdf). Citywide vacancy stood at 1.5%, with prime space effectively full at just 0.1% vacancy. In Dubai, overall vacancy dropped to 7.7%, with prime availability down to 0.3%.

Landlords are capitalizing: Prime office rents in Abu Dhabi jumped 31.5% y-o-y to AED 2.9k per sqm, while Grade A space rose 7.8% and Grade B space 10.9%. In Dubai, prime rents reached AED 359 per sq ft, up 17.3% y-o-y, with Grade C stock seeing the sharpest climb at 22.9%.

Supply additions remain modest: Abu Dhabi added 78k sqm in 2Q, bringing stock to 4.6 mn sqm, with another 66k sqm expected to be delivered by year-end. Dubai’s stock grew by 24k sqm to reach 9.3 mn sqm, with 33k sqm more due in 2H. The next major injection of Grade A supply — 264k sqm in Dubai International Financial Center — is not expected until 2026-27.

THE RETAIL MARKET-

Retail trends diverged between the two cities. In Dubai, contract registrations rose 9% y-o-y in 2Q, led by an 11.9% increase in renewals, according to JLL’s 2Q Retail Market Dynamics report (pdf). Prime super regional malls were the standout performers, with rents climbing 15.1% y-o-y to AED 826 per sq ft and vacancies down to 3.1%.

Abu Dhabi, meanwhile, saw a 12.1% y-o-y drop in registrations as occupiers stuck with renewals. Still, vacancies eased to 9%, while prime super regional rents edged up 3.4% to AED 5.5k per sqm.

Both cities kept supply flat in 2Q: Abu Dhabi’s inventory stood at 3.2 mn sqm, with 59k sqm — mostly from a regional mall — set to arrive later this year. Dubai held steady at 4.9 mn sqm, with 39k sqm of community and neighborhood space due in 2H. Larger mall projects are penciled in for 2026 as developers wait for firmer demand signals.

THE RESIDENTIAL MARKET-

Off-plan projects kept Dubai and Abu Dhabi’s housing markets buoyant during the quarter, Wam reports, citing JLL data. Dubai’s property sales hit AED 153.7 bn in 2Q, a 44.5% y-o-y jump, while average sales prices in Abu Dhabi rose 12.1%. Developers are currently building some 32.4k units across the two cities, scheduled for delivery in 2H 2025.

Secondary market activity also picked up: Abu Dhabi recorded a 9.1% increase in overall sales, with secondary transactions surging 32.6% y-o-y. Dubai posted a 22.8% rise in total sales, driven by a 17.1% increase in secondary transactions on top of steady off-plan demand.

Rental demand stayed resilient: Abu Dhabi saw a 9.4% y-o-y rise in residential lease registrations in 2Q, while Dubai logged an 11.5% increase. Tenants largely opted to renew existing contracts, the report said.

REMEMBER- Reports have been circulating of increased speculative buying in the UAE, with some already struggling to flip unbuilt homes. Resales of off-plan units fell to 20% of total resales in July, down from a third earlier this year. Fitch Ratings sees a price correction of up to 15% as early as 2H 2025, Knight Frank forecasts 8% growth this year versus double-digit gains in 2024, while Moody’s projects a dip or stabilization over the next 12-18 months.

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