Dubai office sales and rents are still unstable well into 2Q, Cavendish Maxwell says

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Adia cashes in on Innio USD 2.4 bn IPO + IRH passes up Zambia export duty waiver for unprocessed copper

Good morning, lovely people, and happy FRIDAY. We lead this morning’s issue with a look at Dubai’s office market, which has seen a slowdown since March, despite activity somewhat moderating in April, as Cavendish Maxwell tells us. Investors remain cautious due to the uncertain operating environment, a spokesperson tells us. We dive into the office market’s 1Q data and what the next months could bring for the sector in the news well, below.

Plus: Gems Education is striking an optimistic note, saying demand is holding up this year, and pledging a AED 2 bn investment over the next three years to add 20k student seats.

PSAs

No Ebola cases have been detected in the UAE, health authorities confirmed in a statement after a traveler who spent a few days in the Emirates tested positive for the virus upon arriving in Uganda, state news agency Wam reports. The individual did not visit any healthcare facility while in the UAE, and health authorities said they have already activated public health measures, including risk assessments and contact tracing.

Midday work ban returns on 15 June: The UAE will once again halt outdoor work during the hottest part of the day starting Monday, 15 June, through Tuesday, 15 September, Gulf News reports, citing a Human Resources Ministry statement. The move bans companies from carrying out construction work under direct sunlight or in open areas between 12:30 pm and 3:00 pm. Employers will also have to provide shaded rest areas, hydration supplies, and cooling equipment for their workers. Violations carry fines of AED 5k per worker, capped at AED 50k for multiple violations.

Some activities are exempt, including emergency repairs to essential services, time-sensitive projects, and projects with special permits due to their impact on public services and traffic flow.

WEATHER- Temperatures are still high, reaching 41°C in Abu Dhabi today, before cooling to an overnight low of 31°C. Over in Dubai, look for a high of 39°C and a low of 29°C.

It’s a good week to be a Gulf sovereign wealth fund

Just as Saudi investors are poised for a windfall from SpaceX’s historic IPO, sovereign wealth fund Abu Dhabi Investment Authority (Adia) is also cashing in on the IPO of a German gas engine maker linked to the AI boom. Innio’s US IPO raised USD 2.4 bn after pricing 90 mn shares at USD 27 a pop, according to a statement. It rose 23% on its Nasdaq trading debut.

The all-secondary sale means that Adia and Innio’s other backer, Advent, are receiving all of the proceeds, giving the sovereign wealth fund a clean liquidity moment off surging demand for the power behind AI-era data centers. A vehicle owned by Adia and Advent will own 90% of Innio following the IPO, according to a regulatory filing.

Innio? Innio — now valued at USD 20.7 bn based on its outstanding shares — is a picks-and-shovels play on electrification and uptime for hyperscalers. The book built hot enough to upsize from 75 mn shares initially and still land at the top of the USD 24-27 pricing range.

ADVISORS- Goldman Sachs, JPMorgan, and Morgan Stanley were lead bookrunners for the IPO. Barclays and Citigroup were bookrunning managers, and Baird, BNP Paribas, Deutsche Bank Securities, RBC Capital Markets, and UBS Investment Bank were bookrunners. Crédit Agricole CIB, Erste Group, UniCredit, Academy Securities, and Drexel Hamilton were co-managers.

IRH passes on Zambia export duty waiver

IRH turns down Zambia’s export duty waiver for copper: Abu Dhabi natural resources investment platform International Resources Holding’s Zambian unit won’t be exporting copper concentrate despite a hefty waiver from the Zambian government, Bloomberg reports.

BACKGROUND- The government extended the suspension of a 10% export fee — introduced last summer, when IRH also passed up on the waiver — for close to 272k tonnes of copper concentrate, with IRH’s Mopani Copper Mines being allocated 100k tonnes of the total. The offer comes as the Zambian government looks to shift stockpiles of unprocessed copper as smelters undergo maintenance operations, Reuters reports.

Where will it go instead? Instead of exporting via Zambia’s state-owned Industrial Resources, Mopani will put output back into its processing operations to “[strengthen] domestic refining capacity,” as it looks to “smelt all available concentrate,” the company said.

The big story abroad

Private credit is back under the microscope after renewed second-quarter redemption pressure forced some of the sector's biggest managers — BlackStone and Partners Group — to curb withdrawals from flagship funds. The pressure is being driven by fears over software exposure, valuations, and limited transparency.

Elsewhere, SpaceX is telling banks it will not move from its USD 135-a-share IPO price as the firm’s roadshow, which kicked off yesterday, is already seeing what sources are describing as insatiable demand.

Closer to home, Hezbollah has rejected the ceasefire in Lebanon, while Israel said it would not withdraw troops from the country in another blow to the potential US-Iran agreement. Iran had said there would be no agreement without a ceasefire in Lebanon.

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Office sales and rents in Dubai take a hit as investors remain cautious

This past March was a damper on Dubai’s office market, putting the brakes on the exponential growth of past years in 1Q. Sales and rental activity slowed noticeably during the month as regional tensions, Ramadan, and a more cautious business environment prompted some occupiers and investors to hit pause on prospective transactions, according to data from Cavendish Maxwell.

Transaction volumes nosedived in March, dipping to 266 from January’s 679 and February’s 621 on account of both the regional war and the usual Ramadan slowdown. That’s a 13.4% y-o-y decline, compared with double- and even triple-digit growth in the first two months of the year.

Beware the lag: “Transactions recorded in March likely reflected a mix of [agreements] agreed both before and during the escalation of regional tensions,” Cavendish Maxwell’s head of research Ali Siddiqui tells EnterpriseAM. While there was likely a more cautious sentiment during the month due to the war, Siddiqui thinks the coming quarters are likely to provide a clearer indication of underlying market direction and the extent to which external developments influence occupier and investor behaviour.

Already, April has seen volumes rebound, “suggesting that activity did not come to a standstill,” he says, though May saw them moderate. “Investors and occupiers remain cautious amid a more uncertain operating environment,” he adds.

This is not surprising: As we’ve previously reported, Knight Frank's Adam Wynne said leasing enquiries slowed noticeably after February, and while some occupiers paused decision-making for several weeks in March, many have since returned to the market with long-term expansion plans intact.

Behind the numbers

Ready offices saw the bulk of the decline, falling 63%, while off-plan transactions were up 127.5%, but Cavendish Maxwell flagged a longer registration lag in the segment skewing interpretation.

January and February accounted for 83% of quarterly transaction volumes and more than 81% of total value, with ongoing business setup and international corporate expansion driving activity. While overall transactions were up 74.6% y-o-y and the total value of sales jumped 203.5% to reach AED 8.2 bn, the bulk of this came from the pre-war market.

Office sales prices rose 22.9% y-o-y to AED 2k per sq ft in 1Q, while rents increased 20% to AED 191.9 per sq ft. This growth was driven by tight vacancy levels in Grade A buildings and sustained demand for premium office space, with DIFC rents rising 28.2% y-o-y and Downtown Dubai prices up 27.0%.

Old is… not gold: “Submarkets with a high concentration of Grade A stock and established occupier bases are better positioned to weather near-term uncertainty,” Siddiqui says. “Vacancy in these locations remains tight and occupier demand continues to hold, while older and more peripheral locations — which were already recording modest rental growth prior to March — face the greatest competitive pressure in an environment where occupiers are becoming increasingly selective,” he adds.

Off-plan transactions were the most popular among investors, jumping 490.7% y-o-y during the quarter and accounting for 60.7% of sales — marking the first time since 2010 that off-plan activity overtook ready transactions in a quarter.

Looking ahead

It all depends on where things go from here when it comes to the war. “A further escalation could weigh on business confidence at a time when decision-making timelines are already becoming more prolonged,” Siddiqui says. “The ready transaction segment, which has softened in recent months, would likely be among the first to reflect any renewed deterioration in sentiment,” he adds.

Despite the softer sentiment, the DIFC continued to attract international firms during and after the quarter, with companies like ICICI Prudential Asset Management and Finreon joining after the war.

Cavendish Maxwell expects the market to remain supported by Dubai’s regulatory environment and tax competitiveness. The DIFC is already weighing regulatory changes that could help attract new types of firms, including potentially opening up its prescribed company regime to a wider pool of users by scrapping eligibility restrictions. This comes at a time when capital flight amid ongoing geopolitical uncertainties remains a major risk for the region. Siddiqui also points to Dubai’s AED 2.5 bn in fiscal support as a sign the government is willing to provide backing.

On the supply front: Supply is tight for now, though some relief may be on the horizon. Around 73.3k sqm of office space was delivered during the quarter, with another 240k sqm expected to come online this year to bring total office stock to 9.7 mn sqm by year-end. So far, however, only 23.6% of the supply has come online, with deliveries historically lagging in the office sector.

This could help growth become more measured, with Grade A assets in established districts expected to continue outperforming, while older secondary stock could face increasing competitive pressure.

Even more expansion for Gems?

Dubai-based school operator Gems Education plans to invest AED 2 bn over the next three years to add 20k new student seats across Dubai and Abu Dhabi, Group CEO Dino Varkey told Dubai Media Office (watch, runtime: 4:36). That’s double what the company said it planned to invest last year — AED 1.1 bn — and Varkey says the bulk of the investment — 75% — will focus on the affordable segment.

The school operator recently invested USD 100 mn in building Dubai’s most expensive school, Gems School of Research and Innovation, which opened its doors this school year.

Varkey sends an optimistic message on demand: “We continue to see growing demand from families across the world,” he said, mentioning that this year has been one of continued momentum for the firm. Those statements follow reports of residents leaving the UAE earlier in the conflict, although many seem to have returned since then.

Borouge names new CFO and COO + Tabreed taps chief asset management officer

Borouge reshuffles the C-suite: Borouge is appointing Siegfried Wengler (LinkedIn) as CFO effective 1 July, according to a press release (pdf). He brings 22 years of experience and is no stranger to the fhaving spent the past eight years in a senior finance role, most recently as vice president of group finance. Before that, he held senior positions at Borealis, Pfizer, and Deloitte.

AND- Salem Al Busaeedi (LinkedIn) will take on the COO role with immediate effect. Al Busaeedi previously served as senior vice president of operations and has spent 25 years with Borouge.

BACKGROUND- The move follows the formation of Borouge Group International — a USD 60 bn platform combining Borouge, Borealis, and Nova Chemicals — earlier in April, following the completion of their merger.

District cooling giant Tabreed promoted Atef AlBreiki (LinkedIn) to chief asset management officer, bringing the former executive vice president of operations and maintenance into its executive management team, according to a press release (pdf). AlBreiki has spent the past eight years at Tabreed, and in his new role he will head the company’s asset management function, focusing on portfolio performance, capital allocation, and long-term value creation.

FAB invests in water security, Arabic AI startup acquires another + Mischon de Reya opens up in DWTC

FAB is putting capital behind water security

FAB invests in water security: First Abu Dhabi Bank (FAB) is set to invest in a fund targeting boosting emerging market access to safe water under a partnership with Water.org and its impact investment manager WaterEquity, state news agency Wam reports. The fund channels capital through local financial institutions, helping low-income households and businesses finance water and sanitation solutions.

CNTXT AI acquires Actualize

Homegrown AI startup CNTXT AI acquired Dubai-based Arabic voice AI specialist Actualize, folding its dialect-aware voice agent technology into its stack, according to a press release. The acquisition folds Actualize’s technology and team into CNTXT AI, giving the company stronger capabilities in Arabic voice automation and conversational AI. The combined offering will include AI agents capable of carrying out tasks such as bookings, updates, and transactions across voice, chat, and back-office systems.

More about the startups: CNTXT AI has built its business around sovereign AI infrastructure, Arabic-language models, training data, and deployment tools for regulated sectors. Meanwhile, Actualize, founded in 2023, specializes in Arabic voice automation and conversational AI, with speech models that were developed specifically for GCC dialects.

Mishcon de Reya opens up in DWTC

International law firm Mishcon de Reya opened an office in the Dubai World Trade Center (DWTC) Freezone, the company said in a statement. Increased capital flows in the GCC, demand for multi-jurisdiction advice, and the significant footprint of international firms in the DWTC Freezone prompted the expansion, the company stated.

Middle East misses out on global HNWI wealth growth in 2025

Every region in the world saw an uptick in the wealth of high-net-worth individuals (HNWI) last year — except ours. The Middle East stood out as the only region not to catch the upside of growth in both HNWI wealth and population.

HNWI wealth was up 8.7% last year globally, reaching USD 98.3 tn, with 2 mn more people becoming m’naires, according to Capgemini’s latest World Wealth Report. AI-linked investment and strong corporate earnings drove the results, and the stock market portion of HNWIs’ portfolios rose to 25%.

Not in our neck of the woods: In the Middle East, wealth was down 1.5% last year, while the overall HNWI population dropped 1.4%, with the report citing pressure on fiscal coffers from lower oil prices, weak labor markets, and regional instability as the primary drivers of the contraction.

The regional decline occurred despite the global population of ultra-high-net-worth individuals (UHNWI) growing 9.7% y-o-y to 250k, thanks to exposure to lucrative private and public assets. UHNWIs now hold 34.8% of overall HNWI wealth globally.

The US came out on top for HNWI count, recording 736k new m’naires to bring its total to 8.7 mn, with tech being a key driver of wealth creation. Some 40% of returns from the S&P 500 came from the top seven tech firms. Europe, Latin America, and Africa also saw HNWI growth. The Asia Pacific region led in terms of wealth growth, which rose 10.5% on the back of demand for semiconductors.

A bleak outlook? It seems more HNWIs are staying put this year. Last year, 56% of HNWIs said they had or were planning to change their primary tax residence, but this year, only 25% plan to do so, the Financial Times reports, citing a Capgemini survey.

The sad part: The Middle East was actually on track for a significant influx this year — 13% of respondents said they were looking to relocate to the region, the highest share of any other region. However, Gareth Wilson, global banking industry leader at Capgemini, said this sentiment existed before the Iran war, expecting next year’s numbers to tell a different story.

The UAE — and the wider GCC — was well positioned to catch a larger intake of HNWIs who were relocating from countries like the UK in search of more favorable tax policies and investment environments. However, the regional war has prompted many HNWIs in the UAE to either leave or scout for other locations for long-term residency, with inquiries for Henley & Partners’ UAE residence program down 13% in 1Q.

MARKETS THIS MORNING-

Asian tech shares are dragging markets down, as they track losses among US chip stocks. South Korea took the brunt of it, with stocks like Samsung and Seoul Semiconductor dragging the index down more than 5%. Japanese and Taiwanese tech stocks also fell, though Taiwan Semiconductor Manufacturing Co. bucked the trend, rising 0.4%.

ADX	9,585	+0.0% (YTD: -4.1%)
DFM	5,718	+0.6% (YTD: -5.4%)
Nasdaq Dubai UAE20	4,421	-0.0% (YTD: -9.6%)
USD : AED CBUAE	Buy 3.67	Sell 3.67
EIBOR	3.4% o/n	3.1% 1 yr
TASI	10,990	-0.1% (YTD: +4.8%)
EGX30	52,653	+0.2% (YTD: +25.8%)
S&P 500	7,584	+0.4% (YTD: +10.8%)
FTSE 100	10,360	+0.3% (YTD: +4.3%)
Euro Stoxx 50	6,103	+0.8% (YTD: +5.4%)
Brent crude	USD 94.88	-0.2%
Natural gas (Nymex)	USD 3.35	+0.3%
Gold	USD 4,490.7	-0.3%
BTC	USD 63,681	-2.5% (YTD: -28.2%)
Chimera JP Morgan UAE Bond UCITS ETF	AED 3.68	0.0% (YTD: +0.3%)
S&P MENA Bond & Sukuk	151.85	-0.2% (YTD: -0.0%)
VIX (Volatility Index)	15.4	-4.1% (YTD: +3%)

THE CLOSING BELL-

The ADX remained flat yesterday on turnover of AED 998.6 mn. The index is down 4.1% YTD.

In the green: Al Buhaira National Ins. Company (+13.7%), Phoenix Group (+5.1%), and Agility Global (+3.8%).

In the red: Fujairah Building Industries (-4.2%), Mair Group (-2.9%), and Abu Dhabi National Hotels Co. (-2.8%).

Over on the DFM, the index rose 0.6% on turnover of AED 837.5 mn. Meanwhile, Nasdaq Dubai remained flat.

CALENDAR

JUNE

1-12 June (Monday-Friday): Subscription period for Emirates NBD’s mandatory open offer for 26% of India’s RBL Bank.

15 June - 15 September (Monday-Thursday): Dubai Mallathon, Dubai.

17 June (Wednesday): Investopia Global Talks, Tashkent, Uzbekistan.

22-24 June (Monday-Wednesday): The International Glass Manufacturing Show, Dubai.

SEPTEMBER

1-3 September (Tuesday-Thursday: Middle East Energy, Dubai World Trade Center, Dubai.

7-9 September (Monday-Wednesday): AIM Congress, Dubai World Trade Center.

7-9 September (Monday-Wednesday): International Property Show, Dubai World Trade Center, Dubai.

12-13 September (Saturday-Sunday): Emirates International Congress on AI & Visionary Leadership in Transforming Healthcare, Adnec Center Abu Dhabi.

14-17 September (Monday-Thursday): Arabian Travel Market, Dubai World Trade Center, Dubai.

29-30 September (Tuesday-Wednesday): AFCM Annual Conference, Abu Dhabi.

OCTOBER

4-10 October (Sunday-Saturday): World Space Week, Abu Dhabi.

5-7 October (Monday-Wednesday): AI Everything Global, Adnec Center, Abu Dhabi.

12-14 October (Monday-Wednesday: Airport Show, Dubai World Trade Center, Dubai.

20-22 October (Tuesday-Thursday): Future Health Summit, Adnec Center Abu Dhabi.

27-28 October (Tuesday-Wednesday): Arab Competition Forum, Dubai.

30 October (Friday): Large businesses achieving annual revenues equal to or above AED 50 mn must appoint an accredited service provider for e-invoicing implementation.

Signposted to happen sometime in October 2026:

Abu Dhabi Space Week, Abu Dhabi.

NOVEMBER

2-6 November (Monday-Friday): Dubai Future Finance Week, Dubai.

4 November (Wednesday): Digital Transformation Summit, Sofitel, Abu Dhabi.

9-10 November (Monday-Tuesday): Annual government meetings, Abu Dhabi.

10-12 November (Tuesday-Thursday): Dubai International Electric Vehicle Exhibition & Conference, Dubai World Trade Center.

16-18 November (Monday-Wednesday): World Police Summit, Dubai World Trade Center, Dubai.

DECEMBER

2-4 December (Wednesday-Friday): UN Water Conference, UAE.

4-6 December (Friday-Sunday): Formula 1 Abu Dhabi Grand Prix, Abu Dhabi.

8-9 December (Tuesday-Wednesday): Capital Market Summit, Madinat Jumeirah, Dubai.

Signposted to happen sometime in 2027:

1 January: Deadline for large businesses to implement e-invoicing;
1Q 2027: Completion of the first phase of Hassyan seawater desalination project;
1-3 February (Monday-Wednesday): World Governments Summit;
31 March: Small businesses with annual revenues of less than AED 50 mn are obliged to contract with an accredited service provider for e-invoicing implementation;
31 March: Government entities are required to appoint an accredited service provider for e-invoicing implementation;
21-22 April (Wednesday-Thursday): Token2049, Dubai;
1 July: Deadline for small businesses to implement e-invoicing;
1 October: Deadline for governments to implement e-invoicing;
Abu Dhabi’s solar and battery energy facility, combining 5.2 GW of solar capacity and 19 GWh of battery storage, is set for commissioning.

Signposted to happen sometime in 2028:

Artificial Intelligence Summit.

Signposted to happen sometime in 2029:

Sibos 2029 organized by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), Dubai;
Annual Meetings of the World Bank Group and the International Monetary Fund, Abu Dhabi;
The commissioning of the seventh phase of Mohammed bin Rashid Al Maktoum Solar Park.

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