Dubai’s retail real estate market reached a new quarterly milestone in Q3 2025, with sales exceeding Dhs1.1 billion across 400 transactions, according to data from property consultancy Cavendish Maxwell. This marks the first time retail asset sales in a single quarter have surpassed the Dhs1 billion threshold.
Retail sales growth
Retail transactions rose nearly 80% compared to the previous quarter and 30% year-on-year. Off-plan sales saw the strongest increase, more than doubling with a 133% rise compared to Q2, and up 65% compared to the same period in 2024.
Despite rising rents, rental renewal contracts grew 6% year-on-year, while new leases fell almost a third compared to the previous quarter, suggesting tenants are choosing to stay in established locations.
Rising rents and occupancy
The report shows city-wide retail rents increased by an average of 7.7%, with some areas such as Jumeirah Lakes Towers, Business Bay and Dubai Marina seeing rises of up to 15%. Iconic destinations including Dubai Mall maintained 98% occupancy, reflecting strong footfall and consistent tenant demand at major retail hubs.
Warehousing market
Dubai’s warehousing sector also recorded growth. Rental renewals rose 62% year-on-year, while average warehouse rents increased by 17%. Jebel Ali led the growth with a 21% rise, followed by Ras Al Khor, Dubai Investments Park, Dubai Industrial City and Umm Ramool. High demand and limited supply are driving tenants to retain existing premises despite higher costs.
Market outlook
Vidhi Shah, Director and Head of Commercial Valuation at Cavendish Maxwell, said: “Dubai’s retail and warehouse markets continue to perform strongly, supported by high demand, constrained supply and sustained investor confidence. Population growth, record tourism levels and rising occupancy continue to push up rents, which are likely to see more growth in the near to medium term.
“In the retail sector, we expect to see growth among smaller, community shopping centres that focus on daily needs and convenience, as well as ongoing investment in flagship malls, such as the Dhs5 billion expansion at Mall of the Emirates.
“Meanwhile, Dubai’s warehousing shows no sign of slowing down. As the city further reinforces its position as an ever-expanding regional logistics hub, tenants are prepared to absorb double-digit rent increases to secure premises in a market where alternatives are limited.”
tanvir@dubainewsweek.com
