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UAE Real Estate Leads Global Performance in H1 2025 : Market Review.

  • Tavian Properties
  • Jul 22
  • 3 min read

The UAE real estate market has once again proven its global leadership, delivering robust returns across all core sectors despite tighter global market conditions. At Tavian Properties, we’ve been closely following these shifts - here’s a curated outlook on where the market stands and what investors and residents should expect in the coming months.


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Residential Market: Villas Hold Strong, Mid-Market Apartments Ease

Dubai’s residential market shows clear signs of maturity and segmentation. While villa communities continue to attract stable demand, the mid-market apartment segment has softened, largely due to the influx of new supply — nearly 43,000 units are expected in 2025, the highest since 2019.

  • Dubai: Residential sales prices averaged AED 1,822 per sq ft in Q2 2025, up 14% year-on-year. However, rental growth has moderated to 7%.

  • Abu Dhabi: Residential prices surged by 18%, with Saadiyat Island seeing a massive 30% growth, hitting AED 4,172 per sq ft. Rentals climbed 27%, supported by strong apartment demand.

At Tavian, we’re seeing consistent enquiries for high-end villa communities, particularly those offering exclusivity, privacy, and a connection to nature — exactly the segments defying market softening.


Office Market: Dubai and Abu Dhabi Close to Capacity

The UAE’s office sector is booming:

  • Dubai: Office occupancy has reached 92% overall, and 95% for Grade A assets, with rents increasing by 22% year-on-year to AED 190 per sq ft. DIFC remains the premium hotspot.

  • Abu Dhabi: Grade A occupancy sits at 97%, with rents up 11% to AED 160 per sq ft.

Limited new supply and strong pre-leasing demand continue to define this sector. Institutional investors are prioritising office spaces with ESG credentials, prime locations, and tenant covenant strength.


Retail: Focus on Localisation and Experience

Retail occupancy in the UAE has exceeded 95%, with rents in Dubai’s super-regional malls like The Dubai Mall and Mall of the Emirates rising by 12-15%.

Landlords are shifting their approach:

  • Prioritising homegrown F&B brands.

  • Tailoring retail experiences to Emirati vs. expat communities.

  • Embracing community retail hubs aligned with Urban Master Plan 2040.


Industrial Real Estate: Supply Crunch and ESG Premiums

Grade A warehouses remain scarce, especially with growing demand from e-commerce, manufacturing, and chemical industries. Average industrial rents rose by 11% year-on-year to AED 160 per sq ft.

The UAE’s industrial appeal is further enhanced by:

  • Strong logistics infrastructure.

  • Multimodal access.

  • Investment in climate-adaptive, ESG-compliant spaces, which command premium pricing.


Data Centres & Emerging Sectors

Abu Dhabi and Dubai now lead globally among emerging data centre markets, with 750 MW of capacity under development. The sector is projected to reach $3.3 billion by 2030, driven by:

  • Land availability.

  • Competitive power costs.

  • Sovereign-backed infrastructure.


Hospitality: Record-Breaking Growth

Dubai hosted 8.68 million visitors in the first five months of 2025, up 7% YoY, with a citywide occupancy of 83%. Abu Dhabi followed closely with 87% occupancy.

Both emirates are witnessing:

  • Longer guest stays.

  • Evolving global travel patterns.

  • Strong support from new cultural and cruise infrastructure.


What Lies Ahead: H2 2025 and Beyond

The second half of 2025 will challenge the market with:

  • Delivery of 43,000 new residential units.

  • 6.4 million sq ft of office space pipeline.

  • Continued expansion in data centres and industrial spaces.

With the UAE’s diversified economy, monumental projects like Etihad Rail and Disneyland on Yas Island, and a strategic focus on ESG and infrastructure, property values are well-positioned for long-term growth.

 
 
 

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