Press release
UAE Real Estate: Economic Growth Fuels Demand as Supply Remains Constrained
CBRE releases its UAE Real Estate Market Review for Q3 2025
October 27, 2025
CBRE Middle East, the global leader in commercial real estate services, released today its latest edition of the UAE Real Estate Market Review for the third quarter of 2025, highlighting a resilient performance across key sectors despite supply limitations across commercial markets.
The UAE continues to demonstrate strong economic performance, fueled by a robust non-oil sector, strong foreign direct investment (FDI), strategic diversification, and higher oil production. While the 2025 GDP growth forecast has been adjusted slightly to 4.9%, the economy remains robust. Oil production quotas have been increased supporting growth, whilst the non-oil sector is also thriving, with projections of 4.6% growth in 2025 and 4.3% in 2026, driven by sectors such as tourism and trade. Tourism is booming, with strong visitor numbers in Dubai and Abu Dhabi.
The UAE's Purchasing Managers' Index (PMI) rose to 54.2 in September, indicating sustained expansion, with the UAE increasingly recognized as one of the world’s safest and most economically resilient business hubs.
Dubai’s Office market remains undersupplied, with average occupancy rates reaching 94% and rents rising 19% year-on-year. Key freezone areas such as DIFC, d3, and DMCC continue to face high demand, prompting occupiers to consider earlier pre-leasing activity and for developers to accelerate construction timelines. In Abu Dhabi, ADGM’s growth has driven near-full occupancy on Al Maryah Island, with average rents up 8% year-on-year and prime space commanding significant premiums. The remaining available office space, particularly for businesses associated with ADGM, is largely concentrated on Reem Island. This limited supply, coupled with strong demand, has resulted in a significant increase in occupancy rates on Reem Island over the past year.
Dubai's Residential market defied seasonal expectations, recording 56,723 transactions in Q3 worth AED 139.8 billion — a 16% year-on-year increase. Off-plan sales dominated, comprising 75% of activity. Prices rose 12.9% annually, with standout growth in areas like Dubai Silicon Oasis and DIFC. In Abu Dhabi, Q3 saw a record 6,610 transactions (+79% y-o-y), with prices and rents surging over 25%, driven by strong demand and limited supply.
Looking at the Hospitality market, The UAE is on track to welcome 27.6 million international visitors this year, with Dubai and Abu Dhabi each achieving a YTD occupancy rate of 79%. RevPAR rose 12% year-on-year across the UAE, supported by rising ADRs and sustained demand from key source markets. Abu Dhabi’s hotel revenues surged 19% to AED 4.8 billion, while the RAK market saw a 9% increase in total hospitality revenues.
Retail sector dynamics remain solid, albeit prime assets have little availability to support take-up, with high-profile openings including Skims and Ulta at Mall of the Emirates, the result of some active asset management which saw previous tenants leave. Occupancy rates hit 97% in Dubai and 95% in Abu Dhabi, with rents rising 5.3% and 3.3% respectively. Rents are expected to continue to rise gradually, driven by sustained population and tourism growth.
The UAE's Industrial market is experiencing robust growth, fueled by constrained supply and significant investment. Average industrial rents are up significantly, with 18% growth in Dubai and 12% in Abu Dhabi. New large-scale facilities are underway, with completion starting in 2026.
For more market insights, visit our Insights & Research platform.
The UAE continues to demonstrate strong economic performance, fueled by a robust non-oil sector, strong foreign direct investment (FDI), strategic diversification, and higher oil production. While the 2025 GDP growth forecast has been adjusted slightly to 4.9%, the economy remains robust. Oil production quotas have been increased supporting growth, whilst the non-oil sector is also thriving, with projections of 4.6% growth in 2025 and 4.3% in 2026, driven by sectors such as tourism and trade. Tourism is booming, with strong visitor numbers in Dubai and Abu Dhabi.
The UAE's Purchasing Managers' Index (PMI) rose to 54.2 in September, indicating sustained expansion, with the UAE increasingly recognized as one of the world’s safest and most economically resilient business hubs.
Dubai’s Office market remains undersupplied, with average occupancy rates reaching 94% and rents rising 19% year-on-year. Key freezone areas such as DIFC, d3, and DMCC continue to face high demand, prompting occupiers to consider earlier pre-leasing activity and for developers to accelerate construction timelines. In Abu Dhabi, ADGM’s growth has driven near-full occupancy on Al Maryah Island, with average rents up 8% year-on-year and prime space commanding significant premiums. The remaining available office space, particularly for businesses associated with ADGM, is largely concentrated on Reem Island. This limited supply, coupled with strong demand, has resulted in a significant increase in occupancy rates on Reem Island over the past year.
Dubai's Residential market defied seasonal expectations, recording 56,723 transactions in Q3 worth AED 139.8 billion — a 16% year-on-year increase. Off-plan sales dominated, comprising 75% of activity. Prices rose 12.9% annually, with standout growth in areas like Dubai Silicon Oasis and DIFC. In Abu Dhabi, Q3 saw a record 6,610 transactions (+79% y-o-y), with prices and rents surging over 25%, driven by strong demand and limited supply.
Looking at the Hospitality market, The UAE is on track to welcome 27.6 million international visitors this year, with Dubai and Abu Dhabi each achieving a YTD occupancy rate of 79%. RevPAR rose 12% year-on-year across the UAE, supported by rising ADRs and sustained demand from key source markets. Abu Dhabi’s hotel revenues surged 19% to AED 4.8 billion, while the RAK market saw a 9% increase in total hospitality revenues.
Retail sector dynamics remain solid, albeit prime assets have little availability to support take-up, with high-profile openings including Skims and Ulta at Mall of the Emirates, the result of some active asset management which saw previous tenants leave. Occupancy rates hit 97% in Dubai and 95% in Abu Dhabi, with rents rising 5.3% and 3.3% respectively. Rents are expected to continue to rise gradually, driven by sustained population and tourism growth.
The UAE's Industrial market is experiencing robust growth, fueled by constrained supply and significant investment. Average industrial rents are up significantly, with 18% growth in Dubai and 12% in Abu Dhabi. New large-scale facilities are underway, with completion starting in 2026.
For more market insights, visit our Insights & Research platform.
The residential development pipeline continues to grow, with rising deliveries now starting to soften rental sector dynamics across some locations, a trend which is likely to continue to evolve in the coming quarters. However, commercial markets remain heavily supply constrained, and without significant handovers until 2027 at earliest, the current landlord friendly market looks set to continue.
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Explore CBRE's UAE Real Estate Market Review for Q3 2025, offering a detailed analysis of recent trends and future market projections.