The UAE’s retail and office real estate sectors are increasingly favoring landlords, driven by current supply-demand imbalances and evolving market dynamics, according to JLL’s Q3 2025 report. These shifts create opportunities for agile investors and developers to unlock value and sustain long-term growth in both sectors.
In retail, consumer behavior changes and a heightened focus on value and convenience are shaping the 8.24 million square meters of retail space in Abu Dhabi and Dubai. Prime retail spaces, especially in super regional malls, have seen significant rental increases. Abu Dhabi witnessed a 3.4% rise in rental rates in prime malls over the year to Q3 2025, while Dubai experienced a notably higher increase of 13.5%. This landlord-favorable trend extends across top-tier retail properties with strong footfall and tenant turnover, enabling landlords to negotiate higher rents.
The office market is undergoing a distinct transformation in demand composition. The 13.4 million square meters of office inventory across Dubai and Abu Dhabi now sees more leasing inquiries from regional companies compared to large international corporations. Regional tenants tend to accept premium pricing more readily and show greater rental flexibility, supporting landlords’ position.
JLL’s Office Market Dynamics report highlights that rental growth rates might be peaking, particularly for Prime and Grade A office spaces. Prime rents surged 31.3% year-on-year in Abu Dhabi and 16.8% in Dubai by Q3 2025. However, some occupiers are beginning to find these rates unsustainable relative to operational budgets.
Additionally, Dubai’s residential developers are increasingly expanding into commercial real estate, mainly developing in secondary locations where land and development conditions are more favorable. These projects often use strata-title ownership, which does not usually align with the needs of regional companies and large corporates that prefer consolidated spaces in Central Business Districts.
Dana Williamson, JLL’s Head of Offices, Business Space & Retail for the MEA region, stated that the UAE’s prime commercial real estate sectors are expected to show sustained resilience. She emphasized that success depends on understanding changing occupier and consumer behavior and applying innovative strategies in a rapidly maturing market. Despite supply constraints, the market remains positive, presenting significant opportunities for growth and value creation aligned with these behavioral shifts.
Image Credit – jll.com
