Dubai Retail Property Sales Soar 177% to AED3.8bn as Off-Plan Demand Surges in H1 2026

Dubai retail real estate sales surged 177% to AED3.8bn in H1 2026, while transactions jumped 56%. Yet new leases fell sharply, revealing a market where buyers are bullish but tenants are cautious.Dubai retail real estate sales surged 177% to AED3.8 billion in H1 2026, putting the market firmly in the spotlight. Transactions also jumped 56%, while the average deal reached AED4.4 million. However, the Dubai retail property story is not simply about rapid growth. Off-plan properties drove much of the sales boom, whereas leasing activity became more cautious.

New retail rental contracts plunged 26%, even as renewals edged higher. Meanwhile, rents increased nearly 4.5% year-on-year. This split matters. Investors are still chasing Dubai retail opportunities, but businesses are becoming selective. As winter tourism approaches, prime malls could remain especially resilient.

Dubai’s retail property market delivered a striking performance in the first half of 2026, with retail real estate sales values rising 177% year-on-year to AED3.8 billion. At the same time, the market showed a clear split between strong investment demand and more cautious leasing activity.

According to new analysis from Cavendish Maxwell, 850 retail property sales transactions were recorded during H1 2026, representing a 56% increase from the same period in 2025. Average transaction value also climbed substantially, reaching AED4.4 million, up 77% year-on-year.

The figures point to continued investor confidence in Dubai’s retail real estate sector, although the softer leasing figures suggest businesses are becoming more selective.

Off-Plan Properties Lead Dubai’s Retail Sales

Off-plan activity was the biggest driver of Dubai’s retail property sales growth during H1 2026. Transactions involving properties yet to be completed more than doubled compared with the same period last year.

Off-plan premises represented nearly 60% of all retail property transactions and close to 70% of total sales value.

Cavendish Maxwell cautioned that the normal time gap between an off-plan transaction and its registration should be considered when interpreting the figures.

Jumeirah Village Circle recorded the largest share of off-plan transactions, accounting for more than 12% of the total. Majan followed with 10%, while Dubai South represented 9.8%. Motor City accounted for 8.6%, and Sobha Central contributed 7.6%.

Together, these five locations represented almost half of all off-plan retail sales.

Established Areas Dominate Ready Property Deals

The ready market showed a different pattern, with buyers concentrating on established retail locations.

International City led ready-market transactions with 22% of sales, followed by Business Bay at 13.4%. Azizi Riviera accounted for 10%, while Jumeirah Lakes Towers represented 7.4%. Jumeirah Village Circle completed the top five with 6.8%.

This contrast highlights two distinct investment trends: buyers are increasingly pursuing future retail opportunities through off-plan developments, while ready-property demand remains focused on established communities and commercial destinations.

Q2 Brings a More Cautious Tone

Despite the strong first-half performance, Dubai’s retail property market lost some momentum during the second quarter.

Sales transactions fell 25% in Q2 compared with Q1. However, quarterly sales between April and June remained more than 60% higher than in Q2 2025.

The slowdown therefore appears to represent moderation rather than a reversal of the broader market trend.

Cavendish Maxwell said higher operating costs, rising rents and regional uncertainty are influencing business decisions as companies become more selective about expansion.

Retail Rents Continue to Rise

The cost of renting retail space in Dubai increased by nearly 4.5% year-on-year during H1 2026, with every location monitored by Cavendish Maxwell recording an increase.

There was, however, an early indication that rental growth may be losing momentum. Average rents fell by just under 1% quarter-on-quarter.

Leasing activity also weakened. Around 33,000 retail rental contracts were signed during H1, with renewals increasing 1.5% year-on-year. Overall contracts nevertheless declined by just under 6%.

The main pressure came from new contracts, which dropped 26%.

Tenants Hold Existing Space as New Deals Fall

The leasing figures suggest that businesses are increasingly choosing to retain existing premises rather than take on new retail space.

That pattern became more visible in Q2, when total retail rental contracts were nearly 10% below the level recorded in Q2 2025.

Regional tensions, alongside higher rents and operating expenses, appear to have encouraged businesses to take a more conservative approach to new commitments.

Dubai’s Prime Malls Remain Strong

Despite the softer leasing environment, established retail destinations continue to benefit from strong demand.

Vidhi Shah MRICS, Director and Head of Commercial Valuation at Cavendish Maxwell, said occupancy at Dubai’s flagship malls and some community retail hubs is averaging around 98%.

The upcoming winter events season and peak travel period could provide additional support to these locations. Strong footfall and high tenant demand are expected to help established destinations outperform the wider, more selective leasing market.

The main cause behind Dubai’s retail real estate sales surge is stronger investor appetite, particularly for off-plan properties. The answer to why sales reached AED3.8 billion is therefore clear: more transactions, larger average deals and rapidly rising off-plan demand combined to lift values. The reason behind the contrasting leasing slowdown is different. Businesses face higher rents, increased operating costs and regional uncertainty, encouraging them to retain existing premises instead of signing new contracts. Consequently, Dubai’s retail market is showing two speeds. Investment remains aggressive, while occupiers are cautious. Established malls benefit from high occupancy, strong footfall and sustained tenant demand despite broader leasing restraint.

Dubai’s retail real estate market entered the second half of 2026 with powerful sales growth but a more measured leasing outlook. Sales values reached AED3.8 billion, up 177% year-on-year, while transactions climbed 56% and average deal values rose 77%. Off-plan properties accounted for most of this momentum, demonstrating continued confidence in Dubai’s future retail supply and development pipeline. Yet the 26% fall in new rental contracts shows that occupiers are assessing costs more carefully.

Rising rents, operating expenses and regional uncertainty are influencing expansion decisions. Still, the market is far from uniform. Prime malls and established community retail hubs are maintaining occupancy of around 98%, supported by strong footfall and tenant demand. With the winter events calendar and peak travel season ahead, these destinations could remain comparatively strong. Overall, Dubai’s retail sector is shifting towards a more selective phase, rather than losing its underlying investment appeal.