CBRE – UAE Real Estate Market Review, 3Q 2023

The UAE's GDP is expected to grow by 2.8% in 2023, with the hydrocarbon sector contracting by 0.8% and the non-hydrocarbon sector recording a growth rate of 4.2%. Dubai's occupier market saw robust demand in the third quarter, with a 40.7% increase in rental contracts compared to the previous year. The lack of quality stock and high demand led to rental growth in Dubai's office segment, with average rents increasing by 10.7% to 30.0% in different grade categories. Abu Dhabi's occupier market also saw improved rental performance, with average rents increasing by 7.0% to 13.0% in different categories. In Abu Dhabi, apartment prices increased by 0.9% while villa prices slightly dropped by 0.1%, whereas in Dubai, residential prices rose by 19.6% with apartment and villa prices increasing by 19.7% and 18.9% respectively. Although there was a monthly slowdown in Dubai's residential market in September 2023, with a decrease in off-plan sales, the total volume of residential transactions reached the highest figure ever recorded. The average occupancy rate in the UAE increased by 4.8 percentage points compared to the previous year, with average RevPARs also increasing by 5.6%. The retail segment in Abu Dhabi and Dubai experienced significant lease rate growth, with average rents rising by 16.9% and 36.8% respectively in the third quarter of 2023. The industrial and logistics sector also saw higher leasing rates in both Abu Dhabi and Dubai, with rental rates growing by 7.5% and 17.7% respectively.