Dubai’s retail property investment market accelerated sharply during the first six months of 2026, even as the wider commercial sector began showing signs of a more selective approach among businesses. Investor interest in shops and other retail units pushed both transaction volumes and total sales value well above the levels recorded a year earlier.
Retail property transactions reached a combined value of AED 3.8 billion in the first half of the year, representing a 177% increase compared with the same period in 2025. A total of 850 sales were completed between January and June, up 56% year on year. The average value of an individual transaction also increased substantially, rising 77% to approximately AED 4.4 million.
The figures were reported by Khaleej Times, citing a new Dubai retail market study from property consultancy Cavendish Maxwell. The data indicate that investment demand remained particularly strong for properties still under development, while leasing activity presented a more mixed picture during the period.
Off-plan retail assets attract a larger share of capital
Off-plan properties emerged as the main engine of retail investment activity in Dubai. Units in projects under construction represented close to 60% of all retail transactions and accounted for almost 70% of the total value of sales during the first half of 2026.
Jumeirah Village Circle was the most active location for off-plan retail transactions, generating more than 12% of deals in this category. Majan, Dubai South, Motor City and Sobha Central were also among the leading destinations. Combined, these five areas accounted for almost half of Dubai’s off-plan retail property sales.
The geography of demand was different in the completed property market. International City led ready retail sales with a 22% share of transactions. Business Bay followed with 13.4%, while Azizi Riviera accounted for 10%. Jumeirah Lakes Towers and Jumeirah Village Circle represented another 7.4% and 6.8%, respectively.
The distribution of transactions highlights how investors are looking beyond Dubai’s established shopping districts. New residential communities and mixed-use developments are increasingly becoming important locations for retail investment as growing populations create demand for supermarkets, restaurants, cafés, services and other neighbourhood businesses.
Sales remain strong despite a slower second quarter
The headline annual growth figures were accompanied by evidence that momentum moderated as the year progressed. Retail property sales between April and June declined by 25% compared with the first quarter of 2026. Nevertheless, Q2 transaction activity remained more than 60% higher than during the corresponding period of 2025.
This contrast suggests that the market entered the second half of the year from a much higher base, but with investors becoming more selective about individual assets and locations. The combination of higher property values, operating expenses and broader regional uncertainty may increasingly influence investment decisions after the exceptionally active opening months of 2026.
Retail leasing showed a similar divergence between annual growth and short-term moderation. Average rents increased by around 4.5% year on year across the locations monitored by Cavendish Maxwell. On a quarterly basis, however, rental levels slipped by just under 1%.
More than 33,000 retail tenancy contracts were registered during the first six months of the year. Renewals increased by approximately 1.5% compared with H1 2025, but the overall number of contracts declined by almost 6%. New leasing agreements recorded a considerably steeper fall of 26%.
These figures point to a market in which existing businesses are often choosing to remain in established locations, while companies considering new stores or expansion are approaching additional commitments more cautiously.
Established retail destinations maintain high occupancy
Despite softer leasing activity, demand for space in Dubai’s leading shopping destinations remains resilient. Occupancy levels at major malls and established community retail centres are running at around 98%, according to Cavendish Maxwell.
High occupancy provides an important counterpoint to the decline in new lease agreements. Instead of signalling a broad retreat from physical retail, current conditions appear to show a widening gap between mature destinations with reliable customer traffic and locations where businesses have to assess expansion costs more carefully.
The coming winter period could provide another test for the sector. Dubai traditionally experiences stronger visitor flows and a busy calendar of events during the cooler months, supporting shopping, hospitality and leisure activity. Retail destinations that already benefit from strong footfall and limited available space may therefore remain comparatively well positioned even if the broader leasing market becomes more selective.
For property investors, the first-half results also underline the growing role of retail assets within Dubai’s commercial real estate landscape. The sharp increase in sales value, strong appetite for off-plan units and concentration of activity in expanding residential districts show that capital is following the city’s changing population and development patterns.
At the same time, weaker quarter-on-quarter sales and fewer new tenancy contracts indicate that the exceptional annual growth rates should not be interpreted as uniform expansion across every part of the market. The next phase is likely to depend increasingly on location quality, population growth, tenant demand and the ability of individual projects to generate sustainable footfall.