Following a strong  Q4 2020, optimism started increasing in the market, with signs of recovery visible in the economy in general, but in the real estate market as well. The pandemic forced businesses to question how they work, where they do business, and whether to adopt a work from home or office model or a hybrid. 

Although employers offer more flexibility, it is clear that many businesses have and will continue working from the office. In addition, increasing number of new businesses registered in Dubai has helped increase the demand for commercial space. The number of transactions in commercial space has more than tripled in Q2 2021 compared to Q2 2020 and the total transferred sales price of ready units by over AED 2 billion in H1 2021, compared to H1 2020. 

We are also seeing that buyers are gaining confidence in the market and looking to start investing again. As such, we saw a 13% increase in the number of investors, which is expected to rise as the market resumes normal activity. In regards to location, we have seen an overwhelming increase in both Business Bay and JLT. It has been interesting to see that JLT has outpaced Business Bay, making it the most popular area for office sales this year. What’s more, average sales prices increased by 9% with average office sizes also increasing by 19%, showing that companies are becoming more willing to spend more on nicer, bigger office spaces for their business. 

In terms of retail, the highest number of transactions was seen in International City, with a year on year, the area that saw the most growth was Mohammed Bin Rashid City. With that being said, units in MBR have primarily been off-plan sales that are due for completion within the next few years.

When looking at the leasing sector, we saw an 82% increase in tenant leads, showing there is growing interest within the market. This was especially the case for retail which saw a very significant increase of 186%. Whilst there was a lot of uncertainty surrounding retail units last year due to the heavy restrictions and curfews imposed on the population, as these are being lifted, there is increasing demand for retail and subsequently growing confidence in the market.  The well anticipated Dubai Expo 2020 is likely to keep the media eye focused on Dubai and it is likely that the confidence in the market will remain. 

For more market insights into Dubai’s commercial real estate market, take a look at our latest report, which gives a detailed and in depth look at the state of the industry throughout H1 2021.