JLL, the leading real estate advisory and investment firm, has released its new report, reviewing the performance and outlook for the Middle East and Africa real estate market in 2025.
The new report highlights the factors expected to support the performance of the UAE real estate market in 2025, including limited supply and the implementation of a number of infrastructure development projects and alternative assets, including last-mile logistics, transportation, and data centers.
JLL, the leading real estate advisory and investment firm, has released its new report, reviewing the performance and outlook for the Middle East and Africa real estate market in 2025.
The new report highlights the factors expected to support the performance of the UAE real estate market in 2025, including limited supply and the implementation of a number of infrastructure development projects and alternative assets, including last-mile logistics, transportation, and data centers.
As the impact of major headwinds to the global macroeconomic outlook begins to subside in 2024, the UAE is the only Gulf country to record growth in oil-related GDP, despite continued oil production cuts. Non-oil GDP also recorded strong growth of 4.7% in 2024, and is expected to accelerate to 4.8% in 2025.
“With stable inflation and a strong labor market, the real estate market is witnessing strong demand across key sectors in both Dubai and Abu Dhabi,” said Taimur Khan, Head of Research for the Middle East and Africa at JLL. “The UAE’s GDP growth was the strongest compared to other GCC countries, demonstrating the government’s ongoing strategic efforts to attract investment. In 2025, enabling the conversion of eligible non-freehold properties into residential properties will boost demand across submarkets, while new infrastructure projects and alternative assets are expected to drive real estate development in the UAE.”
Construction Project Awards
Despite a slowdown in the Middle East and Africa construction market in 2024, the UAE recorded the highest construction project awards during the year, accounting for 47% of the region’s total projects, valued at $34 billion.
Across sectors, the UAE outperformed the residential and mixed-use sectors, with projects valued at $28.3 billion and $4.6 billion, respectively, accounting for 20% of the region’s active construction projects.
Gary Tracey, Head of Projects and Development Services, JLL UAE, said: “Despite rising construction costs, the UAE’s real estate market is expected to continue its upward trajectory in 2025, as evidenced by strong demand and robust performance in the residential and mixed-use sectors.” The UAE’s bid price inflation rate for 2024 was 3% per annum, closely mirroring the market’s trajectory in 2023. Looking ahead to 2025, the company expects bid price inflation to average 2.5%, with a potential variance of 2%. The outlook for 2025 indicates improved market conditions, driven by expected lower interest rates, stabilizing commodity prices, and a return to normal supply chain conditions.
Dubai Real Estate
Dubai’s residential sector witnessed a remarkable recovery at the end of 2024, with sales transactions increasing by 32% compared to last year, reaching AED 367 billion. Investor interest remained strong in off-plan real estate, which accounted for the majority of transactions, valued at approximately AED 223 billion, or 60.7% of the total. Thanks to strong demand, developers launched approximately 157,000 residential units in 2024, the highest number ever launched in a single year, according to data from real estate data analytics company Reidin. Meanwhile, the rental market recorded annual rental price growth of 15.7%, albeit at a slower pace, indicating a potential stabilization in rental prices in the short to medium term. Abu Dhabi Real Estate
Abu Dhabi’s office space market continued to register strong demand levels in 2024 – mostly from government entities – with 47,615 office space leases registered, a 30.8% increase compared to last year. With demand expected to remain steady and new supply limited to 172,940 square meters, JLL expects rental rates to continue rising through 2025, particularly for the market’s premium and Grade A office space in prime and central locations.
Dubai: The Preferred Destination
Dubai remains a strong favorite with landlords, with approximately 122,000 square meters of new office space expected to enter the market in 2025, mostly Grade A space, distributed across areas such as the Dubai International Financial Centre, Dubai Internet City, Dubai Silicon Oasis, and Sheikh Zayed Road. As Abu Dhabi continues to consolidate its position as a major cultural and entertainment destination, the significant increase in visitor numbers has contributed to the improvement in hotel KPIs for 2024.
According to the Department of Culture and Tourism, welcoming 4.8 million visitors by October 2024 has led to a 6.5 percentage point increase in the capital’s room occupancy rate, reaching 79.0%. Average daily room rates have also increased by 14.1%, reaching $166, with revenue per available room growing by 24.3%. On the other hand, Dubai’s hotel room supply reached approximately 155,800 rooms by the end of 2024, with an additional 7,200 rooms scheduled to be delivered in 2025.
Dubai Retail
Dubai’s retail sector also witnessed resilience in demand in prime locations during the fourth quarter of 2024, resulting in average rental rates for large regional shopping malls increasing by 13.6%, averaging AED 2,235 ($609) per square meter. Rentals for regional shopping malls increased by 3.8%, reaching AED 1,224 ($334) per square meter.
Total retail supply in the market remained stable at 4.8 million square meters of gross leasable area, and the market is expected to see the delivery of an additional 100,000 square meters of retail space in 2025.