You’re entering the last stretch of the year with three things working for you: funding costs just inched down, demand engines are at record levels, and construction costs look contained. The Central Bank trimmed the base rate to 4.15% and three-month EIBOR hovers near 4.0%. Meanwhile, Jebel Ali handled 7.77 million TEU in H1, and AD Ports processed 3.6 million TEU. DXB handled 46.0 million passengers in H1; Abu Dhabi achieved a record August for hotel occupancy. If you’re choosing where to commit capital or break ground, the question isn’t “is there demand?”—it’s “where do I get paid for taking it?”
This guide walks you through the logic behind our country scorecard before you see the chart. Think of you as the decision-maker and the data as the map. We’ll explain what the composite measures, why the top city×sector pairs ranked where they did, and how to turn that into leasing, development, and investment moves you can defend in IC.
Our composite score (0–5) blends six drivers that move NOI and exit value over a six-month horizon:
Why now? Headline CPI is benign (~2.4% y/y), shelter inflation remains elevated (Dubai housing/utilities ~7.3% y/y), and base rates are nudging lower. That mix rewards scarce, operationally tight assets and penalizes categories with bunching handovers or thin absorption.
As the scorecard below shows, five city×sector pairs clearly lead on risk-adjusted return.
What’s working: Trade is expanding, not stalling; warehouses are still repricing. Average rents sit around AED 46/ft²/yr (+~20% y/y), with urban logistics nodes like Al Quoz printing AED 80–85/ft²/yr and a sub-5% vacancy rate. Jebel Ali’s H1 throughput growth underpins 3PL expansion and inventory localization.
How to monetize: If you’re an owner, lean into indexation + capex-for-rent trade-offs (ESG retrofits, mezzanines) to unlock 150–250 bps of incremental yield on cost. If you’re developing, target 20–40k m² cross-dock boxes with yard depth; push pre-lets to 40%+ before slab pour to protect IRR against steel and MEP surprises. Land pricing in inner-city micro-markets is the choke point—underwrite to lease up within two quarters or walk away.
Watch: Two sequential months of TEUs <+2% y/y would put the brakes on the upper half of our rent band (+4% to +8% in six months).
What’s working: AD Ports recorded 3.6m TEU in H1 (+21% y/y). KEZAD and ICAD are capturing the flow with mid-40s to mid-50s/ft²/yr asking rents equivalent and improving pre-let depth. Supply is measured; vacancy remains tight.
How to monetize: Structure BTS with expansion rights and utility guarantees; price in truck-turn efficiency and dock count, not just ft². For stabilized income, you can still buy high-spec sheds at yields that compress 25–50 bps on refinancing if EIBOR drifts lower.
Watch: If transshipment mix rises at the expense of origin/destination cargo, absorption elongates—keep your underwriting honest on downtime.
What’s working: The travel engine is on. DXB’s H1 traffic hit 46m. Citywide YTD shows occupancy above 82% with ADR around AED 620 and RevPAR north of AED 500. In Q4–Q1, the events calendar and air capacity are expected to drive RevPAR growth of +5–10% year-over-year.
How to monetize: If you operate, rate discipline beats occupancy chasing in the high season; protect length of stay and premium room mix. If you’re a lender or JV partner, focus on upper-upscale/luxury near event nodes where F&B and MICE add margin. Underwrite to stabilized cap rates, holding or compressing up to 25 bps if rates drift down.
Watch: Airline schedule changes are the leading swing factor; model a −3 ppt occupancy shock to test DSCR.
What’s working: STR/CoStar’s preliminary August read showed a record 79.3% occupancy, with ADR ~AED 482. AUH passenger growth and destination marketing keep weekends strong while weekdays deepen with events and business travel.
How to monetize: Push ancillaries and dynamic pricing; Q4–Q1 is your IRR window. Consider asset-light expansions near the airport and Yas, where land and utility setups are more straightforward and more cost-effective.
Watch: Event cadence. If headline events slip, high-yield weekends are the first to go.
What’s working: Grade-A is effectively sold out: ~97% occupancy and prime rents near AED 2,900/m²/yr. New supply in H2 is largely pre-let (Masdar City, Yas clusters). Incentives are contained, and tenant upgrade paths are limited—pricing power is absolute.
How to monetize: For owners, early renewal programs protect cash flows and fund ESG capital expenditures. For developers, smaller 25–35k m² plates with efficient cores can win relocations from dated stock. Underwrite to +2–5% effective rent growth in six months and assume limited sublease leakage.
Watch: Shadow space. If sublease availability increases, trim growth by ~100–200 basis points.
Not a cliff, but cooling at the margin. Dubai’s shelter CPI remains elevated (7%+ y/y), but handovers tend to bunch in H2/H1. Expect rents to increase by 1.5–3.5% in the near term and prices to decrease by 2% to 1% as the ready-versus-off-plan mix rebalances. Abu Dhabi’s apartments are up ~18% year-over-year on a relatively thin ready base; our six-month forecast calls for rents to increase by 1–3% and prices to remain stable at 0–2%. If you’re building a mid-market business, test affordability stress at +50 bps above EIBOR.
Occupancy is tight (Emaar’s portfolio near 98%; Yas Mall ~98%) and operators are committing capex (MOE AED 5bn expansion). Space is scarce, and turnover rents are earning their keep. Treat prime base rents as realistic, with a 1–4% increase, but remember that this is still operator-led: tenant sales and footfall drive the ceiling.
Enrollment growth is steady, with a 2.35% fee cap guiding practical tuition; Abu Dhabi’s Arabic-minute mandate has timetable and staffing impacts. If you’re investing in schools, focus on fill risk and program mix—returns come from ramp speed, not headline fee growth.
Capacity is growing (AUH builds ~60 MW underway; Dubai operators expanding), but power allocation is the gate. If you haven’t locked the utility, treat your IRR as optionality, not base case.
If you’re acquiring:
If you’re developing:
If you’re financing:
If you’re operating:
The next six months in the UAE are about owning scarcity and buying time. Scarcity resides in last-mile sheds, Grade-A offices in Abu Dhabi, and prime hotels in Dubai. Time comes from base-rate relief and disciplined pipelines. As the scorecard below shows, the highest scores cluster where demand is measurable (TEUs, pax, visitors) and supply is rationed. Your edge lies in acting where those two lines intersect and in pre-committing users before the market catches up.
For a more detailed breakdown by micro-market, lease comps, or underwriting templates (yield-on-cost and IRR trees), please contact us. We’ll send the entire dataset, along with the signposts we track monthly, so you can adjust your positioning before the market does.
Rates eased, demand engines are running hot, and costs look contained. The Central Bank of the UAE (مصرف الإمارات المركزي, CBUAE) cut the base rate to 4.15% · % · 2025-09-18. Three-month EIBOR is around 4.00% · % · 2025-09-29 (CBUAE, ADCB).
Trade and travel are at records: Jebel Ali 7.77m · TEU · H1-2025 (DP World, Gulf Business), AD Ports 3.6m · TEU · H1-2025 (AD Ports, Container News), DXB 46.0m · passengers · H1-2025 (Dubai Airports, Reuters).
This report shows where pricing power is most durable over the next six months. Use the Gap-Scorecard to rank opportunities across city×sector, then drill into the sector cards and contrarian tests. Bilingual labels appear at first mention for key bodies (e.g., FCSC — الهيئة الاتحادية للتنافسية والإحصاء, SCAD — مركز الإحصاء – أبوظبي, DLD — دائرة الأراضي والأملاك – دبي, DMT — دائرة البلديات والنقل, DET — اقتصاد وسياحة دبي, DCT — دائرة الثقافة والسياحة – أبوظبي).
Composite score (0–5) = Demand (25%) + Supply 6–18m (25%) + Pricing Power (20%) + Affordability (15%) + Liquidity (10%) + Policy (5%).
| Top-5 (city — sector) | Score | Why now |
|---|---|---|
| Dubai — Industrial & Logistics | 4.10 | Landlord market; Jebel Ali throughput rising; urban-logistics scarcity (Al Quoz). |
| Abu Dhabi — Industrial & Logistics | 4.00 | AD Ports TEUs +21% y/y; KEZAD demand; limited near-term supply. |
| Dubai — Hospitality | 3.90 | Record DXB H1; peak-season uplift ahead; ADR/RevPAR momentum. |
| Abu Dhabi — Hospitality | 3.90 | Record Aug occupancy 79.3% (STR/CoStar); AUH pax tailwind. |
| Abu Dhabi — Office | 3.80 | Grade-A ~97% occupancy; prime AED 2,905/m²/yr; pipeline largely pre-let. |
| Metric | Latest (value · unit) | As-of | Primary | Corroboration | Confidence |
|---|---|---|---|---|---|
| CBUAE Base Rate (ODF) | 4.15 · % | 2025-09-18 | CBUAE | Reuters | High |
| 3M EIBOR | 4.0031 · % | 2025-09-29 | CBUAE | ADCB | High |
| UAE CPI (headline, y/y) | 2.43 · % | 2025-08 | FCSC (UAESTAT) | TradingEconomics | Medium |
| Dubai CPI (headline, y/y) | 2.43 · % | 2025-08 | DSC | ENBD | High |
| Dubai CPI — Housing & Utilities (rents proxy) | 7.36 · % | 2025-08 | DSC | ENBD | Medium |
| Gross Credit (m/m) | +1.4 · % | 2025-07 | CBUAE | WAM | High |
| USD/AED (peg) | 3.6725 · AED per USD | 2025-09-29 | CBUAE | Reuters | High |
| Jebel Ali Throughput (H1) | 7.77 · m TEU | 2025-06-30 | DP World | Gulf Business | High |
| AD Ports Containers (H1) | 3.6 · m TEU | 2025-06-30 | AD Ports | Container News | High |
| DXB Passengers (H1) | 46.0 · m pax | 2025-06-30 | Dubai Airports | Reuters | High |
| AUH Passengers (H1) | 15.8 · m pax | 2025-06-30 | AD Media Office | Reuters | High |
| Dubai Construction Cost Index | 107.81 (Q2), 108.31 (Q1) · 2019=100 | 2025-06-30 | DSC | Arcadis ICC | Medium |
Read-through: Lower funding costs, subdued headline CPI, and strong trade/travel set a stable background; shelter inflation stays elevated, so landlords retain near-term pricing power while construction cost escalation looks contained.
| Sector | Now | Inference (6m) | Drivers & Sensitivities | Confidence |
|---|---|---|---|---|
| Residential | CPI Housing 7.36 · % y/y · 2025-08 (DSC, ENBD); H1 sales AED 151bn · AED · 2025-H1 (DLD/GDMO, Khaleej Times) | Rents: +1.5% to +3.5%. Prices: −2% to +1%. | Rates (~4% 3M EIBOR), H2 handovers; ±10k extra deliveries trims rents ~0.7 ppt. | Medium |
| Office | Vacancy 7.7 · % · 2025-Q2; prime 0.3 · % · 2025-Q2 (JLL); avg rent 190 · AED/ft²/yr · 2025-Q2 (C&W) | Prime +3% to +6%; Grade-A +2% to +5%. | Ultra-tight prime; watch sublease shadow space. | High |
| Retail | Major malls occupancy ~98 · % · 2025-H1 (Emaar, CBRE); MOE expansion 5.0 · AED bn · 2025-04-16 (Reuters) | Prime base rents +2% to +4%. | DXB pax; limited near-term GLA; monitor tenant turnover rents. | High |
| Industrial & Logistics | Avg WH 46 · AED/ft²/yr · 2025-Q2 (JLL); Al Quoz Grade-A 85 · AED/ft²/yr · 2025-Q2 (Knight Frank); Jebel Ali 7.77 · m TEU · 2025-H1 (DP World) | Prime rents +4% to +8%; vacancy <5%. | TEUs; urban scarcity; limited 2025 completions. | High |
| Hospitality | Occ 82.9 · % · 2025-05 (YTD); ADR 620 · AED · 2025-05 (YTD) (CBRE/CoStar); visitors 11.17 · m · 2025-07 (DET) | RevPAR +5% to +10%. | Air capacity; events calendar; FX peg stability. | High |
| Education | 387,441 · students · AY 2024/25; 227 schools (KHDA); fee cap 2.35 · % · 2025-05-02 (KHDA (ECI), WSA) | Enrolment +2% to +3%; effective fees 0–2.35%. | Net in-migration; new seats; policy cap. | High |
| Alt-Assets — Data Centres | UAE live >350 · MW · 2025-06 (market DB; GlobeNewswire; context Knight Frank) | Live IT load +5–8% by Q1-2026 (Inference). | Utility allocations; operator roll-outs. | Medium |
| Sector | Now | Inference (6m) | Drivers & Sensitivities | Confidence |
|---|---|---|---|---|
| Residential | Apt prices ~+18 · % y/y · 2025-06 (CBRE; corroboration Knight Frank); H1 value 51.72 · AED bn · 2025-H1 (ADREC/ADMO) | Rents +1% to +3%; prices 0% to +2%. | Thin ready stock; rate relief; handover cadence. | Medium |
| Office | City occ ~90 · % · 2025-Q2; Grade-A ~97 · % · 2025-Q2 (C&W); prime 2,905 · AED/m²/yr · 2025-Q2 (JLL via Zawya) | Prime +2% to +5%; Grade-A +1% to +3%. | Pre-let pipeline; incentives; sublease drift. | High |
| Retail | Yas Mall occ 98 · % · 2025-H1 (Aldar); portfolio 91 · % · 2025-H1 (Aldar, Gulf Business) | Prime base rents +1% to +3%. | AUH pax; limited prime GLA. | High |
| Industrial & Logistics | Avg WH 470 · AED/m²/yr · 2025-Q2 (JLL); AD Ports 3.6 · m TEU · 2025-H1 (AD Ports) | Prime rents +3% to +6%; vacancy <6%. | TEUs; KEZAD pre-lets; near-city scarcity. | High |
| Hospitality | Occ 79.3 · % · 2025-08 (prelim.) (STR/CoStar); ADR 482.32 · AED · 2025-08 | RevPAR +5% to +9%. | Air capacity; events; seasonality. | High |
| Education | ADEK KG Arabic mandate 240→300 · minutes/week · 2025-06 (WAM, The National) | Enrolment +1% to +2%; fees 0–2%. | Policy-led opex and staffing. | Medium |
| Alt-Assets — Data Centres | Two AUH builds under way 60 · MW · 2025-04-24 (DCD/Khazna, Khazna) | Live IT load +3–6% by Q1-2026 (Inference). | Power allocations; ramp-up timing. | Medium |
Myth 1: “Industrial & logistics rents have peaked.”
Test: Ports TEUs vs Grade-A rent prints vs pre-lets. Evidence: Jebel Ali 7.77m · TEU · H1-2025 (DP World, Gulf Business); AD Ports 3.6m · TEU · H1-2025 (AD Ports, Container News); Dubai avg WH 46 · AED/ft²/yr · 2025-Q2 (JLL).
Finding: TEUs rising; rents still printing double-digit y/y; vacancy tight. Implication: Keep OW I&L; bias upper half of our rent bands.
Myth 2: “Hospitality will weaken into peak season.”
Test: DXB/AUH pax + STR/CoStar monthly KPIs. Evidence: DXB 46.0m · pax · H1-2025 (Dubai Airports, Reuters); Abu Dhabi 79.3 · % occ · 2025-08 prelim. (STR/CoStar).
Finding: Demand at/near records. Implication: Maintain RevPAR uplift bands (Dubai +5–10%; Abu Dhabi +5–9%).
| Rank | City | Sector | Score | Why now | Confidence |
|---|---|---|---|---|---|
| 1 | Dubai | Industrial & Logistics | 4.10 | Urban last-mile & cold-chain; Al Quoz rents 75–85 AED/ft²/yr achievable on Grade-A. | High |
| 2 | Abu Dhabi | Industrial & Logistics | 4.00 | KEZAD/ICAD build-to-suit 10–20k m²; AD Ports TEUs +21% y/y. | High |
| 3 | Dubai | Hospitality | 3.90 | Event adjacency ahead of Q4-Q1 peak. | High |
| 4 | Abu Dhabi | Office | 3.80 | ESG-spec pre-lets in Masdar/Yas; Grade-A ~97% occ. | High |
| 5 | Dubai | Retail | 3.70 | Prime space scarce; MOE expansion pipeline. | High |
Answer: Our scorecard United Arab Emirates Real Estate Outlook 2025 H2 ranks Dubai industrial & logistics as the top UAE real estate opportunity, followed by Abu Dhabi industrial & logistics, Dubai hospitality, and Abu Dhabi Grade-A offices. These segments combine measurable demand (TEUs, air passengers) with constrained supply, which is the sweet spot in the UAE property market.
Answer: For core Dubai assets, base case +4–8% rent growth over six months with sub-5% vacancy; Abu Dhabi +3–6% with sub-6% vacancy. Underwrite cap rates as stable to −25 bps given easing funding costs. In UAE real estate development, push 40%+ pre-lets before pouring slabs to protect IRR.
Answer:
Answer: Risks are handover bunching and affordability friction. Use Rents’ base case of +1.5–3.5% over six months and prices of −2% to +1%, then run downside with 10k additional deliveries. In UAE real estate underwriting, model mortgage DSCR at +50 bps EIBOR to check buyer sensitivity.
Answer: Grade-A is tight (~97% occupied). Assume +2–5% effective rent growth in six months. For development, smaller 25–35k m² ESG-spec plates can poach tenants from dated stock. In UAE real estate financing, structure early renewals and modest TI/ESG capex to drive yield-on-cost without betting on cap-rate compression. United Arab Emirates Real Estate Outlook 2025 H2
Answer: With record H1 traffic and strong STR prints, use RevPAR +5–10% (Dubai) and +5–9% (Abu Dhabi). For investors, focus on upper-upscale/luxury near-event nodes; for operators, protect rates rather than chasing occupancy. In the UAE real estate debt, test a −3 ppt occupancy shock to validate DSCR.
Answer: Yes, but operator-led. With super-regional occupancy in the mid- to high-90s, assume +1–4% prime base rent and rely on turnover clauses for upside. Evaluate tenant sales density and footfall, not just headline rents; this is central to retail real estate underwriting across the UAE.
Answer: Use BTS with expansion rights, utility allocation covenants, and yard/depth-driven specs. A 100–150 bps rent uplift post-retrofit (mezz, HVAC, solar) can add 100–200 bps to IRR without leverage changes, one of the clearest alpha plays in industrial real estate across the UAE.
Answer: Apply a Two-Source Rule: pair an authority dataset (CBUAE, DLD, AD Ports, Dubai Airports) with a Tier-1 market house (JLL, CBRE, Knight Frank). For gated items (e.g., Ejari/Tawtheeq microdata), disclose proxies and upgrade paths. This keeps the UAE property market thesis defensible in IC and credit committees.
Answer: Target functional obsolescence—clear height, docking, power. Fund quick-turn capex (LED, racking, dock-levelers) and release at market. In UAE real estate leasing, a 12- to 18-month reposition can reset cash flows and add 150–250 bps to yield-on-cost with limited development risk. United Arab Emirates Real Estate Outlook 2025 H2.
Answer: Look at limited-service hotels in airport districts and secondary logistics with upgrade angles. Underwrite conservative exit cap rates, but assume modest NOI growth from operational tweaks. For many UAE real estate portfolios, these niches deliver smoother cash yield than trophy assets.
Answer: Three catalysts: (i) TEUs softening for two straight months; (ii) 3M EIBOR >4.5% reversing affordability gains; (iii) shelter disinflation accelerating while handovers bunch. If any two hit at once, move to the lower end of rent bands and pause speculative UAE real estate projects until signals stabilize.
Answer: Start with (a) land title & utility letters, (b) demand anchors (TEUs, airport pax, visitor stats), (c) permit/completion cadence, (d) benchmark leases (face rent, incentives, WAULT), and (e) funding stack tied to EIBOR hedges. This creates a repeatable, bankable case for the UAE property market.
Answer: Lead with the scorecard rank, then show two decisive metrics per asset (e.g., TEUs + rent print). Add six-month bands (rents/RevPAR/cap rates) and a downside case with explicit triggers. Clear, metric-driven storytelling is what wins capital in the UAE real estate market.
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