UAE Retail Market Dynamics, Q2 2026

Dubai's retail contract volumes declined 0.2% annually and 14.2% quarterly in the year to Q2 2026, reflecting caution amid reduced tourism. Abu Dhabi displayed resilience with 4.4% annual growth driven by both new contracts and renewals, underscoring lower tourism dependency and strong fundamentals underpinning its retail environment.

Dubai's citywide vacancy improved to 4.7% in Q2, down from 8.0% a year earlier, driven by growing levels of demand in secondary regional and smaller-format malls, which aims to capture domestic consumer demand.

Prospective tenants are increasingly seeking lease flexibility and operational incentives to manage cost pressures. Landlords are selectively providing these on a case-by-case basis through flexible deal structures and performance-based terms, reflecting adaptation to operational challenges and profitability concerns.