Limited levels of available supply, infrastructure development delivery and alternative assets including last-mile logistics and data centres, are driving the UAE’s real estate performance in 2025, according to an industry report.
The enabling of the conversion of qualified non-freehold properties will drive demand across submarkets, while new infrastructure projects and alternative assets are expected to propel real estate development in the UAE this year, according to the report by JLL, a leading global commercial real estate and investment management company.
UAE real estate performance
“Although the MEA region’s construction project market slowed in 2024, the UAE dominated construction project awards during the year, securing the largest share with 47 per cent, amounting to $34 billion,” according to JLL’s Middle East and Africa Market Review and Outlook 2025.
In terms of sectors, the UAE excelled in residential and mixed-use projects, awarding $28.3 billion and $4.6 billion, respectively, it said.
Taimur Khan, Head of Research MEA at JLL, said with inflation rates stabilising and a robust labour market, the real estate sector is witnessing robust demand across key sectors in both Dubai and Abu Dhabi.
“GDP growth has been amongst the strongest in the UAE as compared to other GCC countries, which is a testament to the government’s continued strategic efforts to attract investment,” he said.
Gary Tracey, Head of Project & Development Services UAE at JLL, said despite rising construction costs, the UAE’s real estate market is expected to continue its upward trajectory in 2025, as evidenced by robust order books and strong performance across the residential and mixed-use project sectors.
“This demonstrates the market’s resilience and underlying strength, but also underscores the need for diligent cost control and innovative solutions to ensure sustainable growth,” Tracey said.
Robust demand in Dubai
The report said 2024 ended on a strong note for Dubai’s residential sector as sales transactions grew by 32 per cent compared to the previous year, totalling AED367 billion.
Investor appetite remained strong for off-plan properties, which accounted for the majority of transactions valued at approximately AED223 billion, representing 60.7 per cent of the total.
On the back of strong demand, developers launched around 157,000 units in 2024, the most in a single year, the report said, citing data from REIDIN.
JLL said the rental market, on the other hand, recorded a 15.7 per cent annual growth in lease rates at a slower pace of increase, indicating rents may be stabilising over the short-medium term.
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