Dubai’s commercial real estate market remained resilient in the first half of 2026 despite regional geopolitical tensions, with the office segment emerging as the biggest growth driver. Transaction value in Dubai’s commercial property market rose 8.5% year-on-year to AED 65.23 billion in H1 2026, according to an analysis by ANAROCK Middle East.Overall transaction volumes increased nearly 13% year-on-year to 6,487 deals from 5,754 transactions in H1 2025, highlighting continued demand for commercial assets across the emirate.The office segment stood out, with transaction value surging nearly 200% to AED 15.81 billion in H1 2026 from AED 5.28 billion a year earlier. Office transaction volumes also rose 38.2% to 2,571 deals.Average office prices climbed 85% year-on-year to AED 3,202 per square foot, reflecting strong demand for Grade A office space amid constrained supply in key business districts and free zones.Anuj Kejriwal, CEO – Retail and CEO – Europe, Middle East & Africa, ANAROCK Group, said the sharp rise in office transactions points to intensifying demand for premium commercial space in Dubai.Retail market also gains momentumThe retail segment recorded strong growth during the period, with transaction volumes rising 56.2% year-on-year to 853 deals.Retail transaction value jumped 174.3% to AED 3.71 billion from AED 1.35 billion in H1 2025. Average retail prices also increased 54% year-on-year to AED 3,486 per square foot.ANAROCK attributed the rise to strengthening consumer and business confidence, along with increasing investor interest in well-located retail assets.Record Q1 followed by Q2 moderationDubai’s commercial real estate market recorded its strongest quarter on record in Q1 2026, with transaction value estimated at AED 40.75 billion, more than 40% higher than the year-ago period.The strong performance came despite escalating regional tensions, with Dubai continuing to attract regional and global capital during periods of geopolitical uncertainty.Activity moderated in Q2 following the exceptional first-quarter performance. Transaction volumes fell around 22% sequentially, while transaction value declined close to 40% quarter-on-quarter.However, the decline was partly due to a high base created by large land transactions in Q2 2025. On a year-on-year basis, Q2 2026 transaction volumes were broadly stable, declining around 1%, while transaction value was around 21% lower.Despite the moderation, pricing remained firm. Average commercial property prices rose 34% year-on-year in Q2 to AED 3,186 per square foot, suggesting that buyers continued to pay a premium for prime, income-generating assets.Investors shift from land to income-generating assetsLand transactions weakened during H1 2026, indicating a shift in investor preference.Land transaction volumes fell 29.3% year-on-year to 941 deals, while transaction value declined 9.3% to AED 33.19 billion from AED 36.60 billion in H1 2025.The trend suggests that investors are increasingly moving away from land banking towards income-generating commercial assets such as offices and retail properties.Other segments, including hotel apartments and rooms, buildings and industrial assets, recorded a 5.3% increase in transaction volumes to 2,053 deals. However, transaction value declined 17.9% to AED 11.33 billion.Outlook remains positiveANAROCK expects Dubai’s commercial real estate market to sustain its growth trajectory through the remainder of 2026, supported by the emirate’s tax advantages, freehold ownership framework for foreign investors and continued expansion of the Golden Visa scheme.Kejriwal said near-term transaction volumes could continue to fluctuate with regional sentiment. However, tight Grade A office supply, rising rents and steady occupier demand are expected to support the market’s underlying growth.The H1 data also highlights a notable change in investor preferences. While land continues to account for a significant share of commercial transaction value, the sharp rise in office and retail activity suggests growing appetite for assets that offer income potential, particularly in prime locations.With office transaction values nearly tripling and average prices rising sharply, the office segment has emerged as the key engine of Dubai’s commercial real estate market in 2026.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)