Regional Updates

While January and February recorded solid activity levels across both commercial and residential sectors, activity softened in March, due to the regional conflict as well as Ramadan, with occupiers and investors taking a more cautious and selective approach.

What we are hearing consistently across conversations with clients, occupiers and investors is not a withdrawal of interest, but a pause in their decision making. Many international buyers are reassessing timing, structure and asset selection, opting to wait for greater clarity before progressing.

The UAE office market 

Recent market insights from Dubai Office Market Report for Q1 2026, indicated that demand has not receded, but has become more focused and occupier led.

In Dubai’s office market, Q1 2026 closed with average rents broadly stable quarter on quarter, marking the first period since H1 2021 without further rental uplift. Despite this pause, rents remain materially higher year on year, reflecting the limited availability that continues to characterise prime office locations. Leasing activity was strongest early in the quarter, with March reflecting a natural slowdown in decision making. While transactional momentum eased later in the quarter, leasing requirements and enquiries continue to be registered, suggesting that occupier demand remains present but less time sensitive.

A defining feature of current demand has been its composition. The majority of leasing activity has been concentrated in smaller office units, reflecting continued demand from new market entrants, entrepreneurial businesses and international firms establishing or expanding a regional presence. At the same time, there remains sustained interest in larger office spaces, particularly in the context of renewals, consolidations and selective acquisitions within Grade A stock.

In Abu Dhabi, office demand has remained underpinned by government related entities, financial institutions and professional services firms, reinforcing the emirate’s role as an institutional and administrative centre. UK linked occupiers across advisory, energy, finance and technology sectors have remained active, with a clear preference for modern office environments aligned with ESG considerations, regulatory clarity and long term partnership with asset owners.

Across both cities, the office market is no longer defined solely by rental escalation. Instead, occupiers are increasingly focused on tenure security, regulatory protection and long term alignment, reinforcing a more strategic approach to leasing decisions.

The UAE residential market 

Dubai recorded approximately 45,200 residential transactions in Q1 2026, down 17% as per the Dubai Residential Q1 2026 Market Report. While activity was front loaded earlier in the quarter, buyer behaviour became more selective as the quarter progressed.

The off plan segment remained dominant, accounting for around 72% of transactions, while secondary market activity softened more noticeably. Pricing across Q1 remained above early 2025 levels, although more recent indicators suggest early signs of moderation in certain segments. 

By contrast, Abu Dhabi’s residential market maintained comparatively strong momentum. Transaction volumes exceeded 7,200 deals in Q1, representing one of the strongest quarterly performances on record. Off plan activity continued to dominate, supported by quality launches and sustained underlying demand, although March again reflected a shift toward more measured behaviour.

Overall, the UAE’s long‑term fundamentals remain intact, with strong Q1 off‑plan figures reflecting earlier‑agreed transactions, while recent uncertainty has driven greater selectivity, paused launches and a shift in activity that is likely to continue for the short to medium term. 

UAE Capital into the UK: Residential Markets at the Forefront

Running in parallel, UAE capital continues to flow into the UK, with residential real estate remaining central to longer term investment and wealth planning strategies. London, in particular, continues to appeal to Middle Eastern buyers seeking capital preservation, depth of demand and long term rental resilience, underpinned by transparent market structures and global connectivity. 

Interim feedback from advisory teams across both the UK and the Middle East suggests that while buyer interest remains intact, some purchasing decisions are being deferred as investors monitor pricing, currency movements and geopolitical stability, rather than withdrawing from the market altogether.

UAE purchasers are typically focused on high quality, well located residential developments, often within mixed use or regeneration led environments that offer strong placemaking credentials and long term relevance. These assets are viewed through a medium  to long term lens, prioritising optionality of use, intergenerational planning and exposure to established global cities, rather than short term pricing cycles.

Increasingly, this demand is being met through direct engagement with UK developers, rather than reliance on secondary market supply alone. Savills has seen growing interest from Middle Eastern buyers in newly launched and forthcoming schemes across London, particularly in riverside and regeneration led locations where residential is complemented by commercial, cultural and lifestyle infrastructure. Developments emerging across areas such as Nine Elms, Southbank and West London continue to resonate, reflecting the importance of design quality, developer credibility and a clear long term vision.

Developers and a Maturing UK–UAE Residential Corridor

The increasing visibility of UK developers within the UAE reflects a broader shift toward direct, strategic engagement with Middle Eastern buyers. As buyer decision making has become more considered, developers are placing greater emphasis on communicating long term value, articulating placemaking, design quality and stewardship as central components of their proposition. In the current environment, confidence of delivery and long term place performance is carrying greater weight than short term incentives or pricing momentum.

This approach aligns closely with the priorities of UAE investors and end users. Direct engagement provides earlier access to schemes, clearer insight into delivery and greater confidence around long term positioning.

Outlook

While near term sentiment continues to be influenced by global and regional uncertainty-including a revised UAE GDP growth forecast of approximately 0.3%, near term transaction volumes should not be conflated with underlying demand. The combination of UK occupier and investor demand into the UAE, alongside sustained UAE interest in UK residential markets, highlights the depth and durability of this bilateral relationship. Historically, periods of uncertainty have resulted in delayed rather than lost activity, particularly among internationally mobile buyers focused on long term positioning rather than immediate capital deployment.

Savills remains actively engaged across the UK and the Middle East, supporting investors, occupiers and developers with integrated commercial, residential and research led advice.

For more information, contact Mel Todd, Director, International Residential Sales & Marketing at [email protected].