UAE Commercial Leasing Booms with Over 50% Rise Amid Strategic Reforms

Editorial Team

Last updated 3-06-2025

4 min

Commercial leasing in the UAE surged 50.

4% year-on-year in Q1 2025.

Office leasing leads the charge with a 62.

7% increase and over 101,000 new deals.

Reforms like 100% foreign ownership make UAE's market "strategically compelling" for investors.

Residential property is booming too, with villa transactions up nearly 52%.

Chestertons MENA reports structured growth across all property segments, showing investor confidence.

Commercial leasing activity in the UAE is booming this year, with new figures from property experts Chestertons showing a remarkable 50.4% rise in leases compared to the same quarter last year. According to the company's latest Q1 2025 Market Report, businesses are flocking to established commercial districts across the UAE, partly due to attractive legal reforms, robust investor confidence, and an overall resurgence in business formation.

During the first quarter alone, office leasing deals topped the charts, jumping by an impressive 62.7% from last year—with over 101,000 new deals signed. Retail leasing was no slouch either, clocking in 36,000 new transactions worth around AED 3.4 billion. Looks like the UAE's numerous shopping centres and bustling high streets aren't slowing down any time soon.

Chestertons' Executive Director, Mohamed Mussa, explained this surge quite neatly, saying it's less like a short-lived market bounce-back and more like "a redefinition of the region's investment profile." With the UAE government rolling out regulations like 100% foreign business ownership, new federal tax structures, and clear legal mechanisms to sort disputes quickly, it's clear why many businesses are queing up to invest.

In May, Chestertons hosted a Commercial Conference, gathering industry insiders—from commercial property experts and valuation specialists to finance lawyers—to shed more light on these promising trends. Speaking during the conference, corporate lawyer Michael Kortbawi, a partner at BSA Ahmad Bin Hezeem & Associates LLP, noted how recent reforms have moved the UAE from being attractive into becoming truly "strategically compelling" for long-term investors.

Additional reforms include a 9% federal corporate tax rate, offset by enticing 0% tax incentives available to companies in qualifying free zone frameworks. Investor-friendly hubs like RAKEZ (Ras al Khaimah Economic Zone) have gained popularity so dramatically they could soon surpass traditional favourites such as JAFZA in Dubai. Additionally, the establishment of straightforward digital business incorporation platforms and specialised courts for dispute resolution has made doing business smoother than ever before.

Residential property didn't miss out on the party either. Villas and townhouses experienced a transaction volume increase of nearly 52%, hitting AED 76.5 billion. Apartments brought in AED 75.1 billion, rising by over 16%. Popular spots for buyers included buzzing communities such as JVC, Business Bay, and Dubai Marina, famous for their vibrant lifestyle, prime location, and strong rental returns.

Home rentals—no doubt driven in part by population growth and lifestyle shifts post-pandemic—also saw solid growth. Apartments rented out increased by more than 21%, reaching AED 11.3 billion. Similarly, villa and townhouse leases rose 21%, adding around AED 3.4 billion to the sector.

Commenting on these collective strides forward, Mania Merrikhi, the Chief Operating Officer for Chestertons MENA, praised the cohesive infrastructure supporting these gains: “Across every segment—commercial, residential, leasing, investment—the UAE is showing clear signs of structured, sustainable growth. Investor protections, the legal framework, and the broader economic vision are working in tandem.”

For some readers who've followed Arageek for a while, this might feel reminiscent of earlier property market booms, but this current growth comes across as more rooted and structured. Chestertons itself has experienced record-breaking regional expansion, boasting a massive 155% year-on-year jump in MENA transactions between January and March 2025 alone. They boldly set their sights on an ambitious 220% growth target by 2026.

Chestertons, originally founded in London way back in 1805 and operating in the UAE since 2008 from its base at the bustling Dubai Marina, clearly has plenty of reason to be optimistic. And with all the ingredients—financial incentives, popular neighbourhoods, supportive legal frameworks—all so carefully in place, the UAE's property market is well set up for a thriving future.

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