Dubai Landlords Improve Leasing Terms As Tenants Focus On Value, Flexibility, Affordability

2026-02-26 04:17:13

(MENAFN- Khaleej Times)

Landlords in Dubai are offering flexible lease durations, rent-free periods, and staggered payment schedules, to retain tenants as supply increases

PUBLISHED: Thu 26 Feb 2026, 12:24 PM

By:
Waheed Abbas

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Landlords in Dubai are improving leasing terms and focusing on refurbishing their properties to keep prime units in strong demand, as tenants shift their focus to value, affordability, and flexibility more than in previous years.

Real estate industry executives say that the launch of the Smart Rental Index in early 2025 helps guide tenants and landlords to better negotiate their tenancy renewals.

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“Tenant behaviour became more value-driven, with households increasingly weighing affordability, quality and flexibility more carefully than in previous years. This dynamic contributed to greater differentiation between upgraded, well-positioned units and older, non-enhanced stock. In response, a growing number of landlords adopted proactive asset management strategies, including refurbishment, furnishing and improved leasing terms, supporting rent resilience and keeping prime-quality product in strong demand,” said analysts at global real estate consultancy Colliers.

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Dubai landlords are increasingly enhancing leasing terms to attract tenants in a competitive market. Many landlords are offering more flexible lease durations, moving away from the traditional one- or two-year contracts to six- or nine-month options. This flexibility appeals particularly to expatriates and professionals who seek short-term commitments due to job mobility or changing family needs. Additionally, some landlords are introducing rent-free periods or staggered payment schedules, which provide tenants with financial breathing room, especially during the first few months of occupancy.

In addition, landlords are improving the overall quality and appeal of their properties to justify and support competitive leasing terms. This includes refurbishing older units, upgrading appliances, modernizing interiors, and providing fully furnished options. Properties that were previously considered outdated are now being transformed into attractive, move-in-ready spaces, giving tenants more value for their money.

Colliers projected that 78,300 apartments and 14,800 villas will be handed over this year, compared with 37,950 apartments and 9,700 villas last year.

In 2025 and into 2026, Dubai's rental market has moved from the high‐growth phase seen in 2022–24 into a more stable and moderated expansion. Rental rates are still rising overall, but at a slower pace, particularly in high‐demand areas with limited supply. This contrasts with the double‐digit leaps seen in earlier years and reflects a maturing market where supply and demand are gradually balancing out.

“Market normalisation was further supported by the introduction of the Smart Rental Index, which improved transparency around rental benchmarks and helped anchor expectations during renewal negotiations,” said analysts.

In 2025, the rental market overall remained supported by underlying demand, while the market shifted toward more sustainable, quality-led performance.