Key Takeaways
- The rent-increase ladder is set by decree, not by the index — Decree No. (43) of 2013 fixes the maximum increase at renewal at 0%, 5%, 10%, 15% or 20% according to how far the current rent sits below the market average. The index only supplies the comparison figure.
- The decree carves nothing out — Article 2 of the decree applies it to landlords, "whether private or public entities, in the Emirate of Dubai, including those in Special Development zones and free zones", and no article excludes offices, retail, warehousing or industrial premises.
- The smart index behind it is residential-only for now, with no published date for change — DLD's own FAQ names it the Smart Residential Rent Index and states that "commercial and industrial indices are under development and will be announced upon completion". DLD has never put a date on that.
- Increases apply only on renewal — Article 1 begins "When renewing Real Property Lease Contracts", so there is no lawful route to reprice a running term using the index.
- Ninety days' notice is the procedural gate, and it is contractually displaceable — Article 14, as substituted by Law No. (33) of 2008, opens "Unless otherwise agreed by the parties to a Lease Contract". That carve-out is in the statute, not just in DLD's guidance, which matters in any negotiated commercial lease.
- Tenancy law reaches commercial premises by definition — Article 2 of Law No. (26) of 2007, as substituted in 2008, defines "Real Property" as immovable property leased "for residential purposes or for practising any commercial activity, trade, profession, or other lawful activity".
- The old two-year freeze on increases is gone — the 2007 original barred any rent increase or amendment "before the lapse of two years"; Law No. (33) of 2008 replaced Article 9 wholesale and the restriction did not survive. Anyone still working from the 2007 text is working from repealed law.
- Closing a large rent gap takes several cycles, not one — the capped percentage is applied to the current rent each renewal, so a rent roughly 29% below benchmark converges over about three renewals rather than in a single step.
A note on this page's confidence level, and on two things nobody publishes. Every legal proposition on this page is quoted from the primary instrument on the Government of Dubai legislation portal — Decree No. (43) of 2013, Law No. (26) of 2007, and critically Law No. (33) of 2008, which superseded eleven articles of the 2007 law including the two this page depends on. Where this guide quotes the tenancy law, it quotes the amended text, and says so. Everything about the index itself comes from DLD's own FAQ, e-service and newsroom.
Two things are genuinely unpublished, and no estimate fills either gap here. DLD publishes no numeric building-classification scale and no count of assessment criteria. It names the criteria — construction quality, architectural design, energy efficiency, services, location — but there is no official "1 to 5" grade, no star rating and no "60-plus criteria" figure anywhere in DLD's material, despite all three circulating widely in agency marketing. None of the three is official, and none is stated here. If you need to know how a specific building was graded, ask DLD directly, because you cannot reverse-engineer it from anything published. DLD publishes no date for the commercial and industrial indices. It has committed to building them and nothing more. Do not plan a commercial acquisition around their arrival.
The figures below are illustrative arithmetic on the verified ladder, not market data for any real asset.
A retail unit is let at AED 200,000 a year. The published average for comparable units is AED 280,000, so the rent is 28.6% below the benchmark — the 21–30% band, allowing an increase of 10%.
- Renewal 1: AED 200,000 + 10% = AED 220,000. The gap is now 21.4%, still in the 21–30% band.
- Renewal 2: AED 220,000 + 10% = AED 242,000. The gap falls to 13.6%, dropping into the 11–20% band.
- Renewal 3: AED 242,000 + 5% = AED 254,100. The gap is now 9.3% — under 10%, so no further increase is permitted.
Three renewal cycles take contracted rent from AED 200,000 to AED 254,100, a cumulative 27%, and the asset is then at benchmark. On a hypothetical purchase price of AED 3,000,000 the gross yield moves from 6.7% to 8.5% over that period — assuming the benchmark itself stands still, which DLD says it will not, since the index "is updated annually to reflect changes in the real estate market". Model the same shape against your own numbers using the rental index tool and the rental yield calculator.
Before you sign a commercial lease:
- Read the rent review clause first and establish whether it references the RERA index, a fixed uplift, an open-market review, or nothing at all.
- Check the notice mechanic in the lease against the ninety-day statutory position, and whether the lease purports to vary it. Article 14 expressly permits the parties to agree otherwise, so a variation here is likely to bind you.
- Do not accept a "no increase for the first two years" assurance as a matter of law. It was the position under the 2007 original and has not been since 2008. If you want that protection, negotiate it into the lease as a term.
- Confirm the premises will be registered on Ejari, and in whose name, before committing to fit-out spend.
- Establish the benchmark position at the outset: if you are signing at or near the published average, there is no headroom for the landlord to build on later, which is a negotiating point in your favour on other terms.
Before you serve a rent-increase notice as landlord:
- Pull the current benchmark from the DLD Rental Index service on the day you calculate, not from a figure retrieved months earlier.
- Diarise the date ninety days before expiry and serve in writing before it; a late notice is the most common reason a lawful increase fails.
- Apply the band percentage to the current contracted rent, and keep the calculation on file.
- If the building has been refurbished or its services improved, submit a classification update request to DLD before the renewal cycle rather than after it. Because DLD publishes no grading scale, this request is also the only reliable way to learn how the building is currently classified — allow time for it in your renewal timetable.
- Keep the ninety-day notice and any twelve-month eviction notice conceptually separate. Serving the first does not preserve your position on the second.
We check the live benchmark for a specific asset, work out the band it falls into, and set out the renewal schedule that gets contracted rent to market — with the dates that make each step enforceable. For office and industrial premises, where the smart index does not yet publish, we read the rent review clause in your lease and tell you what actually governs the review. Send us the lease and the Ejari details, and we will come back with the position in writing.
This guide is general information for commercial property investors and occupiers, not legal or tax advice. Rules, benchmarks and index values change; verify current figures with the responsible authority and take independent professional advice before acting.
Frequently asked questions
0701Why does the Smart Rental Index matter to a commercial investor?
Because rental income in Dubai is governed rather than freely negotiated at renewal, and the governing instrument sets a hard ceiling on how fast a standing tenancy can be repriced. That makes this the most directly underwriting-relevant page in the future planning agenda hub: every other strategy in that cluster shapes demand, while this one caps the rate at which demand converts into contracted income on assets you already hold.
The practical consequence is that the reversionary value of an under-rented asset is a schedule, not an event. You can model it precisely — which is more than can be said for most rent-review assumptions in unregulated markets — but you cannot accelerate it.
02What is the Smart Residential Rent Index, and what does it actually cover?
It is the Dubai Land Department's AI-driven rent benchmark, and its official name tells you its scope. DLD's FAQ defines it as "an advanced system that relies on building classifications to determine rental values fairly and transparently based on comprehensive criteria, including the technical and service features of each building, using artificial intelligence".
It launched on 2 January 2025. DLD's own newsroom carries the announcement under the dateline "Dubai, United Arab Emirates, 2 January 2025", opening: "Dubai Land Department launches the Smart Rental Index 2025, marking a transformative milestone in regulating and developing Dubai's real estate sector." Take that as the commencement date; a 15 January 2025 date circulated in secondary coverage and appears in no DLD publication.
On classification, DLD says buildings are assessed on "criteria including construction quality, architectural design, energy efficiency, provided services, and strategic location". That is the whole of what DLD publishes on the mechanics. There is no numbered grade scale, no letter or star band, and no criteria count in DLD's FAQ, in the launch announcement or in the February 2025 follow-up — so none is asserted here, and you should treat any agency page quoting a "1 to 5" classification or a "60-plus criteria" assessment as unsourced. What DLD does confirm is that the classification is contestable in the useful direction: "the owner or landlord can submit a request to update the building's classification through the Dubai Land Department" — the route to a higher benchmark after a refurbishment or a services upgrade. Since the grading logic is opaque, that request is also the only practical way to find out where your building actually sits.
Coverage is stated in DLD's February 2025 announcement: the index "utilises artificial intelligence to deliver accurate and standardised rental price assessments to cover all residential areas, including key districts, special development zones, and free zones". Residential areas — which is the crux of the commercial question below.
03How much can rent legally rise at renewal in Dubai?
The ceiling is set by Article 1 of Decree No. (43) of 2013, which opens: "When renewing Real Property Lease Contracts, the maximum percentage of Rent increase for Real Property in the Emirate of Dubai will be as follows". The five bands are:
| Current rent versus the average market rent | Maximum increase permitted at renewal |
|---|---|
| Up to 10% below the average | No increase |
| 11–20% below the average | 5% of the rent |
| 21–30% below the average | 10% of the rent |
| 31–40% below the average | 15% of the rent |
| More than 40% below the average | 20% of the rent |
Two points are commonly misread. First, the percentage is applied to the current rent, not to the gap — a 10% band on a rent of AED 200,000 is AED 20,000, not 10% of the shortfall. Second, the comparison figure is not a private opinion of value: Article 3 of the decree ties it to the "Rent Index of the Emirate of Dubai" approved by the Real Estate Regulatory Agency. The UAE Government portal puts the same point plainly, stating that under Law No. 43 of 2013 "rental increases in the emirate can be applied when compared with the average rent in the area as per RERA increase calculator".
04Do the rent caps apply to commercial and industrial property?
The decree does not exclude them, but the benchmark data is incomplete — and those are two different questions that are frequently conflated.
On the legal side, Decree No. (43) of 2013 contains no definitions article restricting itself to housing, and Article 2 applies it to landlords "whether private or public entities, in the Emirate of Dubai, including those in Special Development zones and free zones". The underlying tenancy law reaches commercial premises expressly. As substituted by Law No. (33) of 2008, Article 2 defines Real Property as "[i]mmovable property, and everything attached or annexed to it, which is leased out for residential purposes or for practising any commercial activity, trade, profession, or other lawful activity". Article 3, also substituted in 2008, applies the law to "land and Real Property leased out in the Emirate", with a single exclusion: property "provided free of Rent by natural or legal persons as accommodation for their employees". Commercial premises are squarely inside the regime.
On the data side, DLD is equally explicit, and equally silent on timing. Asked about the difference between the residential and other indices, its FAQ answers: "The residential index currently focuses on residential buildings, while commercial and industrial indices are under development and will be announced upon completion." The January 2025 launch announcement says the same thing prospectively, referring to "plans to expand its coverage to include additional real estate sectors, such as commercial and industrial indexes". Neither statement carries a date, a target quarter or a phasing order, and no other DLD publication supplies one. So there is no timetable to report: the commercial index is committed but unscheduled. If a broker or valuer quotes you a launch date for it, ask which DLD document it comes from, because as at August 2026 there is not one.
Meanwhile DLD's live Rental Index calculator does present separate Residential, Commercial, Industrial, Industrial Lands and Staff Accommodation categories, searchable by DEWA premise number, Ejari contract number or area. The commercial category's visible inputs are oriented to retail — the tool exposes fields such as "Retail Sub Type" and "Shopping Mall Unit Type" — and the published interface does not confirm that office accommodation is a selectable commercial sub-type. Check the tool against your own asset type rather than assuming a benchmark exists for it.
The honest reading for an occupier or investor: the statutory ladder is the framework, the smart building-classified benchmark is residential today, and the legacy commercial and industrial categories in the calculator are not the new AI-driven index. For office and industrial leases, therefore, the rent review that actually binds you is far more likely to be the one written into your lease. Read this alongside the detail on commercial landlord–tenant law, rent increases and eviction rules before assuming the ladder governs your asset, and note how the current market backdrop is described in our analysis of what the Dubai office space shortage means for investor returns.
05What notice does a landlord have to give?
At least ninety days before the lease expires — unless your lease says otherwise. The operative provision is Article 14 as substituted by Law No. (33) of 2008, which reads in full: "Unless otherwise agreed by the parties to a Lease Contract, where either party wishes to amend any of its terms pursuant to Article (13) of this Law, that party must notify the other party of this intent no less than ninety (90) days before the date on which the Lease Contract expires." DLD restates the rule for rent specifically: where either party to the Ejari contract wants to reconsider the rent, "whether by an increase or decrease, they must notify the other party of that no less than '90 days' prior to the expiry of the contract, unless the two parties agree otherwise".
The opening words are what commercial parties should notice. The carve-out is statutory, not merely administrative, so a differently drafted notice mechanic in a negotiated lease can be effective between the parties — which is precisely why the lease document, not the index, is the first thing to read.
Note also what the amended Article 14 no longer does. The 2007 original covered a party who did "not wish to renew the Lease Contract" as well as one wishing to amend terms; the 2008 replacement drops the non-renewal limb and ties the notice to amendment under Article 13. Ending a tenancy at expiry is instead governed by Article 25(2), which permits the landlord to seek eviction on expiry only on defined grounds — demolition and reconstruction, comprehensive restoration, owner or first-degree-relative occupation, or sale — and requires the landlord to "notify the Tenant of the eviction reasons at least twelve (12) months before the date of eviction", served through a Notary Public or by registered mail. Ninety days buys you a rent negotiation; removing a tenant is a twelve-month exercise.
The two-year freeze no longer exists. This is the point most often got wrong, because the superseded text is still widely reproduced. The original Article 9 provided that "the Rent may not be increased nor may any of the terms of the Lease Contract be amended before the lapse of two years as of the date when the original contractual relationship was established". Law No. (33) of 2008 replaced Article 9 in its entirety, and the substituted text contains no such restriction — it deals only with specifying rent in the contract and with how the tribunal determines the rental value of similar property. The timing constraints that actually bind today are the renewal-only trigger in Decree No. (43) of 2013 and the ninety-day notice in Article 14, not a two-year lockout. If a landlord or an adviser cites the two-year rule at you, they are quoting repealed law.
Registration is not optional either. Article 4(2), as amended, provides that "[a]ll Lease Contracts related to Real Property which is governed by the provisions of this Law, and any amendments thereto, will be registered with RERA". The mechanics of that are covered in the guide to RERA, Ejari and Oqood registration for commercial leases.
06What happens if you cannot agree at renewal?
Article 13, as substituted in 2008, sets out the sequence. The landlord and tenant "may, prior to the expiry of the Lease Contract, amend any of its terms or reconsider increasing or reducing the Rent". If they cannot agree, "the Tribunal may determine the fair Rent, taking into account the criteria stipulated in Article (9) of this Law".
Those Article 9 criteria are worth knowing before you go anywhere near a dispute, because they are broader than the index alone. The tribunal weighs "the criteria for determining the percentage of Rent increase prescribed by RERA; the prevailing economic situation in the Emirate; the condition of the Real Property; the prevailing rental value of similar Real Property in other similar Real Property markets within the same area; the provisions of any legislation in force in the Emirate regulating Real Property Rent, and any other factors which the Tribunal deems appropriate". The index feeds the first limb. The condition of your specific unit, and comparable evidence you assemble yourself, feed the others.
The forum has been renamed since. Article 4 of Decree No. (26) of 2013 replaced the name "Special Tribunal to Determine Disputes between Landlords and Tenants" with "Rent Disputes Settlement Centre in the Emirate of Dubai", and Article 6(a) gives the Centre jurisdiction to determine rent disputes between landlords and tenants of property in the Emirate "including in free zones".
Read the rest of that article before relying on the phrase. Article 6(b) takes three categories back out again, and the first of them is the one free-zone occupiers need: "The Centre will have no jurisdiction to hear the following Rent Disputes: Rent Disputes that arise within the free zones which have tribunals or special courts having jurisdiction to determine the Rent Disputes that arise within their boundaries." The other two exclusions are disputes arising from lease finance contracts and disputes arising from long-term lease contracts governed by Law No. (7) of 2006.
So the correct reading is neither that free zones are all inside the system nor that they are all outside it. A free zone with no tribunal or special court of its own leaves the dispute with the Rent Disputes Settlement Centre; a free zone that has established one keeps the dispute inside its own judicial system, and filing at the Centre would be filing in the wrong forum. This guide does not set out which of Dubai's free zones fall on which side of that line, because no official consolidated register of free-zone judicial arrangements is published. Before you sign, get the answer in writing from the free zone authority for your premises, and check that the dispute-resolution clause in your lease names the same forum the decree points to.
07How does this connect to the wider planning agenda?
The index is one of the transparency mechanisms sitting underneath the Dubai Real Estate Sector Strategy 2033, and it works alongside affordability measures such as the First-Time Home Buyer Programme and the broader growth targets in the D33 Dubai Economic Agenda. DLD frames the index in exactly those terms, arguing it "mitigates inflation" and enhances market transparency. Our commentary on the implications of Dubai's Smart Rental Index for landlords and tenants tracks how the market has responded since.
Next step
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Tell us what you are weighing up — a building, a project, an area, or a rule you need to get right — and we will come back with the specifics that apply to it.
Updated 17 August 2026 by Mitchell's Realty. Market figures quoted reflect the data available at that date.
