Rental Index & Re-leasing Signal

Data source

Ejari is the Dubai Land Department’s register of tenancy contracts, and registering with RERA is not optional. Article 4(2) of Law No. 26 of 2007, as superseded by Law No. 33 of 2008, requires that all lease contracts governed by the law be registered — and the law is not residential-only: the amended Article 2 reaches property leased for practising any commercial activity, trade, profession or other lawful activity, which squarely covers offices, shops, warehouses and industrial units. Our guide to RERA, Ejari and Oqood works through the current text article by article, including the widely repeated claim that a court must refuse to act on an unregistered lease — a sentence that was in the 2007 original and is absent from the replacement.

That duty is what makes this page worth building. A portal listing is an offer: it records what a landlord hoped to achieve, and it survives online whether or not anyone ever paid it. An Ejari entry is a contract two parties signed and a government register recorded, with the annual rent and the leased area on the face of it. Divide one by the other across every registration in a quarter and you have the rent the market actually cleared at, rather than the rent it was asked for. Every figure on this page comes from that second population and none of it from the first.

The register has one structural quirk worth knowing before you read a recent quarter. Contracts are registered when the parties get round to registering them, so late filings land against periods that have already closed. That is why the quarter in progress is excluded from the panels above rather than shown as a partial bar, and why a recent quarter can move slightly after the fact. It is a lagging record of a real market, not a live ticker of an approximate one, and for an acquisition decision that is the better trade.

New lease and in-place rents

The right-hand panel plots the same quarter twice for each segment, because each segment has two prices running at once. The register itself carries the split: every Ejari registration is flagged as a new lease or a renewal, so no inference is needed to separate them.

A new lease is priced by whoever is in the market this quarter. Both sides are free: the tenant can walk to the unit next door, the landlord can hold out for a better covenant, and the number they settle on is the live clearing price for that kind of space. An in-place rent — the rent a sitting tenant renews at — is priced by a very different negotiation. The tenant has a fit-out in the ground, a trade licence tied to the address and a business that stops trading during a move; the landlord has a covenant they already know and a void they would rather not fund. Neither side is negotiating against the open market. They are negotiating against the cost of leaving.

This is why an index built only on new leases is the honest one, and why the left-hand panel uses only those. Renewals are damped by mechanisms that have nothing to do with demand, and pooling the two would blur exactly the signal an investor is looking for.

Rent caps and escalation

The first mechanism is statutory. Under Decree No. 43 of 2013, the increase a landlord may impose at renewal is fixed on a five-band ladder tied to how far the current rent sits below the average rental value of comparable units: no increase at all where the rent is up to 10% below the average, then 5% where it is 11–20% below, 10% at 21–30%, 15% at 31–40%, and a maximum of 20% where it is more than 40% below. Two details do most of the work. The permitted percentage applies to the current rent, not to the size of the gap. And Article 1 opens with the words “When renewing Real Property Lease Contracts”, so it is a renewal mechanism only — there is no lawful route to reprice a running term.

The consequence for a rent roll is that an under-rented tenancy cannot be brought to market in one step. Each renewal lifts the rent by a capped percentage of what it already is, which narrows the gap and steps the applicable band down, so a materially under-rented unit closes over several cycles rather than one. Yield uplift on a standing tenancy is scheduled and capped rather than opportunistic. Our guide to the rent-increase rules and the Smart Rental Index walks a renewal through the ladder, and the commercial landlord and tenant guide sets out the notice periods that go with it — ninety days to amend terms at renewal under Article 14, twelve months to recover possession at expiry under Article 25(2).

The second mechanism is contractual, and it is the one that matters most on the commercial side. The decree carves nothing out — it applies to landlords, private or public, across Dubai including special development zones and free zones, with no exclusion for offices, retail or industrial units — but the benchmark it measures against is another matter. DLD names its published index the Smart Residential Rent Index and states that commercial and industrial indices are under development and will be announced upon completion, without attaching a date. In the absence of a published commercial benchmark, most Dubai commercial leases fix their own escalation at signing: a stepped uplift written into a three- to five-year term. That escalator carries the renewal line upward on a schedule agreed years earlier, whether or not new lettings are being agreed at that level today.

So the direction of the gap is not a constant, and this is the part most commentary gets wrong by assuming it is. Where the new-lease line in the right-hand panel sits above the in-place line, the standing rent roll is behind the market and turnover is an uplift a landlord captures unit by unit. Where it sits below, the rent roll is ahead of the market: today’s income is contractual and real, but it is not what the next tenant will pay, and the income is exposed at renewal. Read the panel for the segment and the quarter in front of you. Do not carry a direction over from something you read last year.

Units and conversion

Ejari records the leased area of a contract in square metres, so the figure this page computes from the register is AED per square metre per year — the annual contract rent divided by the area recorded on that contract. That is the raw measurement, and it has not changed.

It is not, however, the unit this market speaks in. Office, industrial and standalone retail leases in Dubai are conventionally quoted as an annual rate per square foot, and the sale-price instruments elsewhere in the toolkit — the Market Index, the Commercial Price Index and the Area Comparator — all report AED per square foot. So the rate panel shows the square-foot figure first, and the toggle above it switches to the register’s own square-metre figure whenever you want to read the measurement as recorded.

The conversion is stated on the panel because a government figure should never be quietly restated in a different unit. It is arithmetic and not a second measurement: one square metre is 10.7639 square feet exactly — the international foot has been defined as 0.3048 metres since 1959 — so a rate per square metre is divided by that number, and nothing else is done to it. Switching the toggle back reproduces the registered figure to the digit.

Reading the results

The left-hand panel is an index, not a price. Each segment is set to 100 in its own first quarter and every later quarter is expressed relative to that starting point, with a dashed line marking the base. The consequence is easy to state and easy to forget: the lines are comparable in shape, not in level. A segment sitting below another has not become cheaper than it; it has moved differently from where it began. The legend under the chart carries each segment’s latest reading and its total move since base, and the right-hand panel is where the actual rates live. An index has no unit of area at all — it is a ratio to its own base quarter — so the sq ft / m² toggle changes nothing on the left-hand panel.

Three things follow for anyone using it seriously. Read the direction of travel rather than a single quarter’s step — the series is ten complete quarters long, which is short, and one quarter is noise. Read the segments against each other rather than against a national figure; the whole point of splitting residential, retail and office is that they have not been moving together. And read the index alongside the gap panel, not instead of it: the index tells you where new lettings have gone, the gap tells you what that means for income already on a lease.

Buying tenanted stock

Article 28 of Law No. 26 of 2007 provides that transferring ownership does not affect the tenant’s right to continue occupying under the lease agreed with the previous owner. You buy the building and you inherit its tenancies on the seller’s rents and the seller’s terms — not a fresh negotiation. Our guide to buying a property with tenants in place covers what transfers and what does not. What the panels above add is the direction: whether the income you are about to buy sits below or above what the market is currently agreeing, and therefore which way renewal will move it.

A rent roll below the live market is a deferred asset. The uplift is real but it arrives at renewal, through the capped ladder, over more than one cycle where the gap is wide — so it belongs in your model as a schedule, not as a day-one repricing. A rent roll above the live market is the mirror image, and it is the one that gets underwritten carelessly: a strong headline yield on today’s contracted rent, resting on a rent the next tenant will not pay. Five questions separate the two, and none of them is answered by an index:

• Is there a registered Ejari for each tenancy? Verify each registration and its status directly — the Dubai REST app will do it — rather than relying on a schedule prepared by the seller.
• When does each lease expire, and has any notice been served? Recovering possession at expiry runs on twelve months’ notice under Article 25(2), served through a notary public or by registered mail. Whether a notice the seller already served survives the sale is genuinely unsettled: the Rental Disputes Centre’s own published FAQ directs a new owner to serve their own, while some case commentary treats a validly served notice as attached to the unit. Confirm the position with the RDC or a UAE-qualified lawyer rather than assuming either answer.
• What escalation is written into the lease? On a commercial term it is usually the contract, not the decree, that governs the next increase. A lease with a fixed step already agreed prices its own renewal; a lease without one throws the question back to the statutory ladder and, on the commercial side, to a benchmark DLD has not yet published.
• What was given away to get the rent? A rent-free or reduced-rent fit-out period is standard practice in Dubai rather than the exception, and a headline rent conceded against several months of it is not the same rent. The register records the contract; it does not record the incentive.
• Where is the deposit, and which forum hears a dispute? Market practice has the outgoing landlord hand the deposit to the buyer at completion, so get written evidence of the handover. And confirm the forum: the Rental Disputes Settlement Centre established by Decree No. 26 of 2013 hears rent disputes in Dubai, but disputes arising inside a free zone that has its own tribunal are removed from that jurisdiction, and no instrument says which body applies the cap there instead.

Limits

The disclaimer under the panels calls this an indicative prototype, and that wording is meant literally rather than defensively. It is a simple trimmed median of Ejari registrations, indexed per segment and not yet mix-adjusted — directional, and not a market quote. The specific limits worth carrying away:

• It is not mix-adjusted. A quarter in which more registrations happened to come from one community, one tower or one size band moves the median even if not a single landlord changed a price. The production index removes this by stratifying before taking the median; this prototype does not.
• It is a segment median. Retail here is the shop property type pooled across the emirate, so a mall unit and a community shop sit inside the same number. Office pools a fitted floor in a prime tower with a shell unit in a secondary one. No median of that mixture describes any building in it.
• The office series is the thinnest. Its quarter-to-quarter steps carry more composition noise than the other two, which is stated in the disclaimer under the chart and is the honest reason not to read a single office quarter as a market move.
• It sees rent only. Lease length, break options, rent-free periods, fit-out contributions, service-charge allocation and tenant covenant are all invisible to it, and all of them change what a rent is worth.
• It is not the benchmark used at renewal. That is DLD’s own Rental Index service, reached through the Dubai Land Department website or the Dubai REST app and searchable by DEWA number, Ejari contract number or area. This page is independent analysis of the same underlying register; it carries no official standing in a rent review or a dispute.
• It is not advice. Nothing here is legal, tax, financial or investment advice, and no figure on this page should be relied on as the basis of an offer, a rent review or a valuation.