Oman’s hospitality sector delivered a strong performance in 2025, supported by continued growth in tourism demand and improving connectivity. Airport traffic reached 14.9 million passengers, up 2.8% year-on-year, reflecting steady recovery momentum and enhanced route networks. This translated into solid hotel performance, with the 3–5-star segment welcoming approximately 2.4 million guests, a 10.8% increase compared to 2024, supported by both domestic and international segments, contributing to greater demand diversification.

Dubai's retail and warehouse sectors demonstrated resilience and growth in 2025, supported by strong fundamentals including record tourism, population growth, and rising e-commerce activity. Both sectors, however, faced tightening supply conditions that shaped market dynamics throughout the year. The retail sector experienced robust growth in 2025, with sales transaction values rising 48.4% year-on-year to AED 4.6 billion, significantly outpacing the 7.6% increase in transaction volumes. Rental activity showed signs of supply constraint, with new leases declining 15.7% whilst renewals strengthened by 6.5%, as tenants prioritised retaining space in prime locations amid limited availability, pushing rental rates 7.1% higher year-on-year.

Saudi Arabia's three major residential markets delivered divergent performances in 2025. Riyadh recorded approximately 56,600 transactions, down 31.4% year-on-year, as affordability constraints and elevated financing costs dampened buyer activity. Despite the decline in transaction volumes, average transaction prices reached SAR 1.7 million, the highest level in recent years, with apartment and villa prices appreciating 6.6% and 9.7%, respectively. The rental market remained strong throughout the year, ultimately prompting the Government to introduce a five-year rental freeze in late September 2025.

The paradox of geopolitical shock in the Gulf It is a well-established fact that geopolitical crises affect real estate markets differently[1]. Short-lived crises, in particular, may have fleeting effects on equity markets,[2] and even subside before real estate markets, which operate on longer adjustment cycles and are measured in months rather than minutes, have time to respond. This was certainly […]