The UAE property market is moving into a different part of its cycle after the Iran conflict, and Jefferies' latest view places Abu Dhabi in a relatively stronger medium-term position compared with Dubai. The brokerage highlights that a period of exceptional expansion following the pandemic has transitioned into a phase of normalization.
Jefferies notes the UAE real estate market expanded to $290 billion in 2025, equivalent to a compound annual growth rate of 30% since 2021. That rapid growth has begun to moderate, with observable divergence between the two largest emirates.
Market activity and pricing
- Dubai experienced three consecutive months of price declines through May, with prices down 3.1% versus February and transaction volumes falling by roughly 38% over the same period.
- Abu Dhabi has seen more limited weakness: prices fell 0.6% and volumes declined about 35% in May compared with February.
On balance, Jefferies expects the adjustment to be a market correction rather than a systemic dislocation, but it anticipates the two emirates will perform differently as the market settles.
Stocks Jefferies favors
The firm singled out three listed developers as its top-rated names in the sector, each for specific operational or balance-sheet attributes that Jefferies believes will support returns through the medium term.
Aldar (ADX:ALDAR)
Jefferies prefers Aldar as its Abu Dhabi pick. The brokerage points to higher medium-term pre-sales expectations and a diversified business mix that includes project management and logistics assets tied to elevated UAE infrastructure spending. Jefferies highlights a new AED55 billion public-private partnership pipeline as a near-term growth opportunity for companies exposed to infrastructure and related services.
Although Aldar's current yield is described as lower than peers, Jefferies projects it will rise to exceed 5% by 2028. On valuation, Aldar trades at seven times 12-month forward price-to-earnings and sits 19% above Emaar Properties, which remains below Aldar's 10-year average premium of 26%.
Emaar Development (DFM:EMAARDEV)
Jefferies characterizes Emaar Development as a "cash machine," emphasizing its strong cash generation capabilities even in the face of an anticipated market correction. The firm expects medium-term pre-sales to remain around mid-cycle levels, supported by a land bank of approximately 0.3 billion square feet strategically located for villas and master-planned communities.
Jefferies' medium-term earnings per share forecast for Emaar Development sits above consensus, and it projects 2026-27 dividends to be 17-19% higher than Street estimates. The stock is presented as trading on a 9% yield and at roughly a 55% discount to Jefferies' net asset value estimate.
Emaar Properties (EMAR)
While Jefferies flags caution around the tourism outlook, it underscores that Emaar Properties benefits from recurring income derived from prime retail assets, which provides a stabilizing cash flow element. The firm's forecasts for Emaar beat consensus, and it regards the AED1.00 dividend per share as highly secure despite the company's sizeable AED65 billion capital expenditure program.
Jefferies also notes Emaar's status as one of the most liquid stocks across the Middle East and North Africa region. The stock is described as offering an 8% yield and trading at an approximate 55% discount to third-party net asset value assessments.
Takeaway
Jefferies' assessment frames the current environment as a normalization following an extraordinary growth phase. The brokerage is constructive on selected names that combine stronger pre-sales, substantial land positions, recurring retail income and exposure to infrastructure spending, while anticipating a correction in prices and volumes rather than a full-blown market breakdown.