Archers Valuation & Advisory said the market was not showing signs of capital withdrawal despite heightened regional uncertainty, but investors and lenders were becoming more selective in the way they price assets, assess risks and structure transactions. The shift points to a more cautious investment climate, particularly in real estate, private credit, restructuring and cross-border acquisitions, where valuation assumptions are being tested more rigorously.
“What we are seeing is not a withdrawal of capital from the UAE market. If anything, the UAE continues to attract capital during periods of regional uncertainty. The approach to risk has become more disciplined,” Managing Partner Rus Kolinko said.
Kolinko said lenders were asking harder questions, investors were spending more time assessing downside scenarios, and legal and restructuring advisers were becoming involved earlier in transactions. That pattern reflects a market moving from rapid expansion towards institutional scrutiny, with capital still available but no longer deployed on optimistic projections alone.
The UAE’s appeal has been strengthened by robust economic growth, strong banking liquidity, expanding non-oil activity and a regulatory framework that continues to attract international companies, family offices and high-net-worth individuals. The economy expanded sharply in 2025, supported by trade, tourism, finance, logistics and real estate, while non-oil sectors accounted for the bulk of output.
Foreign direct investment has also continued to rise, with inflows reaching $45.6 billion in 2024, up from $30.7 billion a year earlier. The country has sought to build on that momentum through its national investment strategy, free-zone expansion, long-term residency schemes and broader foreign ownership rules across many business activities.
Dubai and Abu Dhabi remain the main magnets for capital. Dubai’s property market has drawn overseas buyers seeking rental yields, residency-linked investment routes and exposure to a dollar-pegged economy. Abu Dhabi has benefited from sovereign-backed development, infrastructure spending and the growing role of institutions such as Mubadala, ADQ and Aldar in shaping long-term investment themes.
Even so, the market is no longer being viewed as uniformly low-risk. Valuation advisers say transaction parties are paying closer attention to refinancing costs, project delivery schedules, debt service coverage, tenant quality, geopolitical exposure and exit assumptions. That is particularly relevant in property and infrastructure deals, where higher interest rates and a heavy development pipeline can affect future returns.
Dubai’s residential sector has remained strong, but analysts have warned that a wave of planned supply could test pricing power in some districts if demand slows or financing conditions tighten. Developers with strong balance sheets and established delivery records are still favoured, while speculative projects and highly leveraged buyers face closer scrutiny.
The banking system has shown resilience, supported by strong capital buffers, deposit growth and profitability. Concerns about capital flight have not translated into visible stress in the financial sector, and lenders have continued to support trade, property and corporate activity. Still, banks are placing greater emphasis on collateral quality, borrower cash flows and sensitivity to regional disruptions.
The UAE’s tax environment remains a core part of its investment proposition. The introduction of a federal corporate tax regime at 9 per cent has not removed its competitiveness, particularly as qualifying free-zone companies can still benefit from preferential treatment when they meet regulatory conditions. Investors also cite the absence of personal income tax, modern infrastructure, legal reforms and connectivity to Asia, Africa and Europe as key advantages.
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