Dubai’s Rent Increase Cap: How the Index Sets the Ceiling

A rent increase at renewal in Dubai is a capped quantity, and the cap is not negotiated. Decree No. 43 of 2013 fixes five bands, and which band applies is decided by one comparison: how far the rent written in the existing contract sits below the average rental value of similar units, as held in the rent index approved by the Real Estate Regulatory Agency. Everything else in the renewal — the notice, the arithmetic, the certificate — hangs off that single distance.

What follows reconstructs the mechanism end to end from the decree, from Law No. 26 of 2007 as amended by Law No. 33 of 2008, and from the Land Department’s own guide and index service. It applies to commercial premises as it does to residential ones, and it reaches into the free zones, which is the part most often assumed away when a lease is underwritten.

What Decree 43 of 2013 caps, and where it reaches

The decree, issued on 18 December 2013 and in force from that day, sets a maximum percentage for the renewal of a lease. Article 1 lists five cases, and each is defined by the gap between the current rent and the average for comparable units.

Two features of the scope matter more than the percentages. Article 2 applies the decree to landlords, private and public alike, including those in special development zones and in free zones such as the Dubai International Financial Centre, which removes the assumption that a free zone address sits outside the cap. Article 3 hands the definition of “average rental value” to a single named instrument, the Rent Index of the Emirate of Dubai approved by the Real Estate Regulatory Agency, so the cap has no meaning independently of that index.

Who starts the clock, and when

The cap governs how much, and the tenancy law governs when. Under Article 13 of Law No. 26 of 2007 in the wording given to it by Law No. 33 of 2008, either party may, before the contract expires, amend any of its terms or review the rent, upward or downward. Where the parties do not agree, the Tribunal determines a fair rent using the criteria in Article 9.

Article 14 attaches the deadline. A party wishing to amend any term must notify the other no less than 90 days before the contract expires, unless the parties have agreed otherwise. That last clause is the one worth reading twice in a commercial lease, because it makes the 90-day rule a default rather than a fixed rule, and a longer or shorter notice period agreed in the contract displaces it. A landlord who serves nothing renews on the existing terms; a landlord who serves on day 89 has served late.

From the index query to the new rent, step by step

The Land Department publishes the index through a query service rather than as a table. Its Rental Index service, on a site last updated on 19 August 2026, asks for the contract end date, the property type and the current annual rent, and identifies the unit by one of three keys: a nine-digit DEWA premise number, an Ejari contract number, or an area selection narrowed to a building or community.

Complexes are found instead by land number or by municipality number with a sub-number, and floor area is entered in either square feet or square metres. The service returns a certificate rather than a raw figure, which is the form in which the average enters the calculation.

The arithmetic that follows is set out in the Land Department’s Tenancy Guide, which works a full example. Where the index average is AED 80,000 and the contract rent is AED 60,000, the shortfall is 25%, which falls in the 21% to 30% band and permits an increase of 10%. The increase is AED 6,000 and the renewed rent is AED 66,000. Recomputing that example step by step reproduces it exactly, and it carries one consequence the guide does not draw out: at AED 66,000 the rent is still 17.5% below the same average, which is the 5% band rather than the 10% one. A capped increase does not close the gap it was measured against.

The commercial branch of the same index

The index is not one list. The Tenancy Guide states that it was created pursuant to Law No. 1 of 2009, that the Regulatory Agency creates, revises and updates it periodically, and that it is divided into three main areas by region — Deira, Dubai and the freehold areas — with uses classified as residential, commercial and industrial. Each area record holds the types of units, the minimum and maximum rental values and the average payment.

For retail the guide records a separate arrangement: rent calculators built for commercial complexes and malls according to their respective classifications. The live service shows the same split, with its own set of fields for shopping mall, retail sub-type and shopping mall unit type that residential queries never see. One further provision belongs to commercial tenancies specifically. Article 25 of the tenancy law lists, among the grounds on which a landlord may seek eviction before expiry, a commercial property left unoccupied without valid reason for 30 consecutive days or 90 non-consecutive days within the same year — a clause with no residential equivalent, and one that turns a quiet unit into a legal question rather than only a revenue question.

Where the mechanism stops

Three limits are worth stating precisely, because each is a place where a confident-sounding number would have to be invented. The index values are not published as a series: the service returns a certificate for one identified unit behind a captcha, so no district or mall average is quoted here. The update cycle is described only as periodic.

The third limit is documentary. The Tenancy Guide prints two texts in sequence — Law No. 33 of 2008 with its replacement wording, then Law No. 26 of 2007 in its original form — and Law 33 of 2008 expressly replaces eleven articles of the earlier text. Among them are Article 9 on how rent is determined, Article 13 on review at renewal and Article 14 on notice. A reader who lands on the later pages meets the original Article 9, with its bar on any increase before two years have passed from the start of the relationship, which is no longer the operative wording. Everything above follows the 2008 wording. Beyond that, Article 9 as amended leaves the Tribunal a wide margin: it weighs the Agency’s increase criteria, the overall economic situation in the emirate, the condition of the property, the average rent of similar property in similar markets in the same area, and any other factors it considers appropriate.

What the sequence gives an owner to plan with

The mechanism is deterministic enough to model and bounded enough to be honest about. For any unit the permitted increase at renewal is a function of one number the owner does not control, which is the index average named in Article 3, and one the owner does, which is the rent agreed at the last renewal. Where the current rent sits within 10% of the average, the answer is zero whatever the market has done.

Two planning consequences follow from the arithmetic rather than from opinion. First, a unit let well below the index converges on it in steps, and each step lands in a narrower band than the one before, so the path is a decelerating series rather than a single catch-up. Second, because the cap binds only at renewal and the notice under Article 14 is a default that a contract may vary, the deadline that governs a commercial lease is the one written into that lease, and it should be read from the document rather than assumed from the statute.

Conclusions

The dates are the operative part of this mechanism, and they run as follows. Decree No. 43 of 2013 was issued on 18 December 2013 and took effect the same day; it caps the renewal increase at nothing where the rent is within 10% of the index average, at 5% between 11% and 20% below, at 10% between 21% and 30%, at 15% between 31% and 40%, and at 20% beyond that, in free zones and the Dubai International Financial Centre as much as anywhere else in the emirate. Notice to amend any term is due no less than 90 days before expiry under Article 14 of Law No. 26 of 2007 in its Law No. 33 of 2008 wording, unless the lease sets a different period, and Law 33 of 2008 was itself issued on 1 December 2008 and superseded eleven articles of the 2007 law. A commercial unit left unoccupied for 30 consecutive or 90 non-consecutive days in one year becomes an eviction ground; the end-of-term grounds require 12 months’ notice through a notary or registered post; a property repossessed for the owner’s own use may not be re-let for two years if residential and three if not; and a former tenant’s right of first refusal after reconstruction expires 30 days after notice. Against those fixed periods sits one interval that is not fixed at all: the index behind every band is revised, in the Land Department’s own words, periodically — which is why the band applicable to a given unit is a fact to be queried at renewal rather than a number to be carried forward from the last one.

This material is informational in nature and does not constitute legal, tax or financial advice.