GCC & UAE Economy & Market Update 

The Middle East recorded 196 M&A transactions worth $23.3 billion in the first quarter of 2026, with the UAE accounting for 33 deals valued at $2.2 billion. While that marks a step down from 52 deals in Q1 2025, Ansarada's June market report is clear, this is a recalibration, not a retreat. Landmark transactions continue to flow from Masdar's $3.5 billion take-private of Greece's Terna Energy and its $6.1 billion UK offshore wind acquisition with Iberdrola, to KKR's deepening commitment to Gulf Data Hub and ADNOC's internationalization of its chemical’s strategy through XRG.

The biggest structural move of the year happened in January, and its implications are still being absorbed. Abu Dhabi's ADQ, a $263 billion sovereign wealth fund spanning Etihad Airways, the Abu Dhabi Stock Exchange, Emirates Nuclear Energy Company and over 250 subsidiaries was folded into the newly formed L'imad Holding Company under Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan. The combined platform holds approximately $300 billion in assets and sits alongside ADIA ($1.18 trillion), Mubadala ($302 billion) and Lunate ($115 billion) in an Abu Dhabi sovereign wealth ecosystem totaling over $2.3 trillion.

In real estate, the numbers speak for themselves. UAE property transactions hit AED 252 billion ($68.7 billion) in Q1 2026, a 31% year-on-year increase and a new quarterly record. Dubai's off-plan market surged 36% in value, foreign investment climbed 26%, and office sales rocketed 203% to $2.2 billion, the highest level since 2010. Over 29,000 new investors entered the market in a single quarter, coming from more than 113 nationalities. What was once a market driven by a narrow base of regional buyers is now a genuinely global one, and institutional appetite for Dubai commercial assets is showing no signs of cooling.

The UAE's economic engine is running well above expectations. Official data released in June 2026 confirmed that non-oil GDP grew 6.8% in 2025 ahead of earlier CBUAE estimates with the real economy now accounting for nearly 80% of total GDP. The central bank is holding its 5.6% growth forecast for 2026, even as Oxford Economics, Goldman Sachs and Fitch issue more cautious external projections linked to the Iran conflict's knock-on effects. On the startup and venture capital front, the UAE captured 66.5% of all MENA VC funding in Q1 2026 ($625.8 million), with fintech leading for four consecutive months. The DIFC has been declared the world's first AI-native financial centre, Tabby has been formally licensed as a Stored Value Facility, and a nationwide KYC framework is now live.

On the front of capital markets, momentum is measured but real. Dubizzle Group successfully listed on the DFM in November 2025, with Prosus anchoring $100 million as a cornerstone, a strong proof point for profitable, asset-light digital businesses seeking UAE public market access. Etihad Airways has delayed its own listing to H2 2026 or 2027 amid broader market uncertainty, but the IPO pipeline remains active, with analysts forecasting 9 to 12 new listings across ADX and DFM for the full year.

 

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