Key points

  • Decree No. 43 of 2013 caps renewal increases by reference to the gap between current rent and the market average: no increase where the gap is 10% or less; 5% (11–20% below); 10% (21–30%); 15% (31–40%); 20% where rent sits more than 40% below market.
  • The "market average" is not an opinion: it is the DLD's Smart Rental Index, updated annually, which classifies each building and publishes the reference ranges.
  • Any increase requires 90 days' written notice before the lease anniversary — failing which the current rent rolls over.
  • The regime applies emirate-wide, including free zones and special development zones.
  • The investor consequence: a property bought with an under-market tenancy only "catches up" slab by slab, lease after lease — the initial gap is part of the purchase price, not a footnote.

Five slabs, no private carve-out

The mechanism is arithmetic. The landlord consults the index (the DLD's online service or the Dubai REST app), measures the gap, applies the slab. A sitting tenant at 35% below market can face at most a 15% increase at renewal — however fast the market ran. A contrary clause does not displace it: the decree is mandatory law.

The smart index: the building's grade matters

Since its overhaul, the index no longer aggregates mere district averages: it grades the building — quality, amenities, management — and refines the applicable range. Two neighbouring towers do not share a reference. For a buyer this granularity is an analytical gift: the official range for the targeted asset is consultable before the offer.

What it changes in an investment plan

A yield quoted on a "to be repriced to market" basis must carry the real trajectory: slabs, notices, years. In our Dubai acquisition models the passing rent and its gap to the index are inputs on a par with price — and often the point where two comparable listings stop being comparable.

General information, verified at publication date. Rules change: every transaction calls for licensed local advice.