Continued demand for educational facilities to spur UAE real estate opportunities

Rapid growth of residents in the UAE’s main Abu Dhabi and Dubai emirates, with each already housing over four million population in 2025, according to official estimates, is also creating a growing opportunity for investments in educational facilities.

Rasmala Investment Bank’s Real Estate Funds Head Ruggiero Lomonaco told IFN Investor that for Dubai alone, “Forward projections indicate the city could reach 5.5-6 million residents within the next decade, driven by long‑term residency programmes and continued economic expansion.”

Citing figures from Dubai’s Knowledge and Human Development Authority (KHDA) – which oversees this emirate’s private‑education data – Ruggiero said capacity utilization is currently in the 85-88% range. KHDA expects continued growth, with demand for 70-100 new schools over the next 10 years.

With a huge potential for Shariah investments in real estate, the most attractive opportunities lie in new developments – where a typical school costs between AED120 million (US$32.67 million) and AED180 million (US$49 million) to build, depending on size, land cost and specification.

“Most operators prefer long leases of 20-30 years. For investors, schools generally deliver an 8-9% yield on cost, with annual rent escalations of around 2%.” This yield estimate is based on KHDA’s tracking of around 220 private schools and over 80 active school operators in Dubai currently.

“Private investors are active in acquiring individual schools and renting them out. There are some brokers who specialize in linking investors with the developers and the schools. Classic real estate business.”

Meanwhile, Taaleem Holdings Chairman Khalid Al Tayer said the listed education group remains confident of growth potential within the emirates, with plans to establish four additional new schools – comprising three schools in Dubai and one in Abu Dhabi – by 2027.

This Shariah compliant group now operates 34 schools – with 12 self-owned private schools, and 22 as UAE-government partnership schools. The group remains open to acquiring more educational facilities, said Khalid.

Its enrolment for the current academic year, which began in September 2025, stands at almost 19,000 for its own schools (78.3% capacity utilization) – with another 5,200 students to be added over the next year and 9,100 more in 2028.

Citing the influx of expat population plus the rising number of young professionals – including accelerated growth in female employment – Khalid said the current enrolment of over 23,000 for the government partnership schools (77.2% capacity utilization) could see an increase of 6,900 next year. Overall, Taaleem is expecting to be a significant player in the UAE, where the private K-12 education market size is anticipated to grow from US$7.2 billion in 2025 to US$10.3 billion come 2030 – based on estimates by Mordor Intelligence, said Khalid.