Dubai moves to reassure investors, anticipating strong comeback from war

As Iranian missiles continue to strike downtown Dubai, property owners are cutting prices and investment bankers are temporarily moving abroad to safety, but the UAE’s government is betting on a comeback.

Four weeks into the war with Iran, the Central Bank of the UAE is trying to ensure that credit lines stay open and companies have the cash to deal with soaring freight costs and supply chain disruptions.

Since Iran’s first missile attack on its neighbor across the Gulf on Feb. 28, the UAE has tried to keep markets calm and money flowing: the Central Bank of the UAE has pumped extra cash into banks so they can keep lending, kept interest rates aligned with the U.S. to support the dirham’s dollar peg, and made clear it will provide emergency funding if needed. 

“Sovereign funds and government-linked entities continue to deploy capital, sending a strong signal that the country remains open for business,” Suneel Gokhale, Co-Founder and General Partner at VentureSouq, told The Circuit. “Instead of pulling back, policymakers have focused on maintaining liquidity, preserving business continuity, and reinforcing the country’s position as a stable hub for capital and innovation.”

Dubai investors have painful memories of the 2008 global financial crisis, when the city’s debt-fueled property boom collapsed, prices fell by more than half, and Dubai World sought to delay repayment on about $25 billion of debt. The emirate required a $20 billion bailout led by Abu Dhabi.

In the current conflict, hedge funds and banks, including Millennium Management, Citadel, JPMorgan Chase and Goldman Sachs, have told staff to work from home after the missile strikes. Many are offering employees the option to relocate temporarily to offices in London, Singapore or elsewhere.

At the same time, those firms are reviewing their presence in the UAE. Some warn that if the war drags on, firms that flooded in for its low-tax advantages could begin to move out.

“If the conflict de-escalates, we are likely to see a normalization rather than a sharp rebound,” Ryaan Sharif, a partner at Flat6Labs, said in an interview. “Investors will remain selective, focusing on high-quality assets and long-term structural themes, even as geopolitical risk premiums fade.”

In Abu Dhabi, government-backed developers such as Modon continue to support activity by launching and promoting a variety of big-ticket construction projects. Aldar Properties said its 2026 home handovers and construction pipeline remain on schedule despite the conflict, as it awarded about $1.3 billion in contracts and continued work across 141 sites without disruption. Banking and property transfers remain operational.

“The outlook remains highly dependent on the timeline for resolving the conflict between Iran and the United States,” Timur Lebedev, Head of fixed income research at Freedom Finance Global, told The Circuit.

Markets reliant on international buyers are likely to lag those driven by local and resident demand, a dynamic that puts Riyadh and Abu Dhabi in a stronger near-term position than Dubai. Energy, gold, global equities and foreign exchange are all offering active trading opportunities as they respond to the rapidly changing conditions.

“In the current environment, opportunities are increasingly driven by volatility,” Mindaugas Suklevicius, founder of HF Quarters, said in an interview.

The recovery, when it comes, will likely be uneven, said Ben Crompton, Managing Partner at Crompton Partners.

“It probably depends not just on how long this lasts and the damage that it does, but also what peace looks like – what are the kind of guarantees that are in place that this won’t happen again.