Dubai’s Al Quoz industrial area retained its top spot for rents, with prime rates hitting Dh100 per square foot thanks to its central location and access to major consumer hubs.
UAE Industrial and Logistics Rents Surge Amid Tight Supply
Dubai and Abu Dhabi’s industrial and logistics real estate markets are entering another year of rental growth, driven by robust trade flows, manufacturing expansion, and e-commerce demand that continues to outpace new warehouse deliveries. According to Knight Frank, rents across the sector rose sharply in 2025 and are expected to remain firm through 2026.
Dubai led the surge, with Dubai Industrial City seeing rents climb 32% year-on-year to Dh58 per square foot, and Dubai South rising 25% to Dh45–55 per square foot. Al Quoz remained the priciest submarket, with prime rents reaching Dh100 per square foot, while grade-A facilities in Jafza rose 22% to Dh40–45 per square foot. Despite planned deliveries of 6.6 million sq ft in 2026, analysts say supply remains insufficient for high-specification warehouses.
Abu Dhabi’s industrial sector also expanded, backed by government diversification strategies and manufacturing hubs such as Kezad and ICAD. Prime rents in Abu Dhabi Airports Free Zone averaged Dh625 per square metre, with Kezad Mussafah and Al Falah at around Dh550 per square metre.
Demand in 2025 was led by logistics and manufacturing occupiers (21% each), followed by retailers (14%) and tech operators (12%). Mid-sized warehouses of 10,000–50,000 sq ft accounted for over 58% of leasing activity, reflecting e-commerce and regional distribution needs.
Experts say the UAE market is maturing, with asset quality, location, and specifications increasingly determining performance. While new supply from late 2026 may ease some pressure, competition for well-located, grade-A facilities is expected to remain strong.
Knight Frank’s Faisal Durrani noted, “Investor appetite remains firm, with competition for institutional-grade stock placing downward pressure on prime yields, supporting capital values even as rental growth moderates in some areas.”
With rising trade volumes, e-commerce expansion, and reconfigured regional supply chains, the medium-term outlook for UAE industrial and logistics real estate remains strongly positive, even as occupiers face high rental costs and limited premium space.
UAE Industrial and Logistics Rents Surge Amid Tight Supply
Rents in Dubai and Abu Dhabi’s industrial and logistics sectors rose sharply in 2025 and are expected to remain high in 2026 as demand outpaces new supply. Dubai Industrial City saw rents jump 32% to Dh58 per sq ft, while Al Quoz hit Dh100 per sq ft. Mid-sized warehouses drove leasing, reflecting strong e-commerce and distribution needs. Abu Dhabi’s prime zones, including Airports Free Zone, averaged Dh625 per sq m. Experts say competition for grade-A facilities will remain intense despite new supply from late 2026. Rising trade, manufacturing expansion, and e-commerce growth underpin a positive medium-term outlook.
