Dubai Industrial and Logistics Rents Rise 12.3% as Supply Tightens
Dubai's industrial and logistics (I&L) leasing market recorded a 12.3% year-on-year increase in average rental rates in the third quarter of 2026, as severe constraints on prime space continued to support rental growth despite regional headwinds, according to CBRE.
The market-wide average rental rate reached $16.67 (AED 61.2) per square foot per year, representing a further 3.2% increase quarter on quarter, according to CBRE's September 2026 UAE Industrial & Logistics Report, a copy of which was reviewed by Al Masdar Al Aqaari.
Dubai Investments Park (DIP) and Dubai Industrial City (DIC) led the annual increase, with average rental rates in both locations rising 25% year on year to $17.02 (AED 62.5) and $12.93 (AED 47.5) per square foot per year, respectively.
National Industries Park (NIP) followed with annual rental growth of 23.5%, alongside a 5% quarterly increase, taking average rental rates to $14.30 (AED 52.5) per square foot per year.
Dubai South recorded a 19% year-on-year increase and an 8.7% quarter-on-quarter rise — the strongest quarterly growth among the Dubai locations covered by the report — with average rental rates reaching $17.02 (AED 62.5) per square foot per year.
In Al Quoz, average industrial rental rates increased 12.5% year on year to $18.38 (AED 67.5) per square foot per year.
Prime Space Constraints Support Rental Growth
CBRE said Dubai's industrial and logistics market is operating under severe prime space constraints, with a lack of immediately available premium warehouse stock keeping vacancy levels minimal and maintaining landlords' pricing power.
The market has remained resilient despite operational challenges stemming from regional disruptions, including rising war-risk insurance premiums and the rerouting of maritime cargo.
Several Grade A developments are progressing across Dubai's core industrial submarkets as the market seeks to address the supply shortage.
In Jebel Ali Free Zone (Jafza), DP World and Lintara Properties have broken ground on a 20,000-square-meter build-to-suit logistics facility, scheduled for delivery in the first quarter of 2027.
Aureum has also unveiled a 30,000-square-meter Grade A logistics development at National Industries Park, with delivery scheduled for 2027.
Aldar, meanwhile, has delivered the first phase of its logistics center at NIP, comprising 66,841 square meters of gross leasable area (GLA). Phase two is on track to add a further 79,546 square meters of GLA in the first quarter of 2027.
The developer is also expanding the 7 Central Logistics Hub at Dubai Investments Park by 17,000 square meters of GLA, with completion targeted for the second quarter of 2027.
In Al Warsan, Sweid & Sweid and DUTCO are developing Terralogix, a 305,000-square-meter gated logistics hub that will introduce 182,000 square meters of leasable Grade A space. The first phase is scheduled for handover in the fourth quarter of 2026.
CBRE also said Brookfield is planning large-scale logistics facilities in Al Warsan, reflecting growing development activity in non-free-zone areas.
Abu Dhabi Industrial and Logistics Rents Rise 6%
Abu Dhabi's I&L leasing market also demonstrated resilience, with sustained end-user demand and rising foreign direct investment supporting rental growth.
Market-wide average rental rates reached approximately $139 (AED 509) per square meter per year in the third quarter of 2026, representing a 6% year-on-year increase and a more modest 1.6% rise quarter on quarter.
ICAD recorded the strongest annual growth at 10.8%, taking average rental rates to approximately $125 (AED 460) per square meter per year.
Al Markaz recorded a 6.9% annual increase to approximately $105 (AED 385) per square meter per year, while Musaffah rents rose 6.7% to around $131 (AED 480).
Average rental rates at KEZAD increased 4.3% to approximately $163 (AED 600) per square meter per year, while Abu Dhabi Airport Free Zone (ADAFZ) recorded growth of 3.3% to around $169 (AED 620).
Warehouse demand and leasing activity at KEZAD remained strong. Based on pipeline transaction data, more than 30 lease agreements were signed during the first half of 2026, with an average unit size of approximately 1,800–2,000 square meters. Several large-scale transactions were also recorded, with the largest lease exceeding 17,000 square meters.
CBRE said constrained localized supply pipelines have helped insulate the domestic leasing market from regional headwinds. Occupiers have also begun incorporating multimodal overland routes into their logistics strategies while increasing domestic inventory buffer space, intensifying competition for existing high-quality warehouse stock.
Capital Continues to Target UAE Industrial and Logistics Assets
Institutional investors have continued to deploy capital into the UAE's industrial and logistics sector despite regional macroeconomic headwinds, with CBRE highlighting continued investment in Grade A warehousing and other high-specification logistics assets.
Jafza secured approximately $233 million (AED 854 million) in new tenant-led investments during the first four months of 2026. More than 43% of the long-term agreements were finalized during March and April, covering expansion and development commitments across manufacturing, logistics, healthcare, food production, vehicle handling and heavy equipment.
GFH Bank also signed a memorandum of understanding with OCTO Management Consultancies in June to develop a $300 million industrial and logistics platform across the UAE and Saudi Arabia. The platform will focus on large-format warehousing, multi-let industrial assets, cold-storage facilities and distribution centers.
In Abu Dhabi, KEZAD Group is investing $30.5 million (AED 112 million) in a purpose-built SME Hub at KEZAD Al Ma'mourah. The 25,260-square-meter development will provide 175 flexible, move-in-ready micro-industrial units, starting from 100 square meters, and is scheduled for completion by the end of 2026.
CBRE said capital deployment decisions are increasingly being shaped by long-term structural trends rather than short-term geopolitical events, with manufacturing localization, supply-chain diversification, east coast trade infrastructure and multimodal transport integration continuing to attract public and private investment.
The consultancy said these trends are supporting the continued institutionalization of the UAE's logistics real estate sector and reinforcing the country's long-term role as a regional manufacturing, distribution and trade gateway.
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