UAE warehouses near full occupancy as rents in Dubai increased 5.9 per cent year-on-year to an average of Dh50 per square foot in the third quarter of 2026, driven by strong demand for industrial and logistics space and a limited supply of modern facilities, according to a new report by real estate consultancy JLL.
he report showed that rents also rise 1.8 per cent compared with the previous quarter, reflecting continued demand from businesses seeking well located warehouses across Dubai’s key industrial areas.
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In Abu Dhabi, warehouse rents increased at a slower pace of 1.6 per cent year-on-year and 0.6 per cent quarter-on-quarter to an average of Dh489 per square meter, as rent-freeze regulations continued to limit increases across much of the market.
New rental contracts
Dubai’s industrial and logistics sector continued to attract new businesses during the quarter, with registrations of new warehouse rental contracts rising 25.7 per cent .
Overall rental contract registrations increased 14 per cent year-on-year, while renewals grew 9.5 per cent, reflecting continued demand from both new market entrants and existing businesses.
On a quarterly basis, new contract registrations rise 16.8 per cent, although renewals declined 8.9 per cent as some companies opted to relocate or upgrade their facilities rather than renew existing leases.
JLL said the limited availability of modern, well located warehouses continued to put upward pressure on rents, particularly in Dubai’s established industrial zones.
Demand for modern warehouses remains strong
The shortage of high-quality warehouse space has continued to shape decisions among logistics and industrial companies, with businesses competing for a limited number of available facilities.
In Dubai, DP World has broken ground on a new Grade A logistics center in Jebel Ali Free Zone, while upcoming developments, including the Terralogix park in Warsan and new multi-unit warehouses in Dubai Investments Park, are expected to help ease supply constraints.
However, JLL warned that rising construction costs could delay the delivery of some new facilities.
The report also noted that regional tensions have prompted businesses to reassess supply chains, increase inventory buffers and priorities reliable overland transport routes.
Abu Dhabi attracts major logistics investments
In Abu Dhabi, demand remained strong across prime industrial areas, where occupancy levels were close to full capacity.
The emirate continued to attract investment in logistics and e-commerce infrastructure, including an agreement between Kezad and Chinese e-commerce company JD.com for 150,000 square meters of automated warehousing.
Other planned developments include Axione’s 37,000-square-metre cold-chain facility at the Abu Dhabi Food Hub and Kezad KLP7, which will add a further 88,135 square meters of space.
Looking ahead, JLL expects demand for industrial and logistics facilities to remain strong across the UAE, supported by continued investment in infrastructure, e-commerce and supply chain development.
Major transport projects, including the AD Ports–Etihad Rail Bonded Corridor and the Hafeet Rail link to Oman’s Sohar Port, are also expected to improve regional connectivity and support the UAE’s position as a logistics hub.
Source: Khaleej Times