Dubai Warehouse Rents Rise 5.9% as Occupancy Rates Approach Full Capacity

Demand for industrial and logistics real estate in the United Arab Emirates (UAE) remained strong in the third quarter of 2026. According to a report by real estate consultancy JLL, warehouse rents in Dubai increased by 5.9% year-on-year, while new leasing contracts grew by 25.7%. The limited supply of modern warehousing facilities pushed occupancy rates close to full capacity in major industrial areas across Dubai and Abu Dhabi.

JLL's UAE Industrial Real Estate Market Report revealed that demand for logistics and warehousing space across the country continued to remain high. In Dubai's warehouse market, average rents increased by 5.9% year-on-year and 1.8% quarter-on-quarter in the third quarter, reaching AED 50 per square foot annually, based on the local unit of measurement used instead of square meters.

The number of new industrial and logistics property leasing contracts in Dubai increased by 25.7% compared with the same period last year. Total registered leasing contracts rose by 14% year-on-year, while the number of existing lease renewals increased by 9.5%.

New Leasing Activity Accelerates in Dubai's Warehouse Market

The number of new leasing contracts increased by 16.8% in the third quarter compared with the previous quarter. In contrast, lease renewals declined by 8.9% quarter-on-quarter. JLL attributed this decline to some businesses seeking to upgrade their existing facilities or relocate to warehouses with more suitable specifications.

The supply shortage in Dubai's warehouse sector is particularly concentrated in modern, high-quality facilities located in strategic areas. Companies are competing for available warehousing space to expand their logistics operations and strengthen their supply chains.

Modern Warehouse Investments Aim to Increase Supply

Investments aimed at expanding Dubai's warehousing capacity are continuing. DP World has begun construction of a new Grade A logistics center in the Jebel Ali Free Zone (JAFZA). Grade A facilities refer to warehousing properties equipped with modern infrastructure and high operational standards.

The Terralogix logistics park in Warsan and planned multi-unit warehouse developments in Dubai Investments Park are also expected to help alleviate the existing supply shortage. However, JLL notes that rising construction costs could delay the completion of some projects.

Warehouse Rent Growth in Abu Dhabi Remains Limited to 1.6%

Industrial and warehouse rents in Abu Dhabi increased by 1.6% year-on-year and 0.6% quarter-on-quarter in the third quarter, reaching an annual average of AED 489 per square meter. JLL attributed the lower growth rate compared with Dubai to rent increase restrictions covering a significant proportion of existing leases.

As part of logistics investments in Abu Dhabi, Khalifa Economic Zones Abu Dhabi (KEZAD) and Chinese e-commerce company JD.com signed an agreement for a 150,000-square-meter automated warehousing facility. Projects involving a 37,000-square-meter cold chain facility and 88,135 square meters of new logistics space are also under consideration.

JLL states that regional geopolitical developments are prompting companies to reassess their supply chains. According to the report, e-commerce, logistics infrastructure, and transportation investments continue to support demand for industrial real estate in the UAE.