As demand continues to far exceed supply, tight availability continues to drive rental growth, with industrial and logistics rents rising 18% YoY with Grade A units seeing sharper gains in select submarkets.
DUBAI’S LOGISTICS AND INDUSTRIAL RENTS CLIMB 18% YoY
As demand continues to far exceed supply, tight availability continues to drive rental growth, with industrial and logistics rents rising 18% YoY with Grade A units seeing sharper gains in select submarkets. Institutional-grade occupancy remains near 95%, leaving tenants with limited options. Rents vary by stock type and location. Al Quoz maintains premium pricing for its smaller, high-visibility units catering to retail, fitness, and last-mile logistics. Dubai Investment Park shows a similar profile, with e-commerce and 3PL demand driving a 25% YoY rental increase and keeping vacancies minimal. In contrast, larger-format stock in Dubai Industrial City and National Industries Park faces sublease restrictions and low transaction activity, with rent increases stemming from limited supply rather than volume. Despite rising rents, occupier sentiment remains strong. Tenants continue to compete for prime Dubai assets or shift toward cost-efficient options in the Northern Emirates. The growing number of build-to-suit deals highlights occupiers’ intent to secure long-term space in a persistently tight market.
INSTITUTIONAL DEVELOPMENT SHAPING CURRENT TRENDS
The market remains significantly undersupplied from an institutional standpoint, with limited speculative development and a shortage of large-scale land. This is gradually shifting as developers such as Aldar, Sweid & Sweid, and Radius Group deliver a new wave of institutional-grade logistics projects built to global standards. Over 7 million sqft is under development for delivery within the next two to three years, mainly in Al Warsan and National Industries Park. Notable schemes include the 2 million sqft Sweid & Sweid Terralogix Logistics Park and the Aldar–DP World Logistics Park, a speculative 1.6 million sqft project. Build-to-suit activity is also rising, with major occupiers such as Dnata, Transworld, and DSV committing to bespoke facilities ranging from 323,000 to 600,000 sqft. Despite the strong pipeline, robust pre-leasing indicates limited oversupply risk, with upcoming completions expected to ease tenant pressure and strengthen the UAE’s position as a regional logistics hub.
