Dubai:Industrial real estate in the UAE experienced robust demand in the third quarter of 2026, with occupancy rates in prime areas of Dubai and Abu Dhabi approaching full capacity. This surge is attributed to new companies entering the market and existing businesses expanding operations, despite a limited availability of high-quality space.
According to Emirates News Agency, the sector showed resilience in the face of regional geopolitical challenges, bolstered by the growth of international and regional logistics and e-commerce companies. Investments in operational facilities and supply chains further supported the sector's sustainable growth.
There was a notable 25.7 percent year-on-year increase in new industrial leasing contracts in Dubai, indicating a rising demand for industrial space. However, renewals saw an 8.9 percent decline as some tenants moved or upgraded their facilities, though overall renewed contracts were 9.5 percent higher than the previous year.
In Dubai, average industrial rents rose by 5.9 percent annually to AED50 per square foot, driven by the scarcity of modern warehouses and high-quality industrial space. Upcoming Grade A warehouse projects are expected to ease supply constraints, although higher construction costs may delay some developments.
In Abu Dhabi, average industrial rents increased by 1.6 percent year-on-year to AED489 per square meter. Regulatory restrictions on rent hikes contributed to the moderate increase, despite strong demand and occupancy in the capital's prime industrial areas.
Investment in Abu Dhabi's logistics infrastructure is growing to meet the rising demand for advanced facilities. Notable developments include a strategic agreement between KEZAD Group and Jingdong Property to develop automated warehousing, Axione's cold-chain hub at Abu Dhabi Food Hub, and the KEZAD Logistics Park 7.
Abhishek Mittal, Head of Industrial, MEA at JLL, noted a shift in demand with new companies entering the UAE and existing occupiers moving to higher-quality facilities. The development of multimodal logistics links, such as the AD Ports Group-Etihad Rail bonded corridor, is expected to enhance overland transport across the GCC and reinforce the UAE's role as a regional logistics hub.