UAE Industrial and Logistics Sector Thrives with Strong Demand and Rising Rents

The United Arab Emirates' industrial and logistics market continues to demonstrate significant strength, driven by strong occupier demand and substantial government investment in infrastructure, according to CBRE Middle East's latest review. The country's strategic shift towards diversified logistics networks and enhanced trade connectivity has been accelerated by global supply chain disruptions.

Key Market Drivers

Several factors underpin the UAE's industrial market resilience:

• Supply Chain Diversification: Efforts to reduce reliance on single trade routes and enhance global supply chain flexibility.
• Manufacturing Localization: Government initiatives promoting domestic production and industrial growth.
• Transport Infrastructure: Major investments in rail, road, and port infrastructure, including expanded east coast port capacity in Fujairah and Khor Fakkan.
• High-Quality Warehousing Shortage: Persistent demand for modern logistics facilities outstripping available supply.

Government support measures, such as customs relief programmes, SME assistance, and manufacturing incentives, have also contributed to maintaining trade flows and operational efficiency across supply chains.

Investor Confidence and Market Performance

Investor appetite remains strong, evidenced by AED 48.5 billion in industrial investments announced during the "Make it in the Emirates 2026" initiative. Major logistics and warehousing developments are underway in key zones like KEZAD, Jafza, and National Industries Park.

Rental rates have seen notable increases across the emirates:

• Abu Dhabi: Average industrial rental rates rose by 6.0% year-on-year in Q3 2026. This growth is particularly pronounced in areas like KEZAD and ICAD, supported by sustained demand, limited high-quality stock, and increased foreign direct investment.
• Dubai: Experienced an even stronger performance, with average industrial rental rates climbing by 12.3% year-on-year. Areas such as Dubai Investments Park, Dubai Industrial City, National Industries Park, and Dubai South recorded significant rental growth due to demand for strategically located warehousing. The scarcity of Grade A space continues to empower landlords in core logistics hubs.

Matthew Green, Head of Research at CBRE MENA, noted that regional disruptions have accelerated investments and reshaped the UAE's logistics landscape, reinforcing its position as a leading trade, distribution, and industrial hub. He emphasised that current investments reflect long-term confidence in the UAE, extending beyond immediate geopolitical environments, and positioning the market for future economic growth and diversification.

"Many of the investments we are seeing today extend well beyond the current geopolitical environment and reflect the long-term confidence in the UAE." - Matthew Green, Head of Research, CBRE MENA