Rents for warehousing and industry in Dubai were up 13% year-on-year with Cushman and Wakefield Core stating that it is largely due to strong demand from major sectors. Dubai Investments Park and Dubai Industrial City account for the greatest increase at 25%, followed by 21% in Dubai Industrial City.
These are reasons tied to fast expansion in e-commerce and logistics, the expansion of oil and gas companies, and inflows of new businesses into the market. The report indicates imbalances between demand and supply were persistent throughout, as requirements to occupy warehousing and industrial space have often exceeded availability. This dynamic has led to steady absorption levels and increased rental prices.
On the other hand, the industrial market in Abu Dhabi records a slightly more modest increase on its rental rate that averages 5 percent year on year, most especially for areas like Mussafah and the Industrial City of Abu Dhabi. According to the report, the general demand for industrial facilities is strong in both emirates.
Institutional investors and non-industrial developers are finding greater appeal in the potential to lock in significant returns as well as being able to capitalize on increasing demand for high-quality warehousing. “Given that the sector continues to offer attractive yields and stable demand, more investors are looking to diversify their portfolios by investing in industrial assets,” said Prathyusha Gurrapu, Head of Research and Consultancy at Cushman and Wakefield Core.
The report will see further growth in the UAE’s industrial sector-in particular, as infrastructure projects such as the Etihad Railway and Al Maktoum International Airport enhance connectivity and logistics capabilities. To top it off, the shift toward sustainable and energy-efficient facilities is coming in full force, with the UAE long facilitating a vision of carbon footprint reduction and sustainable development.
Advanced automation and Internet of Things will only add to operational efficiencies in warehousing and logistics as the UAE’s industrial landscape is set for transformation. This evolution seems to call for sustained rental growth and increased investor interest through 2025 and beyond.