Dubai’s industrial market begins to rebalance: what it means for occupiers
Demand rose to 12.3 million sq ft in H1 2026 as new supply gave occupiers real choice. Here is what the shift means if you are planning space.
By JP8 ·
For three years, businesses in Dubai took whatever warehouse space they could find. That is starting to change.
What the latest data says
Knight Frank’s review of the first half of 2026 found that new requirements for industrial and logistics space in Dubai reached 12.3 million sq ft, up from 11.5 million sq ft a year earlier. Around 6.6 million sq ft of new space is due to be completed in Dubai during 2026.
Rents are still rising, but more slowly in the most established locations. Grade A rents in Al Quoz averaged AED 90 per sq ft, up 6% year on year, while Dubai South saw the strongest growth, up 22% to AED 55 per sq ft. Knight Frank said newly completed buildings were “giving occupiers real choice for the first time in three years”.
CBRE, looking back at 2025 as a whole, put a 13% rise in Dubai warehouse rents down to a persistent shortage of high-specification space.
Three things to take from this
1. You have more room to negotiate than a year ago, in some places. New supply is concentrated in specific areas. Where it lands, you can compare options. In tight central locations, competition for space is still strong.
2. Specification matters more than ever. Much of the new demand is for larger, more efficient buildings: Knight Frank found that most requirements were for buildings above 10,000 sq ft. You can now hold out for the internal height, power, loading docks and energy performance your operation needs.
3. Plan early. A building designed for you, or a lease agreed on a building that is still under construction, takes time. Businesses that start the conversation twelve to eighteen months ahead get the widest choice of sites and terms.
The JP8 view
A more balanced market is good for occupiers and good for the industry. It rewards developers who build what businesses actually need, not generic space. That is how we work: we start with your requirement, then find the site and design the building around it.
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