UAE Warehouse Rents Expected to Rise by Up to 10%

Warehouse rents in the United Arab Emirates (UAE) are projected to increase by up to 10% in 2025, driven by rising demand from e-commerce and multinational corporations, low vacancy rates, and a shortage of industrial land. Notably, Dubai’s industrial and logistics sectors are experiencing significant rent hikes.

E-Commerce and Multinational Corporations Drive Logistics Demand

Kunal Lahori, Director of Manrre REIT Logistics Fund—an institution specializing in logistics and industrial assets across the UAE and the Gulf Cooperation Council (GCC)—highlighted the market’s growth dynamics.

“Warehouse rents increased by 25-30% last year, and we anticipate a further 5-10% rise this year,” Lahori told industry sources.

The UAE market is witnessing heightened interest from local and international logistics firms, manufacturing companies, and e-commerce giants. The country’s e-commerce sector, growing at an annual rate of 20%, continues to outpace global trends.

Lahori emphasized that demand for warehouse space remains strong, but supply shortages persist due to a lack of industrial land. “We are experiencing shortages across all industrial zones. The demand for Grade A assets is particularly high, with vacancy rates as low as 3%,” he noted.

“Jebel Ali, in particular, holds vast growth potential, as there is a requirement for 40 million square feet of warehouse space,” Lahori added.

Significant Rent Increases in Dubai’s Industrial and Logistics Sectors

A 2024 report by Knight Frank underscored the shortage of high-quality industrial and logistics warehouse space in the UAE, particularly in Dubai. The report highlighted notable rent increases across key industrial zones:

• Al Quoz (Grade A): Rents surged by 45% to AED 72-100 per sq. ft.
• Dubai Investments Park (DIP): Rents rose by 48% to AED 50-70 per sq. ft.
• Dubai Industrial City and Dubai South: Growth of 38% and 26%, respectively.

Lahori anticipates some relief in supply over the next 12 to 18 months. However, given the continued demand for premium assets and the expansion of e-commerce, warehouse rents are still expected to rise by approximately 10%.

Growing Interest from International Investors

According to Knight Frank, international investors from the U.S., China, and Europe are increasingly drawn to Dubai’s industrial sector, attracted by returns of approximately 8.25%.

Lahori identified Jebel Ali Free Zone (JAFZA), Dubai Investments Park (DIP), and the National Industries Park as key locations for future warehouse investments, reflecting strong market confidence in the sector’s continued expansion.