The UAE’s industrial real estate market is poised for another robust year in 2026, with rental levels expected to remain firm and potentially see marginal increases, particularly for grade-A properties. Knight Frank’s latest market review highlights the sector’s resilience and ongoing demand.
Dubai Industrial City exemplifies this trend, recording an impressive 32% year-on-year rental growth, reaching AED58 per square foot in 2025. This surge is primarily attributed to large-scale manufacturing demand and constrained high-quality supply.
According to market experts, approximately 6.6 million square feet of new industrial stock is anticipated to enter the market in 2026. These new developments are expected to be strategically positioned across different quality tiers, from Q1 to Q3 properties.
The market projection extends beyond 2026, with potential supply additions of 2.2 million square feet in 2027 and up to 5.9 million square feet in 2028. This gradual expansion is expected to help balance market dynamics while maintaining rental pressure.
Rental trends in 2025 were particularly noteworthy, with industrial and logistics sectors experiencing significant growth. Transactions in the second half of 2025 showed strong performance, especially in mid-sized warehouse spaces ranging from 10,000 to 50,000 square feet.
The UAE’s strategic focus on industrial development is clear, with plans to diversify and strengthen the sector’s contribution to the national economy. By 2031, the industrial sector is projected to contribute approximately AED172 billion ($46.8 billion) to the country’s economic landscape.
As the UAE continues to position itself as a global logistics and manufacturing hub, the industrial real estate market remains a key indicator of economic dynamism and strategic growth.
