The stock of under construction warehouses stock in Dubai’s industrial market stands at 1.56 million square feet, according to Knight Frank’s latest report, Dubai & Abu Dhabi Industrial Markets Review for Q3 of 2023. As per Knight Frank, demand is outstripping supply and occupiers are faced with the prospect of leasing more secondary stock, while others are gravitating towards sites in Abu Dhabi, which is benefiting from spillover demand. Indeed, across the six primary submarkets tracked by Knight Frank in Abu Dhabi, rents have remained unchanged thus far during H2. High occupancy levels in KEZAD and Masdar have helped to sustain rents. Knight Frank report a rise in demand in ADAFZ, where space is available for AED 600 per square metre. To cater to burgeoning demand, ADAFZ is developing a new masterplan, Al Falah Free Zone, spanning over 6 sq. km., which will include bonded and non-bonded zones. The report also highlights that while warehouse lease rates in Dubai have remained stable thus far during H2 2023, Grade B rents in JAFZA (AED 25 per square foot) and Dubai Industrial City (AED 32 per square foot) have risen by 25-19 per cent as compared to the same period last year. Similarly, Al Quoz (Grade A), has seen rents climb to 52 per cent above January 2020 levels, marking it as the most expensive warehouse leasing location in Dubai.
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