Dubai's H1 2024 Warehousing Demand Surges Due to Manufacturing and Construction Growth

Rising demand from manufacturing and construction, along with a lack of supply, is pushing up warehouse rental prices in Dubai in the first half of 2024.

A recent report for the first half of 2024 from Knight Frank, a global property consultant, shows that rent prices in Dubai's industrial and logistics areas are rising fast. Specifically, Jebel Ali Industrial saw a 38.5% increase in Grade B rent prices.

The average cost of renting space in Al Quoz has doubled since the second quarter of 2021. Now, in some cases, it can be as high as $2.45 (AED 9.29) for every square meter.

Knight Frank also noted that the need for industrial and logistics spaces has gone up by 185% in the first half of 2024 when comparing it to the first half of 2023.

The main industries in 2024 that need more space are manufacturing (11.7%), construction (11.1%), and logistics (10.2%).

During H1 2024, Knight Frank recorded almost 1,672,254 square meters of new requirements for industrial and logistics assets, representing a 185% increase in demand compared to H1 2023.

Aliaa El Esaaki also mentioned that only about 61,316 square meters of new supply is expected to be delivered this year. The significant difference between demand and supply becomes evident when taking into account that the total amount of new requirements during the first half of the year alone reached 1.6 million square meters.

New warehousing spaces are being added across several areas, with 33,445 m2 in JAFZA and 27,870 m2 in Dubai Industrial City. In 2025, an additional 120,773 m2 in places like National Industries Park, Dubai South, and Dubai Investment Park 2 are also expected.

Due to rising rents and a lack of warehousing in Dubai, demand has increased in nearby areas. For example, Khalifa Economic Zones Abu Dhabi (KEZAD), which includes 12 economic zones and a large part of the UAE’s industrial area, is boosting its warehousing capacity by 43% with 250,000 sqm of new space. As for costs, warehouse rents are between AED 320-450 per square meter, while cold storage spaces cost between AED 350-550 per square meter.