Dubai, UAE – Solid market fundamentals and healthy occupier demand are strengthening the long-term prospects of the UAE’s industrial sector, according to JLL’s latest Industrial Market Dynamics report. While the rapid pace of rental growth has begun to moderate, Dubai and Abu Dhabi have continued to maintain leasing momentum in Q2 2026.
In addition, strategic government initiatives focused on supply chain resilience and domestic manufacturing are enhancing the UAE’s competitive positioning and boosting investor confidence in the sector. Despite regional uncertainties and ongoing supply chain disruptions, the report outlines a favourable medium-term outlook.
Mouhammad Takieddin, CEO of Middle East and Africa at JLL, said: “The continued optimism in the UAE’s industrial sector reflects a market transitioning to mature, sustainable growth. With near-full occupancy in core industrial zones, the anticipated delivery of much-needed Grade A supply, and a strategic national push toward domestic manufacturing, the sector is well positioned to capitalise on these critical investments and solidify the UAE’s status as a premier, future-ready global logistics hub.”
Industrial rental rates in both Dubai and Abu Dhabi sustained positive growth momentum in Q2. Dubai rents increased 6.8% year-on-year to AED 49 per sq. ft and 2.3% quarter-on-quarter, while Abu Dhabi recorded a 5.0% annual rise to AED 486 per sq. m. The ‘rental freeze’ initiative in Abu Dhabi has constrained rental escalations, but with limited Grade A supply and strong occupancy levels, landlords are maintaining negotiating leverage while offering lease term flexibility and selective rental concessions of up to 15% in select areas to support transaction activity amid regional conditions.
Sustained resilience was also evidenced by a 4.3% growth in annual rental contract registrations in Dubai during Q2, driven largely by an 11.2% year-on-year surge in renewal activity, indicating strong tenant retention and ongoing commitment from established operators. Although on a quarterly basis, renewal registrations declined 10.2% and new contract registrations moderated 3.0% quarter-on-quarter, the tempered pace suggests businesses are adopting a prudent approach to capacity planning while maintaining long-term confidence in Dubai’s industrial sector.
Looking ahead, government initiatives aimed at enhancing supply chain resilience are expected to accelerate the UAE’s industrial sector transformation. Strategic investments, including DP World’s new east coast port and container terminal and the AED 1 billion National Industrial Resilience Fund, which aims to localise over 5,000 critical products across priority sectors, reinforce the UAE’s competitive positioning as a leading industrial and logistics hub.
Supported by policies that ensure ‘Made-in-UAE’ products gain prominence across retail and digital channels, these coordinated efforts will drive local manufacturing demand, strengthen logistics infrastructure, and position the UAE’s industrial sector favourably for sustained growth well beyond current regional uncertainties.
About JLL MEA
Across the Middle East and Africa (MEA) JLL is a leading player in the real estate and hospitality services markets. The firm has worked in 35 countries across the region and employs over 1800 internationally qualified professionals across its offices in Dubai, Abu Dhabi, Riyadh, Jeddah, Al Khobar, Cairo, Casablanca, Cape Town, Johannesburg and Nairobi.
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