Industrial property rents in Dubai rose 12.8% during the first quarter

JLL Real Estate Consulting and Investments, listed on the New York Stock Exchange, issued its new report on the dynamics of the real estate market performance in the UAE during the first quarter of 2026.

The company stated, in its report, that the residential units market has proven its resilience following the recorded decline in the volume of transactions at the beginning of the crisis, and the industrial real estate sector has also proven that it is based on strong market foundations and is less sensitive to temporary disturbances.

The JLL report revealed strong growth in the industrial real estate sector, saying: “The notable double-digit growth in rental prices and positive trends in contract renewals during the first quarter of 2026 demonstrate the latent demand for warehouses and logistics services, even in light of the current geopolitical situation.”

He added: “The industrial real estate market in Dubai recorded a growth in rental prices of 12.8%, compared to last year until the first quarter of 2026, while the Abu Dhabi market achieved a growth of 18.2%, which reflects the continued demand from tenants and limited supply.

The report indicated an increase in the number of lease contracts registered in Dubai by 3.4% in the first quarter, which reflects the confidence of tenants. It is expected that the demand for industrial spaces that serve basic commodity sectors, such as food distribution, medicines, medical supplies, and vital goods, will maintain its continued strength.

According to the report, a clear difference was observed in the Dubai real estate market between the “off-plan” real estate market and the “secondary market,” as off-plan real estate sales witnessed an increase of 9.5%, which reflects relative flexibility, while real estate sales in the secondary market decreased by 8.2%, and in Abu Dhabi, the launch of new projects contributed to increasing the volume of transactions to more than double compared to the first quarter of 2025.

The report expected about 59,000 residential units from the expected supply to enter the market in Abu Dhabi and Dubai during the remainder of 2026, pointing out that expectations for 2027 indicate that about 92,000 new units are expected to enter the market.

He added: “The government’s economic stimulus package, worth one billion dirhams, supports liquidity in the hotel market, by postponing a number of fees and financial obligations. Hotels have also adopted strategies that include exploiting closure periods to accelerate renovation processes, in addition to providing competitive local accommodation offers targeting local demand. These strategies enable operators to come up with higher-quality assets and a more balanced demand structure as the pace of tourism sector recovery progresses,” stressing that the sector is in a strong position that qualifies it to recover with the return of travel activity, supported by its strong foundations and continued investor confidence.

Taimur Khan, head of research for the Middle East and Africa region at JLL, said: “The first quarter of the year witnessed a clear variation in the performance of the real estate market, as the hospitality sector faced strong challenges, while the residential units, industrial real estate and logistics facilities sectors maintained good levels of flexibility.” He added: “Government incentives and flexible strategies contributed to reducing pressures in the short term, while the strength of market fundamentals and investor confidence supported the stability of the economy in general, and its readiness to achieve a strong recovery as conditions return to normal.” Its nature.