JLL says near-full occupancy in core industrial zones and stronger renewal activity are supporting the sector’s momentum, even as rental growth begins to moderate.
August 10, 2026 | Riya Malhotra | UAE | Real Estate | 2 Min Read
Image Courtesy: Economy Middle East
The UAE’s industrial real estate sector continued to show solid leasing momentum in Q2 2026, supported by strong tenant retention, healthy occupier demand and near-full occupancy in core industrial zones, according to JLL’s latest Industrial Market Dynamics report.
Dubai industrial rents increased 6.8 percent year-on-year in Q2 2026 to AED49 per square foot, while Abu Dhabi recorded a 5 percent annual rise to AED486 per square metre.
JLL said the rapid pace of rental growth has started to moderate, but market fundamentals remain strong across both emirates. Limited Grade A supply, high occupancy levels and continued demand from established operators are helping landlords maintain negotiating leverage.
Mouhammad Takieddin, CEO of Middle East and Africa at JLL, said the UAE’s industrial sector is moving into a phase of more mature and sustainable growth.
“The continued optimism in the UAE’s industrial sector reflects a market transitioning to mature, sustainable growth,” he said.
“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.”
In Dubai, annual rental contract registrations grew 4.3 percent in Q2, largely driven by an 11.2 percent year-on-year increase in renewal activity. JLL said this points to strong tenant retention and continued commitment from established industrial and logistics operators.
However, quarterly activity showed a more cautious leasing environment. Renewal registrations declined 10.2 percent quarter-on-quarter, while new contract registrations moderated by 3 percent, suggesting occupiers are taking a more measured approach to capacity planning while maintaining long-term confidence in the market.
In Abu Dhabi, the rental freeze initiative has constrained rental escalations. However, limited Grade A stock and strong occupancy levels have kept landlords in a relatively strong position. JLL said landlords are also offering lease term flexibility and selective rental concessions of up to 15 percent in some areas to support transaction activity amid regional conditions.
The report also highlighted the role of government-backed industrial and logistics initiatives in strengthening the sector’s medium-term outlook.
Strategic investments, including DP World’s planned east coast port and container terminal and the AED1 billion National Industrial Resilience Fund, are expected to support supply chain resilience, local manufacturing and logistics infrastructure. The fund aims to localise more than 5,000 critical products across priority sectors.
JLL said these initiatives, along with policies supporting Made-in-UAE products across retail and digital channels, are expected to drive manufacturing demand and reinforce the UAE’s position as a regional industrial and logistics hub.
The report comes as industrial and logistics real estate continues to gain prominence within the UAE’s wider property market, supported by e-commerce, manufacturing, trade infrastructure and the country’s long-term focus on supply chain resilience.
Source: JLL Industrial Market Dynamics, reported 5 August 2026
