The UAE's industrial real estate market is booming driven by increasing rental rates and high demand in key areas like Dubai South, Jebel Ali Free Zone (JAFZA) and Abu Dhabi’s KEZAD Al Ma’Mourah, according to Cushman & Wakefield's latest report.

In Dubai, industrial and warehousing rental rates have risen by 13% year-on-year with notable increases of 25% in Dubai Investment Park and 21% in Dubai Industrial City. Abu Dhabi has seen a more moderate rise averaging 5% in areas like Mussafah.

The demand for warehousing and industrial spaces continues to outstrip supply largely fuelled by the growth of e-commerce, logistics and oil and gas sectors. This trend has led to a steady absorption rate and escalating rental prices.

Prathyusha Gurrapu, Head of Research at Cushman & Wakefield, highlighted that institutional investors are attracted to the industrial sector due to the potential for strong returns and stable demand for high-quality facilities.

The UAE's goal of becoming a leader in smart cities is transforming the industrial landscape. New developments increasingly incorporate technologies like automation and AI while there is growing demand for sustainable and energy-efficient buildings.

Gurrapu predicts sustained rental growth and heightened investor interest through 2025 fuelled by ongoing infrastructure developments like the Etihad Railway and Al Maktoum International Airport which will enhance logistics connectivity.