Dubai Warehouse Tenants Prioritise Renewals as Regional Conflict Drives Cautious Leasing

Dubai warehouse occupiers are choosing to stay in their current facilities rather than take on new leases amid regional trade uncertainty, according to a report by EnterpriseAM. Data from Cavendish Maxwell reveals that warehouse lease renewals rose 21.6% to reach a record high in the first half of 2026. During the same period, new warehouse contracts fell 51.8% year-on-year, while average rents increased by 12.4%.

Overall industrial and logistics requirements across the UAE reached 12.3 million square feet as of August 2026, marking a 7% year-on-year increase. JLL MEA Head of Industrial Advisory Abhishek Mittal stated that demand has not disappeared but rather redistributed, with companies adopting pragmatic strategies such as routing overflow through third-party logistics (3PL) providers and cargo aggregators. In addition, some manufacturers are increasing local inventory holdings and near-sourcing inputs to guard against logistics disruptions.

CBRE MENA Associate Director Ana Worboys noted that high relocation costs—including fit-outs, racking, and operational downtime—make lease extensions a more cost-effective choice than relocating, even with rising rental rates. CBRE noted that rental growth in Dubai has moderated to around 12.3% after previously running near 20% annually.

Meanwhile, supply dynamics differ across the Emirates. More than 10 million square feet of warehouse space came onto the market across the Northern Emirates in the first half of 2026, including 5.2 million square feet in Umm Al Quwain, where rents dropped 18.5% year-on-year. However, Cavendish Maxwell Research Manager Ali Siddiqui indicated that Dubai remains difficult to substitute due to its port access at Jebel Ali, airport proximity, and established free zone logistics infrastructure.