Dubai: Dubai's warehouse market continues to record strong occupancy and demand levels, while attracting growing interest from international investment funds seeking to develop and acquire high-quality logistics assets, according to the latest Emirates NBD Real Estate Market Insights report.

The report showed that average warehouse rents across commercial, industrial and storage facilities in Dubai reached AED49 per square foot, representing a 2.3% quarterly increase and a 6.8% rise year-on-year.

The increase was supported by near-full occupancy rates across existing warehouse areas and a limited supply of high-quality Grade A warehousing space.

According to the report, the shortage of premium warehouse facilities continues to restrict options for companies seeking new logistics and storage locations.

Demand is expected to remain supported by continued growth in the logistics sector, manufacturing activity and efforts to localise supply chains across the region.

Investor interest growing

The report highlighted continued strong interest from institutions and investment funds in developing and acquiring high-quality warehouse assets.

It noted that several investment opportunities are currently undergoing due diligence processes.

According to the report, many of the interested investors have a global presence, which could help attract new companies to the region once projects are completed and operational.

This, in turn, is expected to strengthen the long-term demand base for logistics and warehousing assets in Dubai.

Tight supply supports rents

The report found that warehouse rentals continue to benefit from near-full occupancy levels in existing developments, helping maintain strong rental values despite a slowdown in new leasing activity.

Supply conditions remain tight: existing tenants are largely retaining their current facilities, while some companies are reassessing expansion plans amid evolving market conditions.

The report said the market continues to be characterised by limited availability and strong underlying demand for quality logistics space.