Dubai’s warehousing sector has secured a total rental value of AED1.8 billion ($490 million) during the first half of 2026, up 10% over the same period last year, according to leading real estate advisory and property consultancy, Cavendish Maxwell. 

The average cost of renting a warehouse rose almost 12.5% year-on-year, it stated. 

Cavendish Maxwell’s latest warehouse and retail performance report reveals that around 10,000 warehouse leases were signed in H1 this year. 

Renewals rose 22% year-on-year to reach a new half-year record as many tenants choose to stay in existing premises rather than moving to ones. Some 8,200 renewals were signed from January to June, said the industry expert. 

Overall, leasing contracts were down 4.5% against H1 2025, with new contracts falling by more than 50%, it added. 

Smaller premises dominate rental activity

Vidhi Shah, the Director and Head of Commercial Valuation at Cavendish Maxwell, said: "The sharp contraction in new contracts, alongside record renewal levels points to an occupier market characterised by strong retention but a reduced appetite for new space commitments."

"This pattern is consistent with a more cautious business environment, where occupiers are favouring existing locations over expansion into additional warehouse space amid higher costs and greater market uncertainty," he noted.

Nearly 70% of warehouse leases in H1 2026 were for premises of less than 5,000 sq ft, and more than half were for warehouses between 2,000 sq ft and 5,000 sq ft in size, reinforcing high levels of demand for smaller premises. 

Larger spaces – those over 10,000 sq ft – also continued to secure a meaningful market share, accounting for almost 20% of leases in the first half of the year. The least popular size was 5,000 sq ft to 10,000 sq ft, at around 12%. 

Rental rate trends in H1

Warehouse rental rates rose almost 12.5% year-on-year increase in H1 2026, with all locations monitored by Cavendish Maxwell securing positive growth. The highest growth was in Jebel Ali (15.5%), followed by Dubai Industrial City (15%) and Ras Al Khor (just under 14%). 

Performance was more mixed on a quarterly basis, with modest increases in some areas and slight declines in others, suggesting that the pace of rental rate growth is beginning to moderate in some areas. 

Vidhi Shah pointed out that the second half of the year was likely to see a more selective market rather than a broad-based slowdown. 

"Well-located warehouse facilities should continue to attract occupier interest, while new leasing and expansion decisions are likely to take longer as businesses remain cautious about costs and regional conditions," she added.-TradeArabia News Service