Cushman & Wakefield's 2026 Waypoint report which surveyed 135 logistics and industrial markets globally, has one very clear finding: conditions are broadly tenant-favourable in 52% of markets, as uncertainty has slowed occupier decision-making and, in many regions, allowed vacancy to rise.
This is where the UAE diverges from the rest of the region, despite the ongoing geopolitical uncertainty; Industrial and logistics demand here has remained resilient, supported by structural trends that continue to reinforce the country's strategic importance.
As businesses prioritise supply chain resilience, diversify sourcing strategies and explore nearshoring opportunities, the UAE is increasingly being used as a regional manufacturing, distribution and re-export hub. At the same time, corporate consolidation, the push for greater local manufacturing capability and a heightened focus on food security are driving additional demand across industrial occupier segments. This is being accompanied by a continued flight to quality, with occupiers competing for modern, well-located facilities that support operational efficiency, automation and future growth. Rather than weakening the market, many of the forces reshaping global supply chains are strengthening the UAE's long-term position within them.
The explanation is a shift that was already under way before any single geopolitical event accelerated it. For years, the governing logic in supply chain planning was cost efficiency: find the cheapest combination of production, storage, and distribution and compress it further. That logic has not disappeared, but it has lost its primacy. Resilience sits at the top of the occupier brief now. Companies are willing to pay a premium for reliability, for proximity to alternative logistics corridors, and for the kind of regulatory and infrastructure environment that reduces the probability of disruption. The UAE has been building precisely that environment; the current period is functioning as a test it is passing.
What the Numbers Show
Against that global backdrop, the UAE's rental performance in 2025 tells a pointed story. Dubai and Abu Dhabi recorded year-on-year prime rental growth of around 8%, but this masks a more significant dynamic. Globally, rental growth is moderating from post-pandemic peaks, with 24% of the 135 tracked markets recording rent declines in 2025. In the UAE, demand-supply fundamentals remain tight, and Waypoint's forward-looking data shows that of the 135 markets surveyed, 55% expect rents to increase over the next three years, with supply constraints identified as the dominant factor. In a market where Grade A vacancy is significantly low, the UAE sits firmly in that group.
Both cities remain comfortably within the $5–10 per square foot annual rent band, which covers 54% of global markets, placing them in the competitive mid-tier alongside logistics hubs with much higher labour and energy costs. On wages, Waypoint identifies the UAE as having declined year-on-year, a function of ample labour supply that gives occupiers a structural cost advantage relative to Western European and North American alternatives. On electricity, the UAE sits well below the EMEA median; a meaningful differentiator at a time when Waypoint identifies energy cost and reliability as increasingly decisive factors in location decisions, particularly as automation and cold storage raise power consumption per square metre.
Quality Is Concentrating Demand
The flight to quality that has characterised occupier behaviour across the UAE's office market is now clearly visible in industrial. Tenants are migrating from older stock in Al Quoz, Ras Al Khor, and secondary locations in Mussafah toward modern facilities in Dubai South, National Industries Park, Dubai Industrial City, KEZAD, and ADAFZ. The specification gap between old and new stock has widened to the point where the two barely compete in the same pool. Clear heights, loading efficiency, yard depth, power capacity, and sustainability credentials are no longer differentiating features in Grade A stock; they are entry requirements. Many buildings that cannot meet these requirements are experiencing longer lease-up periods and elevated vacancy, while demand increasingly concentrates in assets that can.
Waypoint identifies manufacturing as a rising demand driver globally alongside e-commerce and logistics, and that finding resonates differently in the UAE context than it does in Europe or North America. Here, manufacturing demand is a policy priority. Operation 300bn, the National Industrial Resilience Fund, and Make it in the Emirates together represent a sustained commitment to deepening the country's production base. The consequence for the real estate market is that demand is becoming more diversified and more grounded. Food manufacturing, pharmaceuticals, defence, clean technology, and advanced industrial services are all expanding, generating requirements for more specialised facilities than the standard distribution warehouse; precisely the direction in which KEZAD, Dubai South, and the emerging build-to-suit pipeline are already moving.
What This Means for Occupiers and Investors
This matters for how the current period of uncertainty should be read by occupiers and investors. Globally, Waypoint shows that market conditions are expected to shift materially toward landlord-favourable by 2029, rising from 26% of markets today to 39%. In the UAE, that shift is arguably more advanced than the global survey captures; the conditions that will tighten markets elsewhere over the coming three years are already present here. Companies that treat the current period of caution as a reason to defer space decisions may find, as the cycle turns, that the assets they want are no longer available on the terms they expected.
For investors, the reading is equally direct. The Waypoint data points to a window. In most global markets, industrial assets are still broadly tenant-favourable, and refurbishment or repositioning of existing stock is identified as offering better risk-return characteristics than new development as construction costs rise. In the UAE, where institutional-grade, well-specified assets in established corridors are already commanding rental growth above older stock, that logic holds with additional force. The strongest industrial landlords are already behaving accordingly: investing in power capacity and ESG upgrades, retaining strong covenants with considered lease structures, and positioning assets to meet the next stage of demand rather than the last.
