The UAE Real Estate Market - A Year in Review 2023
Economic resilience and robust demand propel the UAE’s real estate performance in 2023
- Faraz Ahmed
- Muhammad Aijaz
- Sara Alameddine
In line with its economic diversification efforts, the UAE’s industrial sector is witnessing strong demand from international occupiers who seek superior quality of their industrial facilities and proximity to the air and sea ports.
While established onshore areas like Al Quoz, Al Qusais, and Ras Al Khor in Dubai continued to dominate the market, remaining popular and commanding higher rents and occupancy rates, new industrial areas such as Dubai Investment Park (DIP) and Dubai Industrial City (DIC) are rapidly gaining prominence. Warehouse rentals saw an increase across most of the industrial areas in Q4 2023 with JAFZA, Jebel Ali Industrial Area, and DIC standing out with significant Y-o-Y increases of 20%, 19%, and 17%, respectively. The robust occupier market is being fuelled by various government initiatives which support the growth of the logistics and e-commerce sectors.
In Abu Dhabi, majority of the stock is situated outside the city centre in areas such as Musaffah, KEZAD, and Abu Dhabi Industrial City. Driven by a surge in demand, warehouse rents rose in Musaffah and Markaz by 32%and 12% Y-o-Y, respectively.
The outlook for the industrial market remains optimistic, with steady leasing activity expected to persist throughout 2024. Key drivers of this activity are anticipated to include e-commerce, 3PL players, the oil and gas industry, and the manufacturing sector.
Read our latest UAE Real Estate Market report to find out more.
