**ABU DHABI’S LOGISTICS AND INDUSTRIAL RENTS CLIMB 13% YoY**
Abu Dhabi’s industrial market continues to see strong demand, supported
by an improving business ecosystem and government incentives such as
rental rebates and subsidised utilities. Lower operating costs compared to
Dubai, availability of Grade A options across free zones and mainland
areas, and proximity to Dubai are attracting both spillover demand and
new international entrants. These factors reinforce Abu Dhabi’s position
as a key regional hub for logistics and light industry. Demand is broad-based, led by supply chain and logistics operators, alongside continued
strength from the oil and gas sector and growing activity in
manufacturing and SMEs focused on downstream and export-oriented
industries. Rents continue to rise across most districts, with the sharpest
YoY increases in KEZAD Al Ma’mourah (+27%), ICAD (+18%), Mussafah
(+12%), and ADAFZ (+9%). The market remains two-tiered, with premium
international-grade stock recording stronger gains than older industrial
areas. Despite several upcoming projects by KEZAD, MSM, Radius, and
Aldar, international-grade warehousing remains limited, concentrated in
KEZAD, Abu Dhabi Business Hub, Al Markaz, and ADAFZ. New projects
such as Khalifa Logistics Park and KEZAD Metal Parks are expected to
provide some relief, with benchmark rents averaging around AED 490 per
sqm per year.
**DEMAND CONTINUES TO FAR EXCEED SUPPLY**
Abu Dhabi’s logistics market is set for a supply surge between 2025 and
2028, mainly across KEZAD, Musaffah, and ADAFZ. The largest phase in
Q4 2025 will add over 335,000 sqm of speculative space through
projects such as Khalifa Logistics Park Musaffah 1, KEZAD Free Zone
Phase 3, and KEZAD Metal Park. While these will ease short-term
shortages, tight occupancy above 95% means the market will remain
undersupplied. A further 110,000 sqm is due in 2026 across Musaffah and
KEZAD Al Ma’mourah, with additional projects at ADAFZ through 2027–
2028 sustaining availability. The mix of speculative and build-to-suit
projects reflects Abu Dhabi’s strategy to boost capacity while meeting
specialised demand.