Dubai’s industrial and logistics occupiers asked for more space in the first half of 2026 even as conflict-linked trade disruption made location and building quality more important.

Knight Frank’s H1 review recorded new requirements of 12.3 million square feet, up from 11.5 million square feet in the same period of 2025.

The demand shift gives Dubai’s industrial market a capacity story rather than a simple rent story.

Newly completed properties expanded occupier choice, while companies reassessed costs, supply chains and expansion plans after regional conflict slowed decision-making from March.

Manufacturing And Logistics Drive Requirements

Knight Frank reported in its own H1 review that manufacturing and industrial occupiers made up 35.1 percent of first-half Dubai requirements, while logistics companies made up 15.5 percent.

Facility size moved upward at the same time.

Knight Frank reported the 10,001-to-50,000-square-foot band at 35.5 percent of requirements, the 50,001-to-100,000-square-foot band at 32.2 percent, and demand above 100,000 square feet at 27 percent, compared with 7.8 percent in the second half of 2025.

Strait Of Hormuz Disruption Changes Routing Choices

Knight Frank’s MENA research head, Faisal Durrani, linked Strait of Hormuz shipping disruption to heavier interest in alternative logistics and maritime options.

The same section named DP World and the Port of Fujairah’s plan for two deepwater ports on the UAE’s east coast.

The routing section records how occupiers adjusted freight paths alongside warehouse planning.

Some companies increased use of Fujairah, Khor Fakkan and Salalah before moving goods by road to Dubai and Abu Dhabi, while airfreight demand rose among firms handling high-value products or goods with tight delivery windows.

Dubai Rents Split By Location And Building Quality

Rent data no longer moved evenly across districts.

Knight Frank’s rent section showed average Grade A rents in Al Quoz at AED90 per square foot after a 6 percent annual increase, Dubai South at AED55 per square foot after 22 percent yearly growth, and Dubai Industrial City up 16 percent.

2026 Pipeline Leaves Tenants With More Choice

Dubai’s completion pipeline remains concentrated in 2026, while deliveries are expected to moderate during 2027 and 2028.

Longer construction periods and substantial preleasing are expected to limit immediately available Grade A space for prospective tenants.

For Maxim Talmatchi, Knight Frank’s Middle East industrial and logistics head, the market was moving away from the demand-supply imbalance that had shaped the sector since 2021.

Newly finished properties were broadening occupier options after three tight years, and more sellers were bringing assets to market.

The report does not identify tenant-level leasing commitments, so the 12.3 million square feet figure remains a requirement measure rather than a signed-lease total.