cb.web.local

twitteryou tubefacebookfacebookacp

Logistics

The UAE’s industrial and logistics sector maintained strong momentum in 2025, with rents rising across all major submarkets, as tight supply conditions continued to shape market performance, according to Knight Frank’s latest UAE Industrial and Logistics Report.

High occupancy levels and sustained rental growth were recorded nationwide, supported by solid economic fundamentals and expanding activity from both domestic and overseas occupiers, particularly logistics operators from mainland China. Investor appetite for industrial and logistics assets also remained firm, underpinning transaction volumes across the sector.

Faisal Durrani, Partner and Head of Research, MENA at Knight Frank, said: “Investor appetite remains firm and competition for institutional-grade stock continues to strengthen, placing further downward pressure on prime yields towards sub-8% territory. This should support capital values, even as rental growth moderates in parts of the market.”

He added that while new supply due in 2026 could begin widening the rental performance gap between older and higher-specification facilities, rental levels are expected to remain firm overall. “We expect the demand drivers that have underpinned rental growth over the past few years to be sustained this year,” Durrani said.

Dubai rents continue upward trend

Dubai’s industrial and logistics rents climbed further in 2025, driven by strong occupier demand and rising land and construction costs.

Al Quoz remained the city’s most expensive industrial submarket, with rents reaching AED 100 per sq ft, supported by its central location. Dubai Industrial City recorded the strongest annual rental growth at 32%, with rents rising to AED 58 per sq ft amid constrained high-quality supply and growing manufacturing demand. Dubai South followed, with rents increasing 25% year-on-year to AED 45–55 per sq ft.

Grade-A assets in Jebel Ali Free Zone (JAFZA) also posted annual increases of around 22%, reaching AED 40–45 per sq ft. Meanwhile, more established inland areas such as National Industries Park and Dubai Investment Park saw rental stabilisation, as relatively higher vacancy levels tempered upward pressure.

Maxim Talmatchi, Partner and Head of Industrial and Logistics, Middle East, said JAFZA presents further upside potential. “With its proximity to Jebel Ali Port and appeal to multinational occupiers, we anticipate scope for further rental growth,” he said.

Knight Frank is tracking 6.6 million sq ftof new supply scheduled for delivery in 2026, with additional completions expected in 2027 and 2028. However, Talmatchi noted that near-term supply will remain relatively constrained in prime locations.

“We expect Dubai’s industrial and logistics supply pipeline between 2026 and 2029 to be relatively stable in the near term, before rising sharply towards the end of our forecast period,” he said. “This new supply should offer some relief to occupiers in the form of stabilisation, or softening in rents in some locations, which could begin towards the end of 2026.”

Demand in 2025 was led by logistics and manufacturing occupiers, each accounting for 21% of total requirements, followed by retailers and traders at 14% and technology-focused occupiers at 12%. Mid-sized warehouses between 10,000 and 50,000 sq ft accounted for the majority of demand in the second half of the year.

Abu Dhabi market anchored by diversification strategy

Abu Dhabi continued to advance its industrial diversification strategy, with 33% of the UAE’s US$5bn in awarded industrial contracts last year located in the emirate.

Rental growth was more measured than in Dubai, with performance largely driven by asset quality and proximity to key transport corridors. The Abu Dhabi Airports Free Zone recorded the highest average rents at AED 625 per sq m, followed by KEZAD Mussafah (ICAD) and Al Falah at AED 550 per sqm, and Mussafah at AED 500 per sqm.

Talmatchi said: “Market conditions in Abu Dhabi are likely to remain broadly stable through 2026, with demand anchored around the ICAD and KEZAD clusters. A disciplined approach to land release and development remains a key stabilising influence, restricting excess supply and limiting volatility in rental performance.”

Looking ahead, project completions in Abu Dhabi are expected to exceed US$1bn in Q1 2026, with another major peak forecast in 2029.

The growth trajectory is underpinned by the Abu Dhabi Industrial Strategy, which aims to more than double the emirate’s manufacturing sector to AED 172bn by 2031, with a focus on foreign direct investment and priority industries including chemicals, machinery, electronics and pharmaceuticals.

Durrani said the UAE’s industrial and logistics sector is entering a more mature phase. “Performance will increasingly be determined at the asset level. Location, specification, tenant quality and active management will matter more than scale alone,” he said. “The medium- to long-term outlook remains positive, with occupiers expected to continue gravitating towards high-specification and quality assets.”

On the sidelines of the World Governments Summit (WGS) 2026, Dubai’s Roads and Transport Authority (RTA) has signed a strategic partnership agreement with Elon Musk's The Boring Company to begin implementing an advanced passenger transport tunnel project in the emirate, branded Dubai Loop.

The project will deploy next-generation tunnelling and transport technologies aimed at transforming Dubai’s mobility ecosystem, improving transport efficiency and easing traffic flow in high-density urban areas.

The agreement was signed by Mattar Al Tayer, Director General and Chairman of the Board of Executive Directors of the RTA, and James Fitzgerald, Global Vice President of Business Development at The Boring Company, in the presence of senior officials from both organisations.

Under the agreement, the first phase of the project will involve the construction of a 6.4km pilot route comprising four stations, connecting the Dubai International Financial Centre with Dubai Mall. This initial phase will serve as the foundation for the full project, which is planned to extend to 22.2km with 19 stations, linking Dubai World Trade Centre and the financial district with Business Bay.

The Dubai Loop project will feature tunnels with a diameter of 3.6 metres, dedicated to vehicle transport. Advanced tunnelling technologies will be used to enable faster delivery, lower construction costs and reduced disruption to existing roads and utilities compared with conventional transport systems.

The cost of the first phase is estimated at approximately AED565mn, with an expected delivery period of around one year following the completion of design works and preparatory requirements. The total cost of the full route is estimated at around AED2bn, with an anticipated implementation period of approximately three years.

Al Tayer said the project represents a qualitative addition to Dubai’s transport ecosystem by enhancing integration between different modes of mobility and providing flexible, efficient first- and last-mile solutions. He noted that studies indicate the pilot route is expected to serve around 13,000 passengers per day, while the full network could accommodate approximately 30,000 passengers daily.

He added that the agreement aligns with the leadership’s directives to strengthen strategic partnerships with global innovators in advanced technologies, supporting Dubai’s ambition to remain among the world’s leading cities for future mobility solutions while improving quality of life and supporting rapid urban and economic growth.

Steve Davis, President of The Boring Company, said the company was proud to partner with the RTA, describing it as one of the world’s leading authorities in adopting innovative transport solutions. He said the collaboration aims to deliver safe, efficient and advanced tunnelling systems that support Dubai’s vision for sustainable and future-ready mobility.

The agreement follows a memorandum signed at WGS 2025, under which the RTA and The Boring Company conducted detailed feasibility and technical studies. As part of the study phase, the RTA provided geotechnical data, information on utilities and structures, environmental risk assessments, and relevant transport standards. The company, in turn, submitted technical and safety studies and development proposals in collaboration with international consultancies, under the supervision of financial and legal advisers, to identify the optimal partnership model for the project.

UAE-based fuel technology company Fuelre4m has announced new results showing its fuel treatment can deliver consistent fuel efficiency and emissions reductions across buses, trucks, and heavy equipment operating in real-world conditions.

Independent testing led by the National Technical University of Athens (NTUA), one of Europe’s leading engineering and applied sciences universities, evaluated Fuelre4m’s technology under tightly controlled laboratory conditions using a commercial diesel engine running on standard B10 biodiesel. The tests recorded 3.5–6.7% lower fuel consumption at identical engine speed and mechanical torque, alongside consistent efficiency improvements of 15–21% in the dominant mid-load operating range of approximately 1,400–1,550 RPM.

“The laboratory result establishes a conservative baseline under fixed torque, while real-world operation allows the same efficiency improvement to reduce torque demand, improve gear behaviour, and compound over time, resulting in larger total fuel savings across a complete duty cycle. Crucially, the only variable introduced during testing was the treatment of the fuel itself, with no changes to engine hardware, electronic calibration, operating limits, or fuel specification,” Fuelre4m said.

The NTUA laboratory findings are now being reinforced by repeatable real-world trials across UAE transport and industrial fleets. These include city and intercity buses operating on Dubai service corridors, mixed fleets incorporating VDL and King Long buses, and heavy trucks and off-highway equipment operating under high-load conditions. Once sufficient fuel contact time is achieved, measured fuel efficiency improvements frequently match or exceed laboratory results. Fixed-route trials on UAE buses show directional fuel consumption reductions of approximately 14–17%, with the strongest improvements consistently appearing in the mid-RPM “working bands” that dominate urban and intercity duty cycles.

Trials were conducted across mixed fleets spanning multiple manufacturers, engine sizes, and emission standards, confirming that the benefits are not limited to a single platform or technology generation. No adverse impacts were observed on drivability, engine temperatures, or aftertreatment systems. Quarry and heavy-equipment trials, including large off-highway haul trucks, demonstrated reduced fuel consumed per unit of work, with several recording double-digit efficiency improvements while maintaining or increasing productivity.

Commenting on the findings, George Papalambrou, Associate Professor of Control Systems at NTUA, who oversaw the independent testing, said, “We were genuinely surprised by the consistency and magnitude of the mid-range efficiency improvements. The results were not isolated to a single operating point and were observed under multiple control regimes. This is a positive development not just for one sector, but potentially for all industries relying on internal combustion engines, including shipping and maritime transport.”

Rob Mortimer, CEO of Fuelre4m, said, “For decades, the industry has optimised engines around the assumption that fuel behaviour is fixed. These results show that when you improve how fuel behaves, efficiency and emissions improve immediately, using the engines already operating across the UAE today.”

Fuelre4m is expanding controlled in-service validation programmes across the UAE in collaboration with fleet operators, government entities, and industrial partners. These programmes will focus on high-utilisation routes, long-duration performance validation, and quantified emissions reduction under representative operating conditions. Further independent testing using fully instrumented dynamometer facilities is also planned to extend validation into transient operation and regulatory-grade certification environments.

Parsons Corporation has officially opened its new regional office in Doha, marking a significant expansion of the company’s footprint in Qatar and reinforcing its long-term commitment to supporting national development priorities.

The office was inaugurated by Carey Smith, chair, president, and chief executive officer of Parsons Corporation. The event was attended by senior representatives from the U.S. Embassy Doha, Qatar’s Public Works Authority, Qatari Diar, the American Chamber of Commerce Qatar, alongside Parsons’ regional leadership team and employees.

Located in Al Emadi Financial Square, the new Doha office will serve as a regional design hub for Parsons’ expanding portfolio of infrastructure design, urban development, mobility and programme management projects across Qatar. The facility is intended to enable closer collaboration with clients, project teams and stakeholders as major infrastructure and development programmes across the country continue to progress.

“Parsons’ growth in Qatar underscores the company’s outstanding reputation in the Middle East, our position as a trusted partner to our customers, and our competitive advantage in the region,” said Smith. “For more than two decades, we’ve proudly partnered with important customers across Qatar to deliver on some of the nation’s most prominent and vital infrastructure projects. Expanding our physical presence in Doha strengthens our ability to deliver complex, mission-critical programmes with speed and agility. This expansion strengthens our regional presence and global capabilities, and highlights the important role our thriving Middle East portfolio plays in the company’s continued global success.”

Parsons has maintained a presence in the Middle East since the 1950s and brings extensive regional expertise across project and programme management, urban development, transportation and master planning. Its capabilities span rail and metro systems, aviation, roads and ports, smart mobility solutions, asset management and large-scale urban development programmes.

In Qatar, Parsons has played a key role in delivering sustainable infrastructure and smart city initiatives aligned with the country’s long-term vision for growth. The company has contributed to several landmark national projects, including the FIFA World Cup Qatar 2022, Seef Lusail Development, Al Khor Expressway, Lusail Light Rail Transit, Doha Metro networks and the expansion of Hamad International Airport.

The new Doha office builds on Parsons’ more than 25-year track record in Qatar, during which the company has supported transportation planning, expressway programmes, major roadway and drainage systems, as well as programme, construction management and advisory services for national infrastructure initiatives.

The office will host multidisciplinary teams supporting a pipeline of ongoing and upcoming projects across Qatar, positioning Parsons to respond efficiently to future opportunities while continuing to deliver complex infrastructure programmes that support economic growth and urban development in the country.

Saudi Arabia has claimed the top spot globally in the Road Network Connectivity Index, according to a report by the World Competitiveness Forum. The Kingdom also ranked fourth among G20 nations in the Road Infrastructure Quality Index, highlighting its ongoing investment and development in the road sector.

For a country of Saudi Arabia’s size, these rankings underscore its growing international prominence and the strategic importance of its transport network. The Kingdom’s road system stretches over 73,000 km—almost double the circumference of the Earth—providing critical domestic connectivity while linking Saudi Arabia to eight neighbouring countries, including GCC states, Jordan, Iraq, and Yemen. The network supports key sectors such as Hajj and Umrah, tourism, trade, and broader logistics, positioning the Kingdom as a regional hub.

A spokesman for the Roads General Authority (RGA) attributed the achievements to the adoption of global best practices and safety-focused regulations. “We have launched the Road Code as a unified technical reference for all entities responsible for roads, guaranteeing the highest standards of planning, design, implementation and maintenance,” he said.

The authority has also introduced the Road Right-of-Way Permits Regulation, which organises activities within road corridors, enhances safety, and improves user experience, the spokesman added.

The RGA continues to roll out major projects and initiatives under the Roads Sector Program to strengthen infrastructure and achieve strategic targets. These include aiming for sixth place globally in the Road Quality Index by 2030, reducing road fatalities to fewer than five deaths per 100,000 people, implementing road safety features across the network in line with the International Road Assessment Programme (IRAP), and maintaining advanced service levels to meet growing traffic demands.

Saudi Arabia’s recognition in these international rankings reflects its commitment to combining world-class infrastructure with enhanced safety standards, while supporting economic growth and regional connectivity. The Kingdom’s road network is increasingly seen not just as a transport system, but as a driver of development and a vital component of national strategic planning.

More Articles …