Dubai CommerCity launches $490m second phase as occupancy nears 96%

Summary

• Dubai CommerCity unveiled a $490 million Phase Two expansion of its e-commerce free zone.
• Occupancy across office, logistics and retail space is approaching 96 per cent.
• The build-out signals Dubai's bet on digital commerce as a long-term growth engine.

The latest

An AED1.8 billion ($490 million) second phase will add more than 91,000 square metres of office, logistics and retail space at Dubai CommerCity, the free zone jointly developed by the Dubai Integrated Economic Zones Authority and Wasl. The decision follows occupancy climbing to nearly 96 per cent. Deliveries are phased from the first quarter of 2027 to the fourth quarter of 2028.

Details

• The headline number: The expansion is valued at AED1.8 billion, equivalent to $490 million, according to Gulf Daily News and TradeArabia. It covers more than 91,000 square metres of new built space, spread across the zone's three existing districts rather than a separate site, extending a development that is already close to full.
• Where the space goes: The new floor area is divided between the Business Cluster, the Logistics Cluster and the Social Cluster. The business component alone includes six new office buildings, the largest single block of added capacity disclosed in the plan.
• The Hive: A new logistics facility named The Hive will span 5,600 square metres and house 181 flexible units. It is designed with climate-controlled fulfilment areas and digitally managed loading zones, targeting operators who need temperature-sensitive storage and automated dispatch rather than conventional warehousing.
• The occupancy trigger: Occupancy across office, logistics and retail space is approaching 96 per cent, the level cited as justification for expanding now. At that rate the zone has limited room to absorb new tenants, making added capacity a condition for further leasing growth.
• The timeline: Delivery runs in phases from the first quarter of 2027 through the fourth quarter of 2028, a roughly two-year build-out. No individual completion dates were given for The Hive or the six office buildings within that window.
• The official framing: Sheikh Ahmed bin Saeed Al Maktoum, chairman of DIEZ, said Phase Two "reflects the growing investor confidence in Dubai's economic ecosystem and its ability to attract high-quality investments," adding that Dubai continues to grow despite global economic changes.
• The ownership structure: The project is jointly developed by DIEZ, the government authority overseeing Dubai's integrated economic zones, and Wasl, the state-linked property developer. The announcement did not break down how the AED1.8 billion is financed between the two partners.
• The positioning: Dubai CommerCity describes itself as the region's first free zone dedicated specifically to digital commerce, combining office, fulfilment and retail functions on one site rather than separating warehousing from corporate operations.

Background

Free zones are the core instrument of Dubai's foreign-investment strategy, offering full foreign ownership and customs advantages. DIEZ oversees a group of them; CommerCity is the one built around e-commerce, pairing corporate offices with fulfilment infrastructure instead of leasing generic warehouse stock.

Between the lines

The sequencing matters: expansion was announced at 96 per cent occupancy, not ahead of demand, which makes this a response to absorbed capacity rather than speculative building. The emphasis on climate-controlled fulfilment and digitally managed loading in The Hive points at tenants moving higher-value or perishable goods. Delivery stretching to late 2028 means the capacity answers demand expected years out, not current waiting lists.

What's next

The first deliveries are due in the first quarter of 2027. Watch for leasing announcements on the six Business Cluster buildings and The Hive's 181 units, and for whether occupancy holds near 96 per cent as space comes online.

Source: Gulf Daily News / TradeArabia