Dubai CommerCity adds 91,000 sq m in an AED 1.8 billion second phase

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Dubai CommerCity, the free zone built for online retailers and the companies that serve them, is to grow by more than 91,000 square metres. The second phase was announced on Sunday 4 October 2026 in a statement from the Dubai Media Office carried by the WAM news agency, and reported by Gulf Business on 6 October. The investment is put at more than AED 1.8 billion, and the new space is scheduled to arrive in stages between the first quarter of 2027 and the fourth quarter of 2028.

The reason given is simple: the zone is almost full. According to the WAM text, occupancy across its office, logistics and retail space stands at nearly 96 per cent. For brokers who place commercial tenants, and for businesses looking for an address inside a free zone, that leaves very little to choose from today, and the first new buildings are due in the first quarter of 2027.

Dubai Media Office statement of 4 October 2026, as carried by WAM and reported by Gulf Business on 6 October 2026.

What was announced

Dubai CommerCity is a joint venture between the Dubai Integrated Economic Zones Authority, known as DIEZ, and Wasl Group. Gulf Business and Gulf News both describe it as the first free zone in the region dedicated exclusively to digital commerce. Gulf News, reporting on 4 October, adds that it offers offices, warehouses, flexible space and digital trade and logistics services to digital commerce companies setting up or expanding in the region.

The zone is organised in three districts, which it calls clusters: Business, Logistics and Social. The second phase touches all three. The Business Cluster receives six new office buildings. The Logistics Cluster receives a new facility named The Hive. The Social Cluster receives retail outlets, restaurants, cafes and services for the people who work there.

Three officials are named in the announcement. Sheikh Ahmed bin Saeed Al Maktoum, Chairman of DIEZ, said the expansion reflects growing investor confidence in Dubai and is in line with the Dubai Economic Agenda, known as D33, according to Gulf Business and Gulf News. Dr Mohammed Al Zarooni, Executive Chairman of DIEZ and Chairman of the Dubai CommerCity board, described the second phase as a strategic step for Dubai's position in digital commerce, according to the WAM text published by Gulf Today. Hesham Abdulla Al Qassim, Vice Chairman and Group Chief Executive of Wasl Group, pointed to the strength of the partnership between Wasl and DIEZ, the same text reports.

Six office buildings, three ways to take space

Most of the new area is offices. The WAM text gives about 86,000 square metres for the Business and Social clusters together, out of a total of more than 91,000. The six new buildings of the Business Cluster will be offered in three forms, and the difference between them matters to anyone advising a tenant.

A shell-and-core office is handed over as a finished structure with its common areas and building services, and an empty floor. The tenant designs and pays for the interior, which takes time and capital but gives full control over the layout. A fully fitted office arrives with its interior already built, so the tenant brings furniture and staff. A plug-and-play office goes one step further: it is ready to work in from the first day, which suits a company that is new to the market or does not yet know how large its team will be.

Offering all three in the same buildings lets the zone serve very different occupiers side by side: an established retailer taking whole floors for a regional headquarters, and a start-up that needs a handful of desks while it tests the market. It also gives a growing company a way to stay in the same cluster as its needs change, moving from a ready-made suite to a larger floor of its own.

The figures in the announcement are rounded, and they should be read that way. The total is given as "more than" 91,000 square metres and the two larger clusters as "about" 86,000, so the parts do not add up to the last square metre: 86,000 plus the 5,600 of The Hive comes to 91,600. The National and Gulf News, both reporting on 4 October, also describe the 91,000 square metres as office space, while the WAM text spreads it across the three clusters. The breakdown in the table follows the WAM text.

The Hive: small units, stacked

The logistics part of the plan is the smallest in area and the most unusual in design. The Hive is described as a vertical facility of 5,600 square metres holding 181 flexible units, with the smallest starting from 5 square metres. Gulf News reports that the vertical layout is meant as an alternative logistics model that makes the most of the available space for digital commerce.

Dividing the gross area by the number of units gives roughly 31 square metres per unit. That is only an average of the whole building, corridors and loading areas included, and not a unit size published by the zone. It does show the scale intended: these are storage and fulfilment rooms for small online sellers, a long way from the large single-tenant warehouse.

According to Gulf Business, The Hive will have fulfilment areas that are climate-controlled and open around the clock, digitally managed loading zones, facilities for last-mile delivery, electric vehicle charging and renewable energy systems. It is designed to standards aligned with LEED, the green building rating system. Last-mile delivery is the final leg of an order, from the storage point to the customer's door, and it is the part of the chain where being close to the city counts most.

Why the zone is building now

Two activity figures accompany the occupancy rate. The number of e-commerce parcels shipped from the zone rose 152 per cent over the past year, and cargo handled through DCC Way, its transit platform, grew 14 per cent during 2025, according to the WAM text. Neither figure comes with an absolute volume, so they show the direction of travel and not the size of the business.

The wider group of zones is in a similar position. Gulf News reports that the three zones under DIEZ, which are Dubai Airport Freezone, Dubai Silicon Oasis and Dubai CommerCity, had a combined occupancy of 96 per cent in the first half of 2026. Over the same period the number of companies operating across them rose 13 per cent from a year earlier and their combined workforce rose 24 per cent. At the Dubai Technology Entrepreneur Campus, new company registrations were up 57 per cent in the first half, and registrations of companies focused on artificial intelligence were up 95 per cent, the newspaper adds.

The announcement ties the project to D33. The National, in its report of 4 October, describes that agenda as aiming to double the size of Dubai's economy, with a target of AED 32 trillion by 2033, and to place Dubai among the top three global cities. It includes a programme to help 30 private companies reach unicorn status, meaning a valuation above one billion US dollars, and business incubators supporting 400 promising companies, the newspaper says.

Plug-and-play offices in a market of long leases

The mix of office types arrives in a week when flexible space was already in the news. On Thursday 8 October, Khaleej Times reported the findings of a JLL report on the flexible workspace sector in the Middle East and Africa in 2026. JLL finds that more than 90 per cent of corporate real estate portfolios in the region remain on conventional long-term leases. Worldwide, fewer than 5 per cent of corporations put more than 10 per cent of their portfolio into flexible space, and more than 40 per cent put in 1 per cent or less.

JLL's argument, as Khaleej Times reports it, is that artificial intelligence and changing work patterns make it harder for companies to forecast how many people and how much office they will need, which pushes them towards space they can adjust. Operators across the region are investing in technology, meeting facilities and hospitality-led services. Dana Williamson, who heads offices, business space and retail for JLL in the Middle East and Africa, said flexibility is becoming a core tool for corporate occupiers to manage risk, according to the newspaper.

A caution is needed here. The JLL report as covered by Khaleej Times gives no figures for Dubai or the United Arab Emirates; its only city data concern Riyadh. It is regional background for the plug-and-play offices at Dubai CommerCity, not a measure of demand for them.

What comes next

Delivery is staged. The overall window runs from the first quarter of 2027 to the fourth quarter of 2028, according to Gulf Business. Within it, the six buildings of the Business Cluster come in two stages, the first in the first quarter of 2027 and the second in the first quarter of 2028. Gulf News presents the programme slightly differently, as two phases with the first due in the first quarter of 2027 and the second targeted for the fourth quarter of 2028. Both accounts agree on the start and the end.

Several things a tenant or a broker would want to know were not in the announcement or in the press reports read for this article: rents, the size of each of the six buildings, the share of space in each office format, the delivery quarter of The Hive and of the Social Cluster, and whether any space has been leased in advance. Until those are published, the firm facts are the three clusters, the areas, the budget and the calendar.

For the commercial property trade in Dubai, the practical reading is a dated pipeline: a free zone with almost no vacancy today, a first batch of offices due in early 2027, and a second a year later. A company that needs space in the zone before then is competing for the few per cent that remain.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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