Strategic Warehouse Location Selection: Key Factors for Logistics Success

Selecting the optimal warehouse location is one of the most consequential decisions for logistics operations in the UAE. With over 40 free zones and diverse mainland options, the wrong choice can result in years of elevated costs and operational constraints. This guide provides a framework for systematic location evaluation.

UAE Free Zone Comparison for Logistics

JAFZA (Jebel Ali Free Zone) is the Middle East's largest free zone with over 9,500 companies across 20 sectors, generating $190 billion in trade value in 2024. JAFZA's direct integration with Jebel Ali Port means containers can move from warehouse to vessel in under 2 hours during optimal conditions—3-4 days faster than other free zones, translating to approximately $180,000 in annual inventory holding cost savings for moderate operations.

DAFZA (Dubai Airport Free Zone) hosts 1,700+ companies with a focus on air cargo, aviation, and time-sensitive shipments. Located adjacent to DXB (handling 2.8 million tonnes of cargo annually), DAFZA offers faster visa processing (3-5 days) and a higher visa allocation ratio (1 per 250 sq.ft vs JAFZA's 1 per 500 sq.ft).

Dubai South is emerging as the integrated logistics hub, combining air cargo proximity to Al Maktoum International Airport with sea freight access to Jebel Ali Port. The free zone is central to Dubai's vision for a multimodal logistics corridor.

Warehouse Facility Options

JAFZA offers the widest variety of warehouse facilities, from 500 to 100,000+ square meters. The JAFZA Logistics Park provides 46,112 sq.m. of leasable flexible space, including temperature-controlled storage, hazardous materials handling, and automotive logistics capabilities.

DAFZA facilities are optimized for air cargo operations with world-class logistics infrastructure and streamlined customs processes. Minimum office space requirements are typically 100-200 square meters.

Free Zone vs Mainland Considerations

Free zone locations offer 0% corporate tax (though UAE corporate tax of 9% now applies above AED 375,000 profit), 100% foreign ownership, simplified regulations, and duty-free storage. However, restrictions on mainland sales may require customs clearance when moving goods to local markets.

Mainland locations provide unrestricted market access across the UAE and GCC. Many companies operate both free zone and mainland facilities to optimize for different customer segments—using free zones for re-export and mainland for domestic distribution.

Cost Comparison Factors

While JAFZA may have 30% higher facility costs than alternatives, the direct port integration and reduced logistics cycles often justify the premium for import/export-heavy operations. Calculate total cost including rent, transportation, labor, and inventory carrying costs before deciding.

Facility Specifications

Modern logistics requires specific building characteristics: clear heights of 10+ meters for racking efficiency, adequate loading dock capacity, reinforced floors for heavy equipment, and sufficient power for automation systems. JAFZA's specialized facilities include cold storage (-25°C to +25°C) and dangerous goods handling certifications.

Evaluate expansion potential—can the facility accommodate growth, or will relocation become necessary as operations scale?