UAE needs more warehouses, demand increases
Key takeaways:
- Change in ownership rules declared as part of a raft of financial stimulus efforts, which have a range of new visas, are a substantial contributor to rising business spirit, activity, and need in warehouses and industrial real estate.
Rents for industrial areas in Dubai and Abu Dhabi are healing as a need for warehouses witnesses a surge across the UAE, according to a recent source revealed by international real estate consultancy Knight Frank.
The Spring 2022 Dubai & Abu Dhabi Industrial Markets Review article states that average warehousing rent rates will continue to heal quickly across Dubai, with grade A rents in Al Quoz undergoing the most robust increase both on a quarterly and yearly basis.
The partner and director of Middle East Research, Knight Frank, Faisal Durrani, stated: “The quick reopening of Dubai’s economy has prompted business confidence. And it is this increased trust amongst businesses across the nation underpinning the revival in warehousing demand.
“In addition to the government’s reply to Covid-19, the outbreak has also caused a seemingly permanent change in customer shopping habits, not only in the UAE but worldwide, which is increasing demand for warehousing and distribution facilities.”
Only two of the nine industrial sub-markets that Knight Frank follows in Dubai experienced rental growth in 2022. Only Grade B rents in JAFZA (AED 16 per square foot) and National Industries Park (AED 25 per square foot) have had constant.
Durrani added: “Certainly during 2021, except confidential needs, nearly a quarter of all demand in Dubai was from 3PL and logistics operators, which totalled nearly 1.6 million square feet of area.”
Also, Knight Frank even points to the shift in ownership rules declared as part of a raft of economic stimulation actions since the pandemic started, which have a range of new visas designed to lure, and keep talent as being an essential contributor to the increased business trust, activity, and demand.
