Dubai industrial rents continue to recover in H1
Dubai, July 29, 2014
Dubai industrial rents were up strongly during the first six months (H1) of 2014 compared to a year, with seven of the nine major nine districts experiencing double digit growth, a report said.
Class 2 buildings in Dubai Investments Park (47 per cent), Jebel Ali (39 per cent) and Ras Al Khor (36 per cent) performed especially well, highlighted the new release by Knight Frank, a leading independent global property consultancy.
However, that’s not to say that Class 1 buildings did badly; year-on-year, rents were up 29 per cent, 12 per cent and 9 per cent in this category in Dubai Investment Park, Jafza and Al Quoz, respectively, the report said.
While enquiries for industrial property were significantly stronger in H1 compared to six months earlier, due to the limited availability of stock, leasing deals were few and far between. Not surprisingly then, industrial rental value growth was fairly muted at 1 per cent quarter-on-quarter between April and June, according to the report.
Dubai onshore focus
In H1 2014, strong growth in Dubai’s retail sector was primarily responsible for stimulating demand for warehouse and distribution facilities. However, since good quality buildings remain in short supply, some occupiers are finding themselves settling for units of lesser quality, the report said.
Half-on-half, enquiries from food & beverage distributors in onshore locations nearly doubled in the first six months of this year as firms sought to consolidate their operations into single hub locations.
Partly as a result of this shift, a majority of enquiries were for units sized 100,000 sq ft or above.
Moreover, development activity has surged in Al Quoz, Ras Al Khor and Rashidiya as older buildings in these areas reach the end of their lifecycle. However, with plots typically sized between 30,000 sq ft and 50,000 sq ft, they are likely to be too small to meet larger occupiers’ needs, according to Knight Frank.
Turning to Al Quoz, the recent completion of infrastructure construction work has improved the area’s connectivity, which in turn helped boost take-up of industrial property in H1, the report said. – TradeArabia News Service