Dubai industrial market set for solid growth
Dubai, October 3, 2012
The light industrial and logistics market is set to register solid growth thanks to the renewed confidence in the sector and new projects at Dubai Investments Park and Dubai Industrial City, said a report.
Enquiry levels are significantly up with existing companies wishing to expand or consolidate operations and new companies looking to enter the market, said real estate specialist Cluttons in its third quarter market report for Dubai’s light industrial and logistics market.
The strong take-up in industrial buildings in the first half is evidence wenough to show that confidence is returning to the sector in the free zone and non free zone environments, the expert said in its report.
In the last quarter, Cluttons has worked on active enquiries totaling 100,000 sq m throughout Dubai.
Dubai investments Park and Dubai Industrial City have reported strong take-up in industrial buildings in the first six months of 2012, the expert stated.
According to Cluttons, there is a big demand for temperature-controlled facilities from logistics companies wishing to lease additional warehouses that can facilitate Fast Moving Consumer Goods (FMCG) contracts.
Interest to acquire land plots throughout Dubai is showing similar positive signs, it added.
Cluttons said it has worked on two large land acquisitions totaling 80,000 sq m in the first half.
According to Cluttons, the rents across the region have remained relatively stable at Dh17 per square foot per annum depending on size and specification. The last six months has also seen capital values remain reasonably stable.
However, some transactions in locations such as Jafza have pushed over the Dh200 per square foot level. The notable lack of prime stock has resulted in the investment market witnessing net yields compress to 8.5 per cent, said the Cluttons report.
On its future outlook, Cluttons said that in 2013 the enquiries will continue at similar levels seen in the first and second quarter, and is optimistic about further absorption of the oversupplied, light industrial stock throughout the emirate as well as continuation of demand for build-to-suit units in prime locations.-TradeArabia News Service