Dubai: Industrial rents in Dubai increased 25 per cent year-on-year in the second quarter while rental values across seven out of nine districts tracked by Knight Frank have recorded double digit growth.
Class 2 buildings in Dubai Investment Park (47 per cent), Jebel Ali (39 per cent) and Ras Al Khor (36 per cent) all saw double digit rental growth in the April to June period, according to Knight Frank. Whereas Class 1 buildings in Dubai Investment Park, Jebel Ali Free Zone (Jafza) and Al Quoz recorded rental growth of 29 per cent, 12 per cent and 9 per cent, respectively.
Knight Frank’s Industrial Research Report for the first half of 2014 found demand for industrial property in Dubai is increasing; however, availability continues to be limited.
The report said enquiries for industrial property were “significantly higher” in the first half of 2014 compared to the six months earlier. But due to lack of available stock, quarter-on-quarter rental value in the second quarter saw muted growth of 1 per cent.
Improvement in infrastructure
According to Knight Frank, in the first six months of 2014, strong growth in Dubai’s retail sector was responsible for “stimulating demand” for warehouse and distribution facilities. However, short supply of good quality buildings is forcing some occupiers to settle for lesser quality units.
Enquiries from food and beverage firms for non-freezone locations nearly doubled in the first six months of the year, compared to corresponding 2013 period. Knight Frank said this was due to firms consolidating their operations into single locations.
An improvement in infrastructure and connectivity in Al Quoz has helped boost the take-up of industrial property in the first half, according to the report.
Knight Frank also found that new developments in Al Quoz, Ras Al Khor and Rashidiya typically sized between 30,000 square foot and 50,000 square foot, are likely to be too small to meet demands of larger occupiers.
