Industrial property market on the rise in Dubai

New report by Savills advises investors pay attention to the industrial rents sector in Dubai.

Of all Dubai’s commercial real estate sectors, office and industrial property showed best results in 2015 and in the first quarter of 2016, a recent report by Savills consultancy has revealed.

Such Dubai industrial areas like Dubai South, Dubai Investment Park (DIP) and Dubai Industrial City (DIC) have demonstrated unprecedented growth rates in the rental sector, despite the decline in oil prices and general economic conditions, experts can confirm. In the older industrial and commercial areas like Al Quoz, Al Qusais and Ras Al Khor almost all warehouses, technical facilities and offices are already occupied by large companies, and rental prices are rising due to shortage in supply.

Manufacturing, transport and logistics sectors today are responsible for 30% of Dubai's GDP, thus industrial property sector opportunities for high lease profits are highly underestimated, said David Godchaux from Savills. According to experts’ findings, potential investors generally seek mostly for residential and office property in order to get the highest possible return on investments, while the industrial real estate sector could be even more interesting for investments in this regard, Savills experts believe.

David Godchaux said: “When you look at the returns in Dubai, where there is a shortage of quality supply, relatively strong demand and infrastructure in place, it is certainly a market investors should not overlook.”

“The sector in Dubai is still very strong and resilient, largely due to its prime location as a hub for the surrounding area, and the quality infrastructure and logistics in place,” he added.

In particular, last year DIC saw the highest tenants’ activity level ever since its foundation in 2004 with more than 45 new companies having occupied premises there, while DIP saw more than 2.4 million sqf of industrial property transacted last year and Dubai South zone saw high profile leasing deals by Boeing, Ikea, Panalpina etc.

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