Demand for UAE sheds soars
Rents for industrial space climbs by 29% as manufacturing sector flourishes
The UAE's industrial property sector has seen robust growth over the last 12 months, withstrong growth in rents being achieved largely as a result of limited, quality industrial accommodation, according to a new report.
Property consultancy Knight Frank said that the UAE's manufacturing sector reported annual GDP growth of 8.9% in 2013, although the government expects to raise this figure to 20% by 2020.
It added that slump in crude oil prices in the second half of 2014 has not yet had a significant effect on the UAE's industrial property sector.
The economic drivers for the two emirates are different, with demand in Abu Dhabi heavily skewed towards oil & gas, while Dubai is much more diversified.
That said, rising rents in both cases have been underpinned by a lack of quality industrial accommodation.
In Dubai, rent in major industrial sectors and free zones has been increasing by around 29% year-on-year, and firms have been abandoning traditional industrial areas like Al Quoz and Ras Al Khor for sites with better infrastructure and connectivity such as Dubai Investments Park and Dubai Investment City.
In Abu Dhabi, rents have remained stable even though the bulk (51%) of its GDP is based on the oil & gas market. Rents in the Musaffah Industrial Area witnessed a 10% year-on-year rise.