“Knight Frank”: a significant growth in demand of 17.7% during 2022

Rents in industrial areas in Dubai are witnessing strong increases

Average warehouse rental rates in Dubai have shown a significant improvement in the past 12 months.

archival

A new study by "Knight Frank, a global real estate consultancy company", showed a significant growth in rental demand in Dubai's industrial areas, by 17.7% during 2022, to return to levels before the "Covid-19" pandemic, with demand continuing to exceed supply.

Strong highs

And "Knight Frank" reported that, according to the annual review of the industrial sector in both Dubai and Abu Dhabi, the rental rates for warehouses continue to rise, on average, in all parts of Dubai, especially first-class rents in the Al Quoz area (55 dirhams per square foot), which It increased by 57% during 2022. Knight Frank confirmed that all nine industrial sub-markets that the company is tracking in Dubai witnessed strong rent increases in 2022, and are currently higher than previous rental levels of the “Covid-19” pandemic.

A booming sector

"Dubai's industrial market is a thriving sector that plays a major role in the emirate's economy, accounting for about 60% of GDP," said Faisal Durrani, Partner and Head of Middle East Research at Knight Frank.

He added, "The average rental rates for warehouses, in Dubai in particular, showed a significant improvement in the past 12 months, as demand increased by 17.7%."

He continued, “A large part of the demand can be attributed to the government’s resolute response to the need, which has worked to enhance business confidence, and this optimistic atmosphere, in turn, has led to an increase in the number of new entrants to the industrial market, especially the manufacturing sector, which now represents 36% of 12.2 One million square feet of demand that we recorded during 2022, then comes directly after the logistics services sector, whose share of total demand last year amounted to 1.95 million square feet.

strong general

For his part, Adam Win, Assistant Partner - Joint Head of the Industry and Logistics Department at the UAE branch of Knight Frank, said: “2022 was another strong year witnessed by the industry and logistics sector in the UAE, as the market continues to advance in the path of development and maturity.”

He added, “Over the last 12 months, real estate occupants have continued to demand first-class units, in parallel with a limited supply in the market.

It is a critical factor in supporting the resilience and performance of the sector.”

In the same context, Andre Love, Head of Capital Markets in the Middle East, Property Services, Rentals and Commercial Agency at Knight Frank, said: “We still see a demand for suitable leasing logistics units from investors and real estate funds seeking to diversify their investment portfolios.”

Abu Dhabi market

According to Knight Frank, the situation is more stable in Abu Dhabi, with warehouse rents in the six main markets that Knight Frank tracks unchanged during 2022.

The company pointed out that prices in the Abu Dhabi Airports free zone are still the most expensive in the city, while other industrial areas in Abu Dhabi, such as the Kizad region, have not witnessed any change in rents, since demand has remained constant.

• Rents back to pre-pandemic levels as demand continues to outstrip supply.

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