Industrial tenants scout new locations

Many industrial occupiers are moving from Al Quoz and Ras Al KhorImage Credit: Supplied

Latest surveys on Dubai’s industrial rents suggest there has been a flight to quality from traditional locations in Dubai like Al Quoz and Ras Al Khor to Dubai Investments Park (DIP) and Dubai Industrial City (DI).

According to Knight Frank’s Q3 2015 report on the industrial and logistics sector in Dubai, occupiers head for newer destinations because of better infrastructure, connectivity and longer leasehold tenures. New flyovers and the widening of existing roads have been taken up near these new industrial hubs to avert traffic gridlocks.

There has been an increase in enquiries for industrial space from the food and beverage sector, with a number of requests for creating central kitchens. A dip in oil prices has seen companies involved in the hydrocarbon industry economising real estate facilities and exploring options of sub-leasing excess space.

About 436 new companies were registered at DIP during the first five months of 2015, taking the total number of commercial entities operating from the industrial cluster to around 4,500. This ensured a 20% increase in commercial space allotments in the period compared to last year.

The industrial and logistics sector is set to receive a big push with plans of the authorities to enhance connectivity between Dubai South (formerly Dubai World Central), which houses the Al Maktoum International Airport, and the Jebel Ali Port. Dubai South is set to become a bustling industrial hub boasting several manufacturing and logistics companies. With the airport set to handle 12 million tonnes of cargo annually and Jebel Ali Port on the way to achieve a target of 22 million TEU per year, a seamless corridor between the two industrial gateways is expected to boost the industrial rents in both the clusters. Already, there is a rising demand for larger occupiers in Dubai South.

On average, there has been approximately 4 per cent growth in rentals over the last six months across the industrial districts.

Handy Hints:

* New prime industrial locations are attracting more enquiries

* Industrial rents at Dubai South expected to go up in months

*The food and beverage sector currently pushes up demand

Source: S. Dhar, Special to Properties


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