"Challenges ahead" for Dubai's industrial sector, says report
"Challenges ahead" for Dubai's industrial sector, says report
Dubai’s industrial and logistics real estate market remained stable in the six months leading up to 2019 but faces a challenging year ahead, according to Cavendish Maxwell's 2018 Industrial and Logistics Report.
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Image by Moh via UnsplashDubai’s industrial and logistics real estate market remained stable in the six months leading up to 2019 but faces a challenging year ahead, according to Cavendish Maxwell's 2018 Industrial and Logistics Report.
Increased flight-to-quality and supply is still outstripping take-up leading to a challenging year ahead, one industry expert says.
Partner and Head of Investment and Commercial Agency at Cavendish Maxwell, Andrew Love, said the industrial sector faces a tough year ahead.
“Dubai’s industrial and logistics real estate market remained relatively stable in the six months leading up to 2019. However, the market continues to be challenging, with increased flight-to-quality and supply still outstripping take up.
"We will continue to monitor market conditions going into 2019, providing our customers with expert insights to help them decide how best to maximise investment and returns.”
Key insights
Demand for property in the industrial sector is being driven by SMEs across Dubai, many of which are seeking opportunities to relocate and benefit from the softer market conditions in an attempt to reduce their occupational costs.
The logistics/distribution and general trading industries accounted for over 60% of demand, with manufacturing also showing positive enquiry levels, a testament to the competitiveness of Dubai for business.
Accounting for approximately 10 per cent of the UAE’s economy, the logistics and transport industry’s market share far outperforms the wider region. Continued significant investments into this sector should provide the platform for future growth and ensure the industry plays an important role in the economy in the future.
Funds, Real Estate Investment Trusts (REITs) and high-net-worth individuals looking for opportunities are driving appetite for investment in the industrial and logistics sector of the property market. In the absence of good quality investment opportunities, investors with cash to spend are increasingly reviewing options that would not have been considered 12-18 months ago.
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