Dubai industrial rents up 25% amid shortage of stock

Knight Frank report says seven of nine industrial districts register double-digit rent increases in past year
Dubai industrial rents up 25% amid shortage of stock
Dubai Investments Park, where rents have risen by 41 percent in the past year.
By Andy Sambidge
Tue 29 Jul 2014 10:07 AM

Industrial rents in Dubai have risen by 25 percent in the past year, according to a new report by real estate consultancy Knight Frank.

Its report said rental values in seven out of nine districts tracked in Dubai had seen double-digit increases over the past year.

Class 2 buildings in Dubai Investments Park, Jebel Ali and Ras Al Khor were the best performers, with rents up on average by 41 percent year-on-year in the second quarter of 2014.

Class 1 buildings in Dubai also performed strongly, Knight Frank said, with rents up 29 percent, 12 percent and nine percent across DIP, JAFZA and Al Quoz respectively.

The report also said that in the first half of 2014, the level of enquiries for industrial property were significantly stronger compared to six months earlier.

However it added that transactional activity was "fairly weak" due to a lack of stock availability. This resulted in muted rental value growth of just one percent quarter-on-quarter.

Knight Frank's report also said that demand for warehouse and distribution facilities remained healthy between January and June, driven by Dubai's growing retail sector.

But a growing shortage of good quality industrial buildings is leaving new occupiers with little choice but to settle for lesser quality units, the report added.

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