Increase in enquiries for acquiring industrial and warehousing assets

During H1 2020, the industrial and warehousing market was greatly influenced by global supply chain disruptions and a change in local demand and delivery patterns for goods. There was a sudden urgency among companies to shore up their online presence and invest in logistics and warehousing supply chain. As a result, demand for Grade A industrial and warehousing space witnessed a strong increase across Dubai. This is a marked shift from the subdued activity levels which we reported twelve months ago.

Transaction activity was driven by existing tenants taking up additional space to increase their inventory carrying capacity and by companies that had to invest in their warehousing and logistics capability to move their sales online.

Demand was particularly strong across the key free zone micro-markets of the city. Space take-up was led by e-commerce companies. As per the DED (Department of Economic Development), with online shopping gaining fresh momentum in the UAE, 102 new trade licenses were issued in the period January to April 2020. This was closely followed by companies from the 3PL (Third Party Logistics) sector that were capitalizing on the continued growth of online and omnichannel retail.

Companies from the healthcare sector were among the other key drivers of demand during H1 2020. Healthcare remains a vital economic sector and has seen accelerated activity levels in the wake of the pandemic. Companies from the sector were seen taking up warehousing space and industrial land for build-to-suit projects, especially within the Dubai Science Park. There was also a spike in enquiry levels and transactions across Dubai South, driven by the near completion of their first e-fulfilment center measuring approximately 355,000 sq. ft.

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