The industrial property sector in the UAE witnessed robust growth over the last 12 months, with the rents soaring to a new high largely due to limited, quality industrial accommodation, said a report.

The emirate of Dubai continues to position itself as a premier global integrated logistics hub with its bonded free zone locations Jebel Ali Free Zone Authority (Jafza) and Dubai World Central (DWC), stated property expert Knight Frank in its report.

Access to a large number of markets including the GCC, Middle East, Indian subcontinent and Africa along with Dubai's location, logistics, legislation and infrastructure make it an ideal supply and re-distribution gateway, it added.

Arun George, the senior surveyor at Knight Frank, said: "The general market sentiment has been upbeat, albeit there was certain amount of restraint in last quarter of the year from occupiers. On the whole there was healthy appetite for industrial accommodation in prime industrial districts and free zones."

As volume of business increases and perceived risk reduces, the firms try and backward integrate their supply chain, breaking away from using third party logistics operators, stated Knight Frank in its report.

The demand from such smaller first time occupiers is on the rise, it added.

Knight Frank said some of the larger established occupiers in older traditional industrial locations are resisting from investing further in their facilities, as redevelopment of the industrial area is a possible scenario.

Dubai Investment Park (DIP) and Dubai Industrial City (DIC) are witnessing further investment and improvement of road infrastructure with construction of flyovers and road widening on the back off Expo 2020, it stated.

The property expert said proposals for the extension of the Dubai Metro - Red Line from Jebel Ali to the Expo 2020 site would be another driver for both these locations.  

Many new multi-national occupiers are choosing DIP, such as Can-Pack Group on 13,935 sq m (150,000 sq ft) and an investment of Dh200 million ($54.4 million), it added.

Knight Frank pointed out that the occupiers from traditional industrial areas (Al Quoz and Ras Al Khor) are relocating to newer locations such DIP or DIC which are seeing better infrastructure, connectivity, with better security of tenure (longer leasehold tenures) and services.

Dubai World Central (DWC), it stated, continues to attract larger occupiers consolidating their businesses, including Landmark group who is currently developing their 371,609 sq m (4 million sq ft) facility.

On the Abu Dhabi market trends, Knight Frank said heavy industry and manufacturing companies appeared to prefer Abu Dhabi, with Kizad attracting a majority of these requirements such as BRF (Sadia) which recently opened a new $180 million plant there.

With the relocation of the container facility from Mina Zayed port to the Khalifa port, there has been an increase in enquiries from logistics companies for Kizad, the expert pointed out.  

With a similar relocation of Roll-on/Roll-off (Roro) vessel facility (the mode of transporting cars and other vehicles) to Khalifa Port, automobile trading companies are making inquiries about Kizad.

A significant increase in ground rents in Mina Zayed has resulted in much relocation from the area as it is planned to undergo redevelopment, stated Knight Frank in its report.

New industrial locations in prime areas for distribution are attracting greater number of enquires, it added.-TradeArabia News Service