Although Dubai’s position as the regional logistics hub remains unchallenged, the curtailed global trade volume and the region’s adaptation to the new norm of oil prices at around $50 per barrel is reflecting on the overall demand for industrial/warehousing real estate. Throughout Q2 2016, we saw a plateauing of average rents while upper rental ranges witnessed downward adjustments across most of Dubai’s industrial and warehousing submarkets.
Many of the existing occupiers are trying to optimise current footprint and evaluate relocation costs while new entrants are generally cautious when undertaking their first phase expansions into the region. This has led to a marginal release in supply, albeit mostly in the Grade B category. Ready built Grade A stock continues to attract tenants while large logistics requirements are purpose built and are mostly positioned in the newer submarkets.
Source : Core Savills