Since the beginning of 2022, Dubai has begun to record a pronounced increase in the business activity index. The old business began to return to the country and a new one began to open. Particular growth was shown by companies operating in the field of e-commerce, logistics and some agricultural segments.
E-commerce began its triumphant march during the height of the pandemic, but logistics and agriculture have grown already this year. In no small part due to the current economic and international crisis, the food crisis and some other factors. Against the background of current events, the country's oil and gas sector also demonstrated growth, the impressive results of which became clear already at the beginning of the second half of 2022.
All this has led to an extremely rapid recovery of Dubai's commercial real estate sector and, above all, the industrial sector, which is necessary for the sustainable operation of a growing number of enterprises in the country. Since e-commerce plays the main role in the economy today, the largest share of the acquired industrial areas is small warehouses, usually for storing delivered goods for a short period of time.
In recent months, companies from the oil and gas sector have focused their attention on another segment of the real estate market: increased space, which will be suitable primarily for ensuring the work of companies providing engineering and maintenance services.
Analyzing the demand from the agricultural sector, it is easy to see that the main buyers are the operators of vertical farms. The demand from them has been gradually increasing over the past 12 months, but especially strongly in the last half a year. Mainly due to the growing domestic demand of the UAE for products produced by these local enterprises. With the growing problems with the purchase of food on the global market, many countries, including the Arab Emirates, see a great need for self-sufficiency.
However, the rental rates of industrial real estate in the sector as a whole have not yet shown a significant increase. In some areas of Dubai, such growth has been observed, but so far, the increase in demand is affecting prices in the form of a fairly stable growth. Today, the main goods on the market are industrial objects of class «B», the average increase in rental rates for which ranged from 4-9%. One of the reasons is the shortage of premium class «A» premises. Property owners who rent it out express confidence in the growth of the market. Most of them indicated an increase in the share of leased premises.
Demand also promises to continue to grow, especially in the logistics sector. The market offers enough offers with different characteristics, including automated spaces with temperature control. There are enough facilities on the market that can provide a high degree of utilization during operation, especially in the case of real estate for manufacturing enterprises. The logistics sector, e-commerce, engineering enterprises and manufacturers will remain the main engines of growth of the industrial sector in the second half of 2022.
At the same time, market experts expect a significant increase in foreign investment in the coming months. First of all, on the part of investment funds.
