Unglamorous industrial space will be the first UAE property sector to recover, analysts predict - with video.
UAE's next hot property sector goes industrial
The hottest property sector in the UAE is unglamorous industrial space.
Office complexes, residential towers and shopping malls with ski slopes get the bulk of the attention, but warehouses and logistics centres are attracting investors and tenants, analysts say.
Light industrial and logistics buildings will be the best performing sector in 2011, Jones Lang Lasalle predicted in a report released this week. Investors like the steady yields and relatively low risk offered by industrial space, according to Andrew Charlesworth, head of capital markets in the UAE for JLL.
But there are few industrial properties available for sale, Mr Charlesworth said.
"Investors are trying to find a way in, but there aren't deals to be done," Mr Charlesworth said.
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Abu Dhabi was recently ranked the 10th most expensive industrial market in the world, a notch below Paris, according to a new report by Cushman & Wakefield.
Industrial space was "less subjected to speculative development," said David Quinn, head of UAE operations for Cushman & Wakefield.
Rents for industrial space fell during the economic crisis, mirroring the trends in other sectors.
Dubai rates dropped from about Dh500 a sq metre to Dh250 a sq metre, according to CB Richard Ellis data. In Abu Dhabi, rental rates that were more than Dh1,900 a sq metre in 2008 are now closer to Dh750 a sq metre.
But rents have already started to stabilise in many areas. And a boost in UAE trade should benefit the industry.
"There is a lot more demand [in Abu Dhabi] than a year ago," said El Fatih Said, chief executive of the Abu Dhabi Business Hub.