Industrial & Logistics
Middle East Real Estate Market Outlook 2023
1 Minute Read
The GCC’s industrial and logistics sector over recent years has garnered a considerable level of occupier and investor interest. However, it has at the same time also been the most undersupplied in terms of suitable stock, which has held back both occupier and investment activity considerably. This backdrop has meant that average rents have increased in the vast majority of markets over the course of the last year.
With reliance on the sector expected to only increase, we feel that the sector will continue to record rental growth unanimously irrespective of location. We will, however, see polarised rates of growth across markets.
Although in key hub markets such as Abu Dhabi, Dubai, Riyadh and Jeddah we are expecting new supply to be delivered over the course of the year, we do not envisage that this will have a negative impact on prices. In fact, where this is institutional grade stock, we expect that it is more likely to set new benchmark rents. As a result, this may also cause fragmentation in rental rate performance going forward, with poorer quality stock likely to see rental rates come under pressure.