PC: Arab News
According to Kunal Lahori, director of Manrre REIT Logistics Fund, warehouse rents are expected to increase in the UAE by 10 percent during 2025 due to the demand coming from low vacancy rates and the scarcity of industrial land. The fund specializes in institutional-grade logistics and industrial assets across the UAE and GCC.
“In the past year alone, rents have already increased by 25-30 percent, which we expect will add up to an additional 5-10 percent,” Lahori said. Demand for logistics space remains strong, particularly from e-commerce and multinational tenants. The supply is constrained due to a lack of warehouses and industrial land. The vacancy rate for Grade A assets is as low as 3 percent, reflecting the limited availability of high-quality industrial spaces.
The market is attracting the attention of both local and international logistics players, manufacturing firms, and e-commerce giants. The UAE e-commerce sector is growing at a rate of 20 percent per year, outpacing global trends. Lahori pointed out that in Jebel Ali alone, the demand for logistics space is 40 million square feet.
Knight Frank’s report last year referred to the dearth of good-quality industrial and logistics space in Dubai and the UAE. Al Quoz (Grade A) led the increase in rents at 45 percent, hitting AED 72-100 per square foot. Dubai Investments Park (DIP) saw the most growth, reaching AED 50-70 per square foot, with a hike of 48 percent. Dubai Industrial City and Dubai South showed significant gains of 38 percent and 26 percent, respectively.
Supply is expected to loosen slightly over the next twelve to eighteen months, stabilizing the market with a 10 percent increase, as per Lahori’s belief. This results from the ever-increasing demand for high-quality assets and the expansion of e-commerce. With the sizable demand, a significant pipeline of new asset acquisitions is expected from property developers. The Knight Frank report also noted increasing interest from international investors, in particular from the USA, China, and Europe, drawn by attractive yields of approximately 8.25 percent in Dubai’s industrial sector.
Manrre REIT Logistics Fund targets further growth in key locations such as Jebel Ali Free Zone (JAFZA), DIP, and National Industries Park. Lahori recognizes GFH Partners’ recent investment in the fund to be a game-changer, stating that Manrre has consistently delivered an annualized dividend of between 7 and 8 percent. With GFH Partners on board, he has confidence that the fund would be less encumbered while expanding its asset class in the marketplace. The investment value wasn’t disclosed.
Founded in 2018 by Palmon Group FZCO, a local developer and owner of logistics buildings, Manrre’s portfolio amounts to around AED 500 million ($136.1 million), which contains 26 superior-grade properties with more than 1.5 million square feet of space. The occupancy of the portfolio is at 96 percent and also consists of various last-mile logistics hubs.
