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According to Savills, the world’s leading real estate services provider, warehousing costs in Dubai rose by 7.7% in the 12 months to June 2022, making it one of the world’s most premium warehousing markets.
The average cost of warehouse properties increased between June 2021 and June 2022 in the 52 global markets monitored by Savills, Savills said in part of its 2022 Impact update. 8.4%, as demand for industrial and logistics space surged in the wake of the pandemic.
London is the most expensive warehousing market in the world, with an average occupancy cost of $35 per square foot (rent, service charge and tax), followed by Hong Kong ($26) and Tokyo ($22).
Strong demand and lack of A-grade inventory in Dubai pushed warehouse occupancy costs to $19 per square foot, the fourth-highest.
Meanwhile, the U.S., while warehouse costs are generally lower, saw the largest percentage increase over the past 12 months: Occupancy costs for space in seven major industrial markets rose by an average of 20.1%.
Warehousing properties
Swapnier Pillay, Associate Director, Middle East Research, Savills, said: “Dubai is a mature logistics market in the region, with sectors such as e-commerce and third-party logistics (3PL) expanding their activities in the wake of the pandemic .”
“The entry of new international companies, especially in engineering and manufacturing, has also accelerated due to favorable business setup opportunities provided by the government, driving the demand for warehouse space,” Pillai noted.
According to Savills, rising warehouse costs are only part of the decision-making process for space occupiers: global labour costs have also risen by an average of 6% over the past year, while electricity and diesel costs have risen by 39.4%.
Paul Tostevin, Director of Savills World Research Team, said: “Evolving consumer behaviour, the boom in e-commerce and changing supply chains have resulted in a lack of space and rental growth in many highly constrained markets, driving the global warehousing market. to new heights.”
“Weakening consumer confidence and rising energy and labour costs have yet to impact demand or rents, and given the lack of A-grade supply in many markets, the cost of space in the best locations is likely to remain high. This will also be supported by further demand as retailers look to ‘green’ “Their supply chain, and therefore the highest rated sustainable building,” Tostevin points out.
The lowest cost of warehouse properties in India is between $3 and $4 per square foot. Low e-commerce penetration and underdeveloped manufacturing mean that India has yet to see the same development as other markets, but it offers huge potential thanks to a vast potential consumer market for online retail and as a low-cost manufacturing base. –arab trade news agency
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