Dubai: The surge in online sales is not hurting all types of brick-and-mortar. In fact, there’s one category – warehousing and logistics – that’s is doing quite well because of it.
“For every $1 billion added in new ecommerce sales, there’s a need for a further 1.25 million square feet of industrial real estate,” said Zachary Cefaratti, CEO, Dalma Capital Management. “That’s exactly what’s happening in the UAE/Gulf.”
Digital appetite
The digital economy is also feeding different types of industrial real estate.
“The “dark kitchen” concept and last-mile logistics is what’s driving industrial real estate,” said Manohar Lahori, Chairman of Palmon Group, and chief promoter of Manrre Logistics Fund.
Dark kitchens are off-site locations where food gets prepared for multiple restaurant operators and to serve the exponential growth in the food delivery market.
A preference for industrial
The Manrre Fund has picked up 8-10 million square feet of industrial space in the recent past, half of which is in Dubai.
The Nasdaq Dubai listing will give it access to institutional investors, and that’s how the fund promoters intend to keep it, at least for now. Minimum investments are pegged at $50,000.
“Going for retail investors is not our intention at this stage,” said Lahori. “This is a private listing on Nasdaq Dubai, and it was intentional to keep it that way.”
Real estate funds
Specialist real estate funds in the UAE have not been having a good time of it over the last two years. The steady decline in property values, in both commercial and residential, has been hurting yields.
According to Lahori’s Manrre’s overwhelming focus on industrial real estate, including those in free zones, insulates it against the downturn.
This article was originally published by Gulf News.
