Industrial & Logistics 

Industrial & Logistics 

The GCC’s industrial and logistics sector continued to see demand outpace supply across a number of key locations. Whilst there is considerable capital allocated to the sector to help ease the issue of limited supply, factors such as the lack of serviced land, evolving regulatory landscapes and rapid changes in planning and zoning regulations in nascent and developing markets, are causing investors and occupiers to stall potential activity or adopt a wait-and-see approach. This market backdrop has meant that average rents have continued to increase in the vast majority of markets over the course of 2023.

In 2024, whilst we are expecting additional supply to be delivered in a number of cities across Saudi Arabia and the UAE, we do not believe that this will cause downward pressure on rents. On the contrary, we expect that average rents will continue to increase, albeit with the rate of growth likely to moderate somewhat. More so, we forecast that market performance will fragment further over the course of the year, with new institutional quality stock expected to reach new record rates, whereas dated stock is likely to see a more subdued performance. Finally, as new benchmark rates are achieved, we expect that this will encourage more speculative development across a range of industrial and logistics markets and configurations.