UAE’s warehouse, logistics market to grow exponentially

Saleh Abdullah Lootah
Saleh Abdullah Lootah

DUBAI —The demand for warehouses is growing exponentially in the UAE as the popularity of e-commerce and online shopping continues to increase. Despite the increase in demand, the supply for storage space in the country remains low, according to global real estate services and investment firm CBRE. This gap will be significantly filled in by Senaeyat, the UAE’s first lease-to-own industrial warehouses.

According to Saleh Abdullah Lootah, CEO of Lootah Real Estate Development, developer of Senaeyat, online shopping transactions in the region and in the UAE have been increasing by double-digits year on year, which in turn creates more interests for warehousing.

Lootah said: “All over the world, e-commerce has been driving the expansion in the warehouse leasing market. This is evident in the UAE, which enjoys the world’s highest mobile penetration, high purchasing power per capita and large consumer spending. All these factors result in a huge demand for warehouses, which are also interchangeably called fulfilment centers, today. However, the warehouse inventory in the UAE has not been catching up with this upward trend.”

“The Senaeyat project will strongly contribute to the growth of UAE’s industrial and logistics ecosystem by providing cost-effective options for businesses without compromising excellence. As an affordable industrial partner, Senaeyat empowers businesses to own warehouses over a period of only 10 years and convert rental expense to property asset,” he added.

UK-based consultancy firm Business Monitor International (BMI) puts the average annual online spend per person in the UAE at around $300, more than three times than Saudi Arabia’s $90 and France’s $94.

Visa recently reported that payment volumes in MENA region surged by 44 per cent in 2018 over the previous year. The UAE's e-commerce market is estimated to be worth $27.1 billion by 2022, a report from Admitad MENA, a branch of the Global Affiliate Network Admitad, shows.

According to 2019 Agility Emerging Market Index, the UAE is among the top 3 emerging markets in the world for logistics after China and India and ranks first in the region.

The country’s logistics markets have also benefitted greatly from investments in physical infrastructure, earning as much as $30 billion (AED110 billion).

Lootah Real Estate Development (Lootah), one of the region’s most prominent real estate developers, has launched Senaeyat, last June to fill in the demand for logistical needs and easy warehousing solutions. As an affordable industrial partner, it allows businesses the ability to own warehouses over a period of only 10 years. Through its lease-to-own turnkey and strategically-located properties, rental expense becomes a property asset that appreciates over time. — SG