E-commerce has been driving the expansion in the warehouse leasing market, says Lootah CEO
All over the world, e-commerce has been driving the expansion in the warehouse leasing market, said Saleh Abdullah Lootah, CEO of Lootah Real Estate, predicting that due to this the UAE’s warehousing and logistics market is set to grow at an exponential rate.
He said that this is especially evident in the emirate, 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.
However, the warehouse inventory in the UAE has not been catching up with this upward trend, Lootah stated. According to global real estate services and investment firm, CBRE, despite the increase in demand, the supply for storage space in the country remains low.
Meanwhile, 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. Additionally, 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.
Due to this, anticipating an increase in warehouses, Lootah Real Estate had launched the region’s first lease-to-own industrial warehouses, Senaeyat, in Dubai industrial Park.
“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.
Senaeyat will offer industrial warehouses at 2 per cent down payment, with customisation options available for different business requirements.
“This model of warehousing is in response to the industry’s need for a uniform price in warehouse leasing, to counter the market’s current fluctuating prices,” Lootah concluded.