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Dubai industrial property market holding up well despite global downturn

The latest EMAE Industrial and Logistics Market View from CB Richard Ellis, the world's largest commercial real estate services company, confirms that Dubai has seen industrial rents increase by 50% in 2008.

Dubai is now the eighth most expensive in the EMEA region. The top three markets for industrial rents in the region are led by London Heathrow, Geneva and Helsinki.

'The Dubai industrial market has shown incredible resilience in the current climate, especially when compared with other EMEA markets which have experienced little or no growth or seen rents drop in recent quarters,' said Guy Frampton, Head of EMEA Industrial and Logistics at CB Richard Ellis.

The report indicates that occupiers of industrial and logistics space are looking for flexible, adaptable buildings which will help to drive efficiencies and reduce operating costs. 'A two-tier market has emerged in some European markets as rents begin to rise for tailor-made facilities, despite an overall rental rate downturn on existing buildings last year,' said Frampton.

In Europe demand is being driven by the need for occupiers to cut operating costs and increase building efficiencies. Against a backdrop of weakening demand for their products and services, occupiers are rationalising their use of space, seeking to restructure leases, sub-let excess space or upgrade to better premises that will enhance overall business operating efficiency, the report says.

The quality and flexibility of buildings are also key influences on corporate costs and efficiency. The report found that well located properties with the greatest potential for flexibility and adaptability are enticing occupiers and pushing demand for efficient buildings. Many companies, even in mature markets, still operate from outdated premises, further fuelling requirements for more efficient industrial and logistics space, even in an environment where demand is generally slowing.