Demand climbs for Aviation City

Dubai:  A full chain of aviation services is in demand at Dubai World Central, despite the project being capable of handling just cargo and logistics operations this year.

The planned Aviation City within Dubai World Central (DWC) will be a centre for aviation manufacturing, maintenance, repair and overhaul (MRO), aviation support services and consultancy, research and development, training and fixed based operator services.

In one go, DWC customers are demanding general aviation operations for fit out of jet aircraft in Aviation City, training academy, warehouse facility in logistics city and airside warehouses.

"We don't have those kinds of facilities available yet, so we have to build them. But the demand is very high for that particular type of product," Michael Canon, chief commercial officer for DWC told Gulf News.

While being capable of providing logistics storage facilities, and office space along with airfreight operations since the opening of the cargo terminal at Al Maktoum International - Dubai World Central, other projects are still under various stages of development.

The infrastructure contract was awarded last year. "At least Dh500 million has come into the Aviation City from external investors," Khalifa Al Zafein, executive chairman of Dubai Aviation City Corporation — Dubai World Central, said.

Infrastructure tenders for the MRO facility and academy have already gone out. Canon said that over 40 companies have shown interest and over nine contracts for MROs and FBOs (fixed based operator) have been signed.

"It's taking off. Customers want to be in Dubai World Central…the prospects are really good," Canon said.

Currently, a team of advisers is working with private equity, banks and Dubai government to work out packages that will fit the demand. "It's a complex equation that we have to figure out," he said.

Meanwhile, office space will soon be handed over and demand is already taking the additional space off the market. "We have seven companies who are ready to fit out one of the buildings and putting in service offices," Canon said, adding that contractors will hand over two of the ten buildings by September this year, while the rest will by year-end to February 2011.

Real estate market

Segmented demand in the Dubai real estate market is still more than the supply. "If you see, where can you get high quality, large square footage facility with one landlord, that excess capacity drops. If you want all that next to an airport, it falls even further," Canon said. "Then if you're looking for such a facility that also has port logistics to it, chances are that it's Dubai World Central. The market is beginning to see that."

About 72 per cent of the plots within Dubai Logistics City have been leased, and logistics operators are busy building facilities on them. The likes of Kuen Nagel and Aramex are among the investors in the logistics part of DWC.

For cargo operations to be at full capacity, Canon said, "It's going to require passenger flights, and passenger flights that bring in passengers to and from destinations that reflect the current profile of transportation in Dubai. It will require the belly space of aircraft that bring people in, to move the cargo efficiently."