Image Credit: WAM

Abu Dhabi's industrial sector continues to thrive, with the non-oil economy growing by 9.1 per cent. Real GDP increased by 3.1 per cent in 2023 compared to 2022, according to the latest report from the Statistics Centre of Abu Dhabi (SCAD).

Small and Medium-sized Enterprises (SMEs) make up about 98 per cent of businesses in the emirate, employ over 46 per cent of the workforce, and contribute more than 42.8 per cent to Abu Dhabi's non-oil GDP.

The report from the Abu Dhabi Department of Economic Development (ADDED) noted a 51.5 per cent increase in industrial licenses issued in 2023 compared to 2022, and a 3.5 per cent rise in new economic licenses issued in 2023. The total capital of newly licensed companies exceeded Dh210.7 billion or $57.3 billion, driven by strong non-oil sector growth.

The manufacturing, oil and gas, and Third-Party Logistics (3PL) sectors are the primary drivers of demand. In 2023, the manufacturing sector contributed over 12 per cent to the non-oil GDP and 9 per cent to the overall GDP, with added value from manufacturing activities reaching Dh101 billion. The oil and gas sector contributes 46.6 per cent to the GDP, while the e-commerce sector is rapidly expanding due to growing domestic consumption.

In the first three months of 2024, leasing activity in Abu Dhabi concentrated in ICAD, Mussafah, and KEZAD.

Construction is underway for nearly a million square feet of space across Musaffah, ICAD, and Al Markaz, slated for completion in 2024. KEZAD Group is investing Dh621 million to develop over 250,000 square meters of warehousing capacity, set to be operational by the end of 2025. Additionally, Aldar is expanding its logistics asset, ADBH, by 33,000 square meters, with full occupancy by Etihad, Mubadala, and Twofour54.

During Q1-2024, the demand for quality assets and increasing leasing activity and inquiries propelled rental growth in Abu Dhabi. Rents across the city rose by 2 per cent quarter-on-quarter, with high-specification assets in ICAD 1 and KEZAD experiencing a substantial 14 per cent year-on-year rental growth.