Manrre Fund
The promoters of Manrre Logistics Fund, including Manohar Lahori, with senior Nasdaq Dubai officials at the listing of the fund. Image Credit: Gulf News Archive

Dubai: The surge in online sales is not hurting all types of brick-and-mortar. In fact, there’s one category – warehousing and logistics – that’s is doing quite well because of it.

“For every $1 billion added in new ecommerce sales, there’s a need for a further 1.25 million square feet of industrial real estate,” said Zachary Cefaratti, CEO, Dalma Capital Management. “That’s exactly what’s happening in the UAE/Gulf.”

According to Dalma projections, the Gulf markets could generate between $2.7 billion to $4.5 billion in ecommerce sales growth until 2022. That, in turn, would create the need for 3.5-5.7 million square feet of industrial real estate.

The UAE’s ecommerce is expected to hit the $27 billion mark in another two years from $19.7 billion now.

Digital appetite

The digital economy is also feeding different types of industrial real estate.

The Manrre Logistics Fund, which on Tuesday went in for a private listing on Nasdaq Dubai and has raised more than $70 million, has been busy picking up commercial real estate. This includes a facility that operates a cloud kitchen in Dubai’s JLT cluster, another growth area within the wider digital economy.

“The “dark kitchen” concept and last-mile logistics is what’s driving industrial real estate,” said Manohar Lahori, Chairman of Palmon Group, and chief promoter of Manrre Logistics Fund.

Dark kitchens are off-site locations where food gets prepared for multiple restaurant operators and to serve the exponential growth in the food delivery market.

A preference for industrial

The Manrre Fund has picked up 8-10 million square feet of industrial space in the recent past, half of which is in Dubai.

The Nasdaq Dubai listing will give it access to institutional investors, and that’s how the fund promoters intend to keep it, at least for now. Minimum investments are pegged at $50,000.

“Going for retail investors is not our intention at this stage,” said Lahori. “This is a private listing on Nasdaq Dubai, and it was intentional to keep it that way.”

Real estate funds

Specialist real estate funds in the UAE have not been having a good time of it over the last two years. The steady decline in property values, in both commercial and residential, has been hurting yields.

According to Lahori’s Manrre’s overwhelming focus on industrial real estate, including those in free zones, insulates it against the downturn.

Listing strategy
Manrre Logistics Fund, which launched in 2018, deposited its shares in Nasdaq Dubai’s CSD (Central Securities Depository), which looks after them on behalf of shareholders. The CSD also facilitates share transfers between investors.
Launched by Dubai-based Palmon Group, the Manrre fund is managed by Dalma Capital. Manrre focuses mainly on institutional-grade logistics and industrial properties in locations including JAFZA, Dubai Investments Park and Dubai South.