Jafza begins construction work on logistics park as demand for warehouses grows

Jebel Ali Free Zone held a ground-breaking ceremony for the first phase of its new Jafza Logistics Park, which is scheduled for completion next year. Courtesy: Jafza Courtesy: Jafza

Dubai’s Jebel Ali Free Zone (Jafza), one of the biggest trading hubs in the region, has started construction of its Jafza Logistics Park as demand for warehousing units continues to increase due to the e-commerce boom fuelled by the Covid-19 pandemic.

The Jafza Logistics Park is scheduled for completion next year, the free zone said in a statement.

The purpose-built trading and logistics development will accommodate the growing number of warehousing, processing and logistics activities carried out in Dubai, Jafza said.

“We recognise the critical role the logistics sector plays in enabling the growth of various industries around the globe,” Abdulla Bin Damithan, chief executive and managing director of DP World UAE and Jafza, said.

“As the UAE continues to grow into a global processing and re-distribution gateway, we have experienced a significant spike in demand for the logistics and warehousing space. We are building the Jafza Logistics Park in response to this increase in demand and to further boost the development of the UAE’s logistics sector.”

The UAE’s e-commerce market is forecast to increase by 60 per cent from 2021 to more than $8 billion in 2025, according to a report by EZDubai, an e-commerce zone in Dubai South, and Euromonitor International.

The country is also ranked among the top three logistics centres in emerging markets, after China and India, in the latest Agility Emerging Markets Logistics Index, that rates countries for overall competitiveness based on their logistics strengths, business climates and digital readiness.

The UAE, the Arab world’s second-largest economy, is investing heavily in developing infrastructure and building the transport network to drive the growth of the logistics sector.

New projects include Dh50bn of investment in a railway network for transporting goods and passengers across the UAE, which builds on the first phase of Etihad Rail. Abu Dhabi is also investing significantly in ports and integrated industrial zones, including Kizad and the Industrial City of Abu Dhabi (Icad).

Aldar Properties, the biggest developer in Abu Dhabi by market value, set up a logistics business line this week after acquiring a 70 per cent stake in Abu Dhabi Business Hub.

Jafza Logistics Park covers a total leasable area of more than 46,000 square metres, of which 87 per cent will be allocated to warehousing and the remaining space for office facilities, the statement said.

Customers will be allowed to consolidate multiple units to meet their space requirements, Jafza said.

“Logistics companies in e-commerce and similar growing segments can benefit from the park’s offerings, including digital trade enablement, competitive costs and customisable units,” Mr Bin Damithan said.

“We are in discussions with a number of large customers that need 60 per cent to 80 per cent of the space and may need to commission phase two ahead of schedule.”

Jafza’s logistics cluster is home to more than 460 companies from 30 countries. The new logistics park will support their growth aspirations as well as attract new players seeking to establish themselves in the market, according to the statement.

Businesses operating from Jafza Logistics Park can leverage DP World’s logistics solutions. The park’s location between Jebel Ali Port, Al Maktoum International Airport and Etihad Rail’s Jebel Ali station “will facilitate efficient and seamless flow of goods within the region and across the world”, Jafza said.