RIYADH: According to Knight Frank, the industrial and logistics sector in Saudi Arabia is expanding, with warehouse occupancy rates approaching saturation and rental costs in Riyadh rising by 16% annually. According to the company’s most recent “Saudi Arabia Industrial and Logistics Market Review,” the industry is expanding due to the growth of e-commerce, strategic government initiatives, and an increase in foreign investment.
Riyadh, Jeddah, and the Dammam Metropolitan Area, the Kingdom’s logistical centres, are running almost at capacity. With an occupancy rate of 98 per cent, Riyadh is in the lead, followed by Jeddah and Dammam, all of which have an occupancy rate of 97 per cent. Abu Dhabi’s occupancy rates also reflected this trend, with the city’s logistics and industrial markets operating at nearly full capacity, mirroring Dubai’s limited supply.
According to a second Knight Frank research, significant infrastructure developments and expanding manufacturing activity drove sustained demand in key hubs including Khalifa Economic Zones Abu Dhabi and Abu Dhabi Airports Free Zone. Prime warehouse space in Riyadh is currently renting for more than SR250 ($66.6) per square metre, whereas the average for the entire city is SR208.
The premium Asfan neighbourhood maintained 100% occupancy at SR 387 per square metre, while Jeddah’s Grade B facility leasing prices increased to SR 238 per square metre. Rents in the Dammam Metropolitan Area increased 14.8% to SR202 per square metre due to a persistent lack of high-quality logistics space.
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