Latest news with #Bahrain-headquartered
19-05-2025
- Business
Investcorp-led consortium to invest $550mn in Port of Duqm expansion
Muscat – Investcorp, a Bahrain-headquartered leading global alternative investment firm, has announced that its infrastructure platform has signed a cooperation agreement to invest in a $550mn infrastructure project at the Port of Duqm. Investcorp Aberdeen Infrastructure Partners (AIIP) – a joint venture between Investcorp and Aberdeen plc – will be a shareholder in the expansion project, alongside the Port of Duqm Company, the DEME Group and Port of Antwerp Bruges (which have jointly formed a consortium named CAP INFRA), according to a press statement issued by Investcorp. This investment is closely aligned with AIIP's mandate to invest in long-term concessions across the GCC countries and the broader MENA region, and with its strategy to develop long-term partnerships with key industry players, such as the Port of Duqm Company and CAP INFRA. The new infrastructure at the Port of Duqm marks AIIP's fourth investment commitment, following ADNOC's Project Wave in the UAE and two infrastructure concessions for social and public assets in Saudi Arabia. As part of the Duqm Port's marine infrastructure works, dredging and construction of a new quay wall are planned, which will serve a new low-carbon industrial plant within the Special Economic Zone at Duqm. The plant aims to produce low CO₂ iron metallics products and, ultimately, hydrogen-powered steel, or green steel. The port expansion and eventual establishment of a green steel plant align with Oman's Vision 2040 and the nation's commitment to sustainable infrastructure development. Investcorp noted that the opportunity to invest in the project followed a competitive process, with AIIP securing the mandate ahead of four other parties. The company acknowledged that the Port of Duqm serves as a crucial gateway and transit point for global trade and commerce, reinforcing its role as a strategically important infrastructure asset in Oman. Benefitting from a prime central location on the Omani coastline, the port functions as a multipurpose hub, handling container shipments, dry and liquid bulk, and general and bagged cargo. Mohammed Alardhi, Executive Chairman at Investcorp, said, 'The Port of Duqm is one of the most strategically important seaports in the world. We are pleased to be investing not only in one of Oman's largest infrastructure projects, but in Oman's Vision 2040, contributing to the goal of achieving carbon neutrality by 2050.' Sami Neffati, Managing Partner of AIIP, said, 'We are delighted to partner with the Port of Duqm Company and CAP INFRA to expand this important shipping hub and further secure trading routes to and from the region. Securing this transaction demonstrates our ability to offer investors access to unique opportunities. We are very excited about the region's infrastructure prospects.' Reggy Vermeulen, Chief Executive Officer of Port of Duqm Company, said, 'We are proud to partner with a strategic foreign direct investment from AIIP, a renowned global investment group, to support the development of the port's infrastructure. This investment is a strong vote of confidence in the Port of Duqm's vision and future. It reflects the trust of international partners in our growth story and in Oman's broader economic ambitions under Vision 2040. 'Through this opportunity, we will not only increase capacity but also advance sustainable industry by supporting future-facing projects like green steel production.' Investcorp manages approximately $55bn in assets, including assets managed by third-party managers. The firm has 14 offices in the US, Europe, the GCC and Asia, including India, China, Japan and Singapore.
Zawya
18-04-2025
- Business
- Zawya
Saudi logistics boom lures international investors amid economic reforms
Saudi Arabia's logistics and warehouse sector is undergoing rapid transformation, fueled by sweeping economic reforms under Vision 2030, surging e-commerce activity, and growing investor confidence. With more than 1 trillion Saudi riyals ($267 billion) in investments planned by 2030 and SAR200 billion already deployed, the Kingdom is positioning itself as a regional and global logistics powerhouse. Data from the General Authority for Statistics shows the number of logistics hubs in the country has jumped 267 percent since 2021, reaching 22 centres by the end of 2023. These hubs span over 34 million square metres (sqm), a reflection of the sector's rapid infrastructure expansion. Isa Al Khalifa, director of MENA real estate at Bahrain-headquartered international asset management firm Arcapita pointed out that the Kingdom's investor-friendly initiatives differentiate it from other Gulf markets. These include Special Economic Zones offering tax incentives, eased foreign ownership restrictions, and simplified business licensing procedures. Al Khalifa added that the government has extended significant funding support through entities like the Saudi Industrial Development Fund (SIDF) and the Saudi Authority for Industrial Cities and Technology Zones (Modon). "It also includes Public-Private Partnerships (PPPs) through MOT (Ministry of Transport) that enable private investors to properly navigate the investment landscape and gain access to unique investment opportunities," he said. He pointed out that the easing of foreign property ownership restrictions is also making direct investment in logistics assets more accessible. The company had previously told Zawya Projects that it is doubling down on Saudi logistics and warehouse sector. Riyadh at the forefront The Kingdom's regulatory support is being complemented by steady market demand, as industrial and logistics rents in Riyadh and Jeddah continue to edge up, supported by economic diversification and the growth of e-commerce. National warehouse occupancy stood at 97 percent by mid-2024, according to real estate consultancy Knight Frank, pointing to a tightening supply of quality logistics space. Riyadh remains at the centre of this expansion, with warehouse and logistics stock reaching 28 million sqm as of the first half of 2024 with an additional 820,000 sqm under construction, according to Knight Frank. The capital also accounted for more than half—52.9 percent—of the Kingdom's 12,451 warehouses, covering around 10.6 million sqm as of first half of 2024. "As of now, there's a fair bit of supply gap in Riyadh as well as the larger Saudi market. It's driven by consumer-centric sectors like e-commerce, FMCG, retail, and manufacturing, alongside the ongoing giga projects," said Abhishek Mittal, head of industrial advisory, MEA at JLL. He said demand is definitely outpacing supply, especially 'when it comes to good quality Grade A warehouses." "There's very limited vacancy in good Grade A boxes — you can count Grade A supply on your fingers in terms of organised development. There's the Agility Logistics Park, The Logistics Park by Kaden, and most others are either build-to-suit facilities or smaller, less scalable spaces," he said. To alleviate some of this supply strain, new developments are being launched. "There's the SILZ (Special Integrated Logistics Zone Company), which has been announced, and new projects are expected in the South and East of Riyadh. These developments should ease some of the supply constraints over the next 12 to 18 months," Mittal noted. Rising rents Rising warehouse rents are both a sign of market strength and a challenge for occupiers. In Riyadh, rents have jumped more than 10 percent over the past year to reach SAR 210/sqm, with occupancy hovering around 97 percent. Matthew Green, head of research at CBRE MENA, acknowledged the rising cost pressure. "This rise in costs could indeed drive businesses to explore more affordable locations within the Kingdom," he said. Still, Green pointed out that relocation decisions are complex and depend on factors like proximity to markets, infrastructure, and access to labour. 'While some companies will relocate, many will stay in Riyadh due to the developed logistical networks within the city," he said. Mittal added that many occupiers are exploring alternative options in satellite markets like Sudair and Al Kharj. 'Some occupiers are moving into Grade B developments temporarily, waiting it out until new Grade A supply hits the market," he said. Jeddah is emerging as another logistics hub, with 19.6 million sqm of warehouse and logistics stock. Major projects such as Maersk's logistics park and Aramex's new facility at Jeddah Islamic Port have further strengthened the city's logistics profile. Located along critical global shipping routes, Jeddah serves as a strategic transshipment point. Average lease rates in the city have reached SAR 208/ sqm, with occupancy levels mirroring Riyadh at 97 percent, according to Knight Frank. Jeddah also leads the Kingdom in terms of total logistics footprint, with five logistics centres covering a combined 20 million sqm—the largest in the country. Foreign interest rises Saudi logistics sector has attracted both regional and international investors, with Green noting that demand for quality warehousing in Riyadh is 'reflective of the country's booming non-oil sector and rising population,' which has, in turn, fueled the growth of key occupier segments such as e-commerce and its associated logistics needs. He also emphasised that the growing momentum has prompted greater collaboration between local and international stakeholders. "Joint ventures, knowledge transfer, and technology sharing can help combine expertise and capital with local market knowledge and land access, accelerating the development of modern facilities," he said. Green cited the SAR 2 billion partnership between GFH and Panattoni Saudi Arabia as an example of deepening private sector participation in the Kingdom's logistics sector. The project aims to develop 500,000 sqm of logistics space across Riyadh, Jeddah, and Dammam—including a 50,000 sqm logistics park in South Riyadh—where GWC is set to be a major tenant. Mittal also noted a rising number of joint ventures being formed between local and foreign developers. 'Even if it's not strictly foreign, regional developers are coming in," he said. "Players like GII, which are UAE-based but expanding into Saudi, and Panattoni, who have publicly announced their plans to enter the market, are increasing their warehousing presence here." Al Khalifa of Arcapita reiterated the appeal of the sector, noting that 'Saudi Arabia's logistics and warehouse sector stands out as a compelling asset class due to a combination of strong macroeconomic fundamentals, government-backed initiatives, and favorable market dynamics.' He highlighted Vision 2030 as a major driver, noting its focus on transforming the Kingdom into a global logistics hub. "This includes significant investments in infrastructure, such as new ports, airports, road networks, and special economic zones (SEZs) designed to attract foreign investment," Al Khalifa added. These strategic shifts are translating into robust capital flows. According to the Saudi Industrial Development Fund, loans exceeding SAR 180 billion have been issued to more than 4,000 projects, with total investments approaching SAR 700 billion. The National Industrial Strategy aims to raise industrial exports to SAR 557 billion by the end of the decade. Arcapita, for its part, recently signed a strategic partnership with King Abdullah Economic City (KAEC) to develop modern industrial facilities. According to the company, the move aligns with its broader investment strategy, which prioritises the development of high-quality logistics and industrial assets to fill supply gaps and improve operational efficiency. As Vision 2030 continues to gather pace, Saudi Arabia's logistics sector is poised to play a central role in diversifying the economy and attracting global capital—making it one of the most dynamic components of the Kingdom's non-oil growth story. (Reporting by SA Kader; Editing by Anoop Menon)
Zawya
11-04-2025
- Business
- Zawya
Arcapita doubles down on Saudi logistics market with focus on high-growth assets
Bahrain-headquartered international asset management firm Arcapita is doubling down on Saudi Arabia's logistics and warehouse sector, which is emerging as a top asset class driven by strong macroeconomic fundamentals, government-backed initiatives, and favourable market dynamics. Isa Al Khalifa, director of MENA real estate at Arcapita told Zawya Projects that the company's logistics investment strategy in Saudi Arabia is driven by three key factors: market fundamentals, tenant demand, and strategic partnerships. 'We focus on assets that align with high-growth areas, including built-for-purpose logistics facilities in key industrial zones,' he said in an interview. The firm recently partnered with King Abdullah Economic City (KAEC) as part of its broader Saudi strategy, reinforcing its focus on ESG-compliant industrial properties. With more than $1 trillion in projects underway and government-led investment reforms, Al Khalifa noted that Saudi Arabia's logistics sector remains one of most promising segments of the Kingdom's real estate market. Investor confidence is rising, he added, fueled by sustained rental growth and demand for premium logistics assets. Excerpts from the interview: What makes Saudi Arabia's logistics sector attractive to institutional investors? Occupancy rates in key logistics hubs, such as Riyadh and Jeddah, are at near-full capacity, with prime locations seeing rates of approximately 97 percent. This supply-demand imbalance is driving rental growth and investment returns. Additionally, Saudi Arabia's growing e-commerce market, projected to reach $44 billion by 2030, is fueling demand for modern logistics assets, particularly fulfillment centres and last-mile delivery hubs. Overall, this signals strong demand, stable cash flows, and lower vacancy risk, positively shaping investor sentiment. From a financial standpoint, the stability of the Saudi riyal, supportive monetary policy, and a strong lending environment provide an attractive setting for institutional investors seeking stable, long-term returns. Are there specific sub-sectors — such as last-mile delivery hubs or cold storage — that present the most promising returns? Among the most promising sub-sectors, urban distribution centres and cold storage and temperature-controlled warehousing stand out. The rapid expansion of e-commerce is increasing demand for urban distribution facilities, particularly in Riyadh and Jeddah, where proximity to city centres is essential. Cold storage and temperature-controlled warehousing, on the other hand, are benefiting from growth in the food and pharmaceutical industries, with demand far outpacing supply. These specialised logistics assets offer attractive returns, given their critical role in the supply chain and the limited availability of high-quality facilities. Additionally, we emphasise a development-focused strategy, working closely with local partners who have deep market knowledge. This ensures that it not only identifies the right locations but also delivers assets that meet international standards while navigating local regulatory frameworks. Given rising land costs and construction expenses, how is financing structured for logistics developments in Saudi Arabia? Financing for logistics developments in Saudi Arabia is structured through a mix of debt financing, joint ventures, and fund-based investment models. Saudi banks have shown a strong appetite for real estate lending while the central bank's stable monetary policy and a gradual easing of interest rates are creating a conducive environment for structured financing. Many institutional investors, including us, have adopted a hybrid approach — leveraging a combination of equity and debt financing to optimise returns while managing risk. Joint ventures with local developers and government-backed entities provide access to strategic land parcels and financial incentives. Innovative funding structures, such as logistics-specific funds, have also gained traction. For example, we recently closed a fund in Saudi Arabia, which is dedicated to developing a pipeline of warehousing assets in high-demand areas. These models allow investors to pool capital, mitigate risks, and capitalise on Saudi Arabia's long-term logistics growth story. How does Saudi Arabia's logistics investment landscape compare to the UAE or other Gulf markets? While the UAE has long been a dominant player in the Gulf's logistics sector, Saudi Arabia presents a unique and increasingly compelling investment opportunity. The Kingdom's logistics sector is in a high-growth phase, supported by Vision 2030's national strategy to develop it into a global logistics hub. One of Saudi Arabia's major advantages is its sheer scale — it is the largest economy in the region, with a young and growing consumer base fueling e-commerce expansion. The Kingdom's strategic location along key global trade routes, handling 12 percent of global container trade, further enhances its logistics appeal. While the UAE remains a critical logistics hub with advanced infrastructure, Saudi Arabia's combination of strong demand, government-backed incentives, and a rapidly expanding logistics network positions it as a high-growth, high-potential investment destination. What's the strategy behind Arcapita's KAEC partnership? KAEC's Industrial Valley serves as a key economic hub, benefiting from strong connectivity to domestic and international trade routes. This collaboration underscores our commitment to delivering high-quality, ESG-compliant industrial properties. Our operating model for this initiative follows Arcapita's established investment framework — leveraging institutional capital through dedicated logistics funds, complemented by project-specific debt financing. Through structured investment vehicles, we optimize capital deployment while managing risk exposure linked to land acquisition and construction costs. This enables us to develop state-of-the-art warehousing facilities tailored to the needs of blue-chip tenants, ensuring strong demand and sustained rental growth. By collaborating with KAEC, Arcapita is strengthening its role in Saudi Arabia's industrial and supply chain transformation. This partnership not only expands our portfolio of flagship logistics assets but also reinforces our commitment to sustainability and innovation in the region's growing industrial ecosystem. (Reporting by SA Kader; Editing by Anoop Menon)
