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Arabian Business
29-04-2025
- Business
- Arabian Business
Saudi warehouses hit 98% occupancy amid industrial boom
Saudi Arabia's industrial and logistics property market is approaching full capacity, with warehouse occupancy reaching 98 per cent in Riyadh and 97 per cent in Jeddah, according to a new market review published by Knight Frank on Tuesday. The property consultancy's Saudi Arabia Industrial and Logistics Market Review shows the Kingdom's push towards becoming the Middle East's leading industrial hub is driving rapid growth in the sector, with 1,346 new industrial licences issued in 2024 and capital investment in newly licensed factories reaching SAR 50 billion. Warehouse space in Riyadh has seen the Kingdom's steepest rental growth, with average rates jumping 16 per cent year-on-year to SAR 208 per square metre, while prime properties now command over SAR 250 per square metre. Some districts, including Al Masani, Al Bariah, Al Faruq and Al Manakh, experienced even sharper increases exceeding 20 per cent. 'Leasing activity remains strong across most of Riyadh's submarkets, with demand continuing to outpace supply despite elevated rents,' said Faisal Durrani, Partner and Head of Research for MENA at Knight Frank. Jeddah's market showed similar trends, with average rents reaching SAR 238 per square metre and the Al Khomrah district maintaining its position as the city's dominant logistics hub, accounting for approximately 82 per cent of the port city's total warehouse stock. The report identifies several drivers behind the sector's growth, including government initiatives like the National Industrial Development and Logistics Program (NIDLP), which aims to increase the transport and logistics sector's contribution to GDP from 6 per cent in 2021 to 10 per cent by 2030. New Special Economic Zones (SEZs) and foreign direct investment reforms are also attracting international businesses, with significant deals struck in 2024 including partnerships between Saudi property developer Kaden and global logistics provider DB Schenker, as well as agreements involving GFH Financial Group, Panattoni Saudi Arabia, Arcapita Group Holdings, and Saudi firm Rikaz. 'Saudi Arabia remains a pivotal hub for global business expansion, with the Kingdom continuing to attract interest from around the world,' said Adam Wynne, Head of Commercial Agency at Knight Frank. According to the report, the number of licensed factories in Saudi Arabia is projected to increase from 12,895 to 36,000 by 2035, with sustainability emerging as a major market driver as companies like Maersk and Agility Logistics pioneer green infrastructure initiatives.
Asharq Al-Awsat
28-03-2025
- Business
- Asharq Al-Awsat
Rise in Non-Oil Exports Strengthens Saudi Arabia's Economic Diversification Efforts
Saudi Arabia's non-oil exports continued their upward trajectory, reflecting the Kingdom's ongoing efforts to diversify its economy. According to data from the General Authority for Statistics (GASTAT), non-oil exports, including re-exports, grew by 10.7% in January, while excluding re-exports, they increased by 13.1%. The International Trade Statistics Bulletin for January, published by GASTAT, reported a 2.4% growth in Saudi Arabia's total merchandise exports compared to the same period last year. Meanwhile, oil exports saw a slight decline of 0.4% in January. The share of oil exports in total exports also dropped from 74.8% in January 2024 to 72.7% in January 2025. This increase in non-oil exports is a positive indicator of the success of Saudi Arabia's economic policies in diversifying income sources beyond oil, according to Dr. Abdullah Al-Jassar, a member of the Saudi Association for Energy Economics. Speaking to Asharq Al-Awsat, Al-Jassar emphasized that this growth did not happen by chance but was the result of a comprehensive strategy to develop the manufacturing sector, which has become a key driver of the non-oil economy. Notably, chemical industry products accounted for 23.7% of total non-oil exports. He also highlighted that major improvements in logistics infrastructure, supported by the National Industrial Development and Logistics Program (NIDLP), have enhanced export efficiency and strengthened the connection between Saudi-made products and global markets—solidifying the Kingdom's position as a key trade hub. China: A Key Trade Partner According to the latest data, China remains Saudi Arabia's top trading partner, accounting for 15.2% of the Kingdom's total exports, while imports from China made up 26.4% of total imports. This underscores Saudi Arabia's strong presence in Asian trade, Al-Jassar noted. Imports and Trade Surplus Despite an 8.3% increase in imports, the trade surplus declined by 11.9%. However, Al-Jassar explained that this decline should be viewed within the broader context of Saudi Arabia's structural economic transformation. The rise in imports is largely driven by an increase in production inputs that support industrial expansion rather than consumer goods. Economic policy expert Ahmed Al-Shihri told Asharq Al-Awsat that the 10.7% growth in non-oil exports reflects the success of investments in industrial sectors, particularly the chemical industry, which accounted for 23.7% of non-oil exports. This growth indicates an improvement in production capacity and international competitiveness. 'The increase in non-oil exports is driven by enhancements in industrial infrastructure, government support for the private sector, and rising global demand for Saudi non-oil products. This shift reduces the Kingdom's dependence on oil as the primary revenue source, making the economy more resilient to fluctuations in oil prices. Furthermore, the rise in the ratio of non-oil exports to imports—from 35.7% to 36.5%—suggests a healthier trade structure that supports long-term economic sustainability,' Al-Shihri added. Vision 2030 Saudi Vision 2030 continues to drive non-oil sector growth through various initiatives, including enhancing local content, boosting exports, attracting foreign investments, and expanding economic and logistics zones. Al-Jassar believes that the continuation of these strategies will establish Saudi Arabia as an emerging export powerhouse in the coming years, further strengthening its global economic standing.
