Arcapita Group Holdings is currently managing $1bn of industrial real estate assets, making it one of the largest industrial real estate platforms in the GCC region.
The firm is expected to double its GCC logistics assets under management by 2025 to reach $2bn.
Arcapita embarked on its GCC industrial strategy in 2010 by establishing a series of portfolios and funds dedicated to industrial assets.
Arcapita industrial assets
The firm grew its assets under management, by acquiring a diversified base of properties tenanted by a wide range of occupiers including blue-chip international companies, regional leaders, and local players.
Today, Arcapita’s logistics real estate portfolio, principally across Saudi Arabia and the UAE, consists of a combined built-up area of more than 3.5 million sq ft across more than 30 properties, leased to over 80 tenants.
Arcapita’s latest report on the Kingdom’s logistics ecosystem highlights the growing demand for industrial real estate assets underpinned by an estimated growth in e-commerce of 21 per cent from 2022 to 2027.
The report outlines the supply-demand mismatch in Saudi for industrial real estate evidenced by the strong levels of occupancy and year on year growth rates posted across the three main cities of Riyadh, Jeddah and Dammam, based on 2023 Knight Frank research.
These fundamentals are also supported by a clear flight to high quality, with a growing number of international occupiers setting higher construction requirements and specifications for industrial facilities that align with international standards.
In Riyadh, the industrial and logistics spaces are mainly concentrated in the south of the city, however, the recent urban expansion in the north and north eastward regions is propelling e-commerce and 3PL players to expand their presence in the new urban centres.
Similarly, Jeddah is witnessing demand influx mainly from e-retailers given the city’s strategic location with maritime access to 260 ports across multiple continents.
Accordingly, investors and developers will need to address the increased demand in both regions and the current supply shortage.
Saudi’s plans to transform the logistics ecosystem with the recently launched “Master Plan for Logistics Centres” as part of the Kingdom’s broader National Transportation and Logistics Strategy aims to grow the logistics sector and enhance international trade networks within the country and attract global supply chains.
The master plan aims to develop more than 100 million sq m across 59 logistics centres.
Yousif Al Abdulla, Managing Director and Head of MENA Investment at Arcapita, said: “Industrial real estate, and logistics in particular, present a compelling opportunity for investors to contribute to the Kingdom’s vision, especially given that the logistics sector sits at the heart of Vision 2030.
“With our extensive experience in Saudi Arabia over the years, Arcapita is well positioned to be at the forefront of the growth opportunity, and our new investments will add significant value to our investors and clients.”
Over the past 25 years, Arcapita has managed approximately $6bn in industrial and logistics real estate transactions globally, including $1bn in the GCC region.
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