The growth of e-commerce and local economic diversification efforts is driving an increased demand for warehouses in the UAE and Saudi Arabia, leading to a surge in investments in this sector.
Arcapita, a Bahrain-based alternative asset manager, aims to elevate its logistics portfolio in the two largest Arab economies to $2B in the next two to three years, up from the current $1B, according to its CEO, Atif Abdulmalik. The company presently owns logistics assets worth $500M in Dubai and another $500M in Saudi Arabia, with plans to double the total asset value by 2025.
E-commerce Boom Fuels Warehouse Demand
The e-commerce market in the GCC region is expanding, contributing to the growing demand for warehouses. The UAE’s e-commerce market is projected to reach $9.2B in 2026, a nearly 92% increase from 2021.
Knight Frank’s latest report indicates that international investments are further fueling demand for warehouses, according to The National News.
Dubai, facing a shortage of warehouses, is witnessing increased demand, with the logistics sector accounting for 44% of new requirements in the first nine months of the year.
Saudi Arabia, as part of its National Transport and Logistics Strategy, plans to develop 59 logistics centres across the kingdom to become a global logistics hub, contributing to the surge in demand for warehouse space.
The focus on food production and processing industries in the UAE and Saudi Arabia, aimed at boosting food security and reducing reliance on imports, is also driving the need for specialized warehousing facilities, such as cold storage.
Arcapita, having completed over 100 transactions worth more than $30B, intends to maintain its focus on industrial and logistics, business services, and rental housing as integral components of its investment strategy.
