Major Boost for Real Estate Sector in Saudi Arabia through Saudi industrial strategy


Middle East’s largest economy Saudi Arabia is planning big to support the spurred demand for real estate projects in the kingdom by providing aid of 100 billion riyals (Dh97.93bn). This would help to grow its logistics, mining and energy sectors and also would support establish the special logistic zones to attract the business.

According to the CBRE’s Saudi Arabia Industrial and logistics white paper, the kingdom has several projects fixed in the loop that would support them in their mission to surge the amount of high-quality industrial stocks for all the investors and end users.

Few of the coveted logistics zones and projects are: –

•  Tharwat Logistics City north of Riyadh.

•  Asfan Smart Industrial City 2 in Jeddah spanning a 5 million square metre.

•  Riyadh Integrated Logistics Bonded Zone near King Khalid International Airport.

•  King Salman Energy Park that would fulfil the kingdom’s vision to become a global energy hub.

•  Sulay Industrial Area and

•  Al-Mishal Industrial Area.

According to words quoted by Simon Townsend, general manager for KSA, and head of the strategic advisory for CBRE, “Saudi Arabia has a lot potentiality amongst the entire Middle East region that supports its ambition to emerge as one of the most sought global logistics hubs.”

This real estate boom will support and provide various opportunities for foreign direct investments through the investors who wish to enter the kingdom’s vast marketing arena. As a prime centralised location, it supports optimal distribution to GCC countries, North-East African countries and Mena regions. It also equally benefits the Asia-Europe trade route and bolsters the trading culture in that region.

During January, the kingdom unveiled National Industrial Development and Logistics Programme (NIDLP)- A core strategy with following aims:-

•    Spend allocated 100billion riyals in 2019-2020 to break off from depleting oil revenues.

•    Create a job space of 1.6 million to support the best talents and enhance the job market.

•    To attract 1.6 trillion of in-house investments within 2030, with ample support from 42 innovative initiatives intended to stimulate local activity in sectors including mining, logistics and energy.

•    Aimed to promote government’s vision 2030’s economic diversification agenda.

•    Creating proper logistics park and zones as a NIDLP vision promoting investment opportunities worth 7Bn Riyals thus having a positive vibe for industrial and logistics real estate across the kingdom during short- and medium-term period.

Mr Townsend also emphasised that the importance and regions e-commerce boom will spur the growth of alternative industrial products. Meanwhile, emerging disruptive technology boom viz Self-driven autonomous vehicles, robotics, Automation, Artificial Intelligence (AI) and VR (Virtual Reality) will also cast an impact on the spacing and distribution requirements.

According to the report by CBRE, Riyadh, Jeddah and Damman are the three most critical vast landscapes in Saudi Arabia.

Riyadh has close to a massive 70 million square metres of the overall floor area of key industrial space that includes Riyadh Industrial City 2, As Sulay Industrial Area and Al Mishal Industrial Area while Jeddah and Damman have overall 65 million square metres and 28 million square metres of space.

Apart from various Industrial projects, real estate boom in Saudi Arabia is dominated by multiple hospitality sector projects, construction of tall high rise buildings, roads and pipelines, causeways, cross border link roads, Oil and Metal refineries, Mining and Energy Industries etc.