Saudi Logistics CEES CESE to record highs as tech and retail areas cut through shrinking space – Report
The need for specialized Logistics facilities such as cold storage facilities and data centers is driving record growth in the industrial sector of Saudi Arabia, which is located close to New Supply, a new report has found.
According to Knight Frank’s Saudi Arabia Industrial Market Review and Autumn 2025More than 1.3 million square meters of new warehouses were delivered in the first quarter, but industrial taxes in Riyadh rose year-on-year by 208 square meters, the report said. Occupancy in the capital stands at 98 percent, reflecting continued demand from tech giants and retailers expanding their Gulf operations.
“Despite this influx of new supply, average rental prices in Riyadh, Jeddah and the Dammam Metropolitan Area have risen significantly,” said Famal Durrani, partner and Head of Research, Mena at Knight Frank.
Saudi Arabia’s Logistia Sector Hits New Heights
Technology and e-commerce technology giants, including Google, Oracle, Huawei, Apple and Shein have helped reshape the landscape. The exclusive 3 Million Meters Legis Logisting Zone at King Sallman International Airport has become a magnet for foreign employers, with regions such as Taibah forecast to grow by three percent in the next three years.
This comes four years after Saudi Arabia launched its headquarters, which requires multinational companies to seek government contracts to establish their base in the Middle East in the Kingdom.
Riyadh, which is home to the Main Logistics Area, saw a total increase of 3.5 percent to 28.9 million square meters while industrial and logistics space expanded to 16.2 million square meters.
Jeddah maintained a strong momentum, overwhelmed by 8 percent and occupied by 97 percent. The city’s industrial growth is supported by DP’s global investment in South Chibhion at the South Disetoner terminal, which doubles as the Port
On the gulf coast, the average prices in dammam have increased by 9 percent to SAR 231 per square meter with an optical at happening of 96 percent as today’s space continued to receive supply. While 2 million square meters
The expansion of Saudi Arabia’s industries is considered by Vision 2030 and related national strategies that aim to increase the GDP and Double Industrial Extrovent industries from 757 percent in 6 years to 10 percent in the same period.
Government reforms that include the extension of the 10 percent white World Land tax on Induced Industrial and Commercial Property are intended to discourage land banking and accelerate the release of used development areas.
The Kingdom issued 585 new industrial licenses in the first half of 2025, attracting SAR 13.5 billion in capital investment. The total number of licensed Factories has reached 12,840 with 36,000 details in the year 2035, according to Knight Frank.
Foreign investment continues to flow into large industrial and material projects. Notable developments include PIF and the new PIF and Hyundai plant
“Saudi Arabia’s industrial sector is in a phase of dynamic growth driven by austerity policies and significant foreign investment,” said Amar Hussain, foreign partner – research, Mena at Knight Frank.
“The rapid rapid growth in all three major cities points to a fundamental change in the market, moving away from the old stock towards modern institutions specialized in the future of the State as a world industrial leader.”
