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RIYADH: Strong demand for warehouse space saw occupancy levels reach 98 percent in Riyadh in the first half of 2025 as industrial rents increased 16 percent, according to Knight Frank.

Average industrial rents in the capital rose to SR208 ($55) per sq. meter, the consultancy’s ������Ƶ Industrial and Logistics Market Review – Autumn 2025 showed.

The surge underscores Riyadh’s growing dominance in ������Ƶ’s logistics market, as the Kingdom strengthens its industrial sector — a key pillar of Vision 2030’s aim at reducing the economy’s reliance on oil revenues. 

The Kingdom added 1.3 million sq. meters of new warehouse space in the first half of 2025, as the industrial and logistics sector recorded double-digit rental growth and near-full occupancy across major cities, Knight Frank noted. 

Faisal Durrani, partner – head of research, MENA at the company, said: “Despite this influx of new supply, average rental rates across Riyadh, Jeddah and the DMA (Dammam Metropolitan Area) have risen significantly, underscoring persistent growth in demand, especially for high-quality, modern facilities.”  

He added: “In addition to the existing supply, a substantial pipeline of serviced industrial land within logistics masterplans signals continued expansion ahead.” 

Collectively, these initiatives are strengthening industrial capacity, stimulating export growth, and creating a more resilient and competitive economic base.

Amar Hussain, associate partner, research at Knight Frank for MENA

Knight Frank said warehouse demand in Riyadh is increasingly shifting toward specialized facilities, including cold storage for pharmaceuticals and food supply chains, as well as large-scale data centers supported by the expansion of global tech giants such as Google, Oracle, and Huawei. 

Affirming Riyadh’s status as a regional industrial hub, the report added that key strategic zones — including the 3 million sq. meters Special Integrated Logistics Zone at King Salman International Airport — have attracted major international tenants such as Apple and Shein.

Significant expansion is also anticipated in districts like Taibah, where warehouse capacity is forecast to grow by 50 percent over the next three years. 

In Jeddah, occupancy rates reached 97 percent in the first half of 2025, while average warehouse rents increased 8 percent year on year. 

Growth in the port city was led by the submarkets of Al Kawthar and Al Nakheel, which saw rental gains of 18 percent and 16 percent respectively, signalling strong demand for well-connected, high-quality warehousing. 

The report also cited DP World’s SR3 billion investment in Jeddah Islamic Port, which doubled capacity at the South Container Terminal, streamlining freight flows and reinforcing the city’s role as a key regional trade link. 

The Dammam Metropolitan Area remains a strategic hub on the Arabian Gulf coast but continues to face supply shortages. Average lease rates in DMA rose 9 percent year on year to SR231 per sq. meter, while occupancy remained tight at 96 percent. 

Pipeline developments in the region include an 850,000 sq. meter logistics zone in Dammam’s Second Industrial City, expected to deliver 900 light industrial units by the end of 2025. 

“Dammam’s position on the Gulf continues to underline its importance within regional supply chains. Improved connectivity through the rail link and ongoing port expansion are expected to unlock significant potential, drawing in a new generation of better-quality industrial and logistics assets to cater to demand,” said Adam Wynne, partner, Occupier/Landlord Strategy and Solutions for the Middle East at Knight Frank. 

He added: “The market is steadily shifting toward modern, purpose-built facilities that meet the evolving requirements of occupiers.”  

Riyadh reinforced its position as the Kingdom’s main logistics hub, with warehouse stock rising 3.5 percent to 28.9 million sq. meters. Industrial and manufacturing facilities in the capital also expanded 1.4 percent to 16.2 million sq. meters. 

In Jeddah, total warehouse supply increased 1.4 percent to 20.1 million sq. meters, while DMA saw a 0.7 percent rise to 8 million sq. meters. 

In addition to the existing supply, a substantial pipeline of serviced industrial land within logistics masterplans signals continued expansion ahead.

Faisal Durrani, Partner – head of research, MENA at Knight Frank

Knight Frank said ������Ƶ’s expanding industrial market is being propelled by Vision 2030 initiatives aimed at diversifying the economy. 

The National Industrial Development and Logistics Program and the National Strategy for Industry target tripling industrial GDP and doubling industrial exports to SR557 billion by 2030. The goal is also to increase the logistics sector’s contribution to GDP to 10 percent by the end of the decade, up from 6 percent now. 

Government initiatives are reshaping the industrial landscape, including the expansion of the White Land Tax to undeveloped industrial and commercial plots, with a 10 percent annual levy designed to accelerate development and curb land banking. 

“Collectively, these initiatives are strengthening industrial capacity, stimulating export growth, and creating a more resilient and competitive economic base,” said Amar Hussain, associate partner, research at Knight Frank for MENA. 

He added: “������Ƶ’s aggressive expansion of its manufacturing sector saw the Kingdom issue 585 new industrial licenses in the first half of 2025 alone, representing SR13.5 billion in new capital investment.”  

Hussain added that the total number of licensed factories stands at 12,840 and is expected to reach 36,000 by 2035.

JEDDAH: Ecotourism has gained significant traction in recent years as more people become aware of the environmental impact of their travel choices.

The growing trend of ecotourism presented a unique opportunity for investors to not only profit but also contribute to sustainable development and conservation efforts.

Additionally, the market is expanding across all regions, driven by rising environmental awareness and government-backed sustainability initiatives.

According to Global Growth Insights, the market size was valued at $629.85 billion in 2024, projected to reach $753.43 billion in 2025, and expected to climb to $901.25 billion by 2026.

Interestingly, Middle Eastern countries are emerging as key destinations for luxury ecotourism and desert conservation experiences. Among those nations is ������Ƶ.

Through Vision 2030, the Kingdom is investing in sustainable tourism mega-projects and ecotourism. Sustainable tourism has emerged as a significant segment within ������Ƶ’s vast tourism industry, given its importance and impact.

Over the past few years, there has been increasing interest in ������Ƶ, much of it attributed to the Kingdom’s diverse eco-tourist destinations.

Indeed, ������Ƶ recognizes the potential of ecotourism and is working to become the region’s destination of choice.

With its vast and varied landscapes, the Kingdom has several high-priority regions, including Asir and Jazan in the south and the Red Sea islands in the west. If all goes well, ecotourism is projected to contribute to the Kingdom’s target revenue of $133 billion in tourism by 2030.

From initiatives to preserve natural landscapes to projects to repopulate regions with native wildlife, the country is gearing up to open its doors to a world of nature lovers and travelers seeking the next breathtaking ecotourism spot.

Speaking to Arab News during the 27th session of the Near East Forester and Range Commission, Hoda Al-Bugami, general director of investment at the Saudi National Center for Vegetation Cover Development and Combating Desertification, said that there are numerous investment opportunities within the center’s plan to enhance environmental sustainability and open new horizons for natural tourism in the Kingdom.

“Ecotourism is a promising sector growing at a rate of 3-5 percent annually. Consider the camping and caravan market in national parks, which represents a vital economic sector with annual spending estimated at approximately $48 billion,” Al-Bugami said.

In addition, she noted that direct ecotourism spending in Canada amounts to $7.5 billion, while annual nature tourism spending in Europe reaches $40 billion.

She added: “The center works to prepare sites in several aspects, including protecting vegetation cover and preventing environmental violations such as logging and overgrazing, developing natural resources and biodiversity, and creating natural environments and habitats.

“All of these factors attract investors, offering seasonal investment opportunities of up to three months and long-term investment opportunities that provide flexibility for investments of up to 25 years.”

She also affirmed that investment in ecotourism within ������Ƶ’s natural reserves strengthens the economy, bolsters local communities, and aligns with the strategic vision for a sustainable green economy.

“Forests and rangelands are the backbone of improving livelihoods for the local community and increasing the gross domestic product,” she said.

Ecotourism offers more than an opportunity to explore unique landscapes. ������Ƶ is home to various locations that make it special to explore, such as AlUla with its beautiful and ancient oasis, Asir with its mountains and coastline, the wonders of the Red Sea, and Al-Ahsa Oasis, which is the World’s largest oasis.

Ecotourism investment opportunities are abundant for local investors seeking to align their financial goals with sustainable development objectives.

Whether it is through supporting green accommodations, wildlife conservation initiatives, community-based tourism projects, or renewable energy infrastructure, these investment opportunities not only foster long-term profitability but also position business owners as leaders in the vital transition towards more sustainable tourism practices.