Saudi Arabia’s industrial occupancy exceeded 90 percent across its main markets in the second quarter, while the number of industrial establishments rose to 13,660 in April, according to a report by the property consultancy JLL. Occupancy in Riyadh, Jeddah and the Dammam Metropolitan Area all held above 90 percent, supported by lease renewals and continued take-up of industrial and logistics space.
The Kingdom’s industrial base grew from 12,289 establishments a year earlier, as 322 new industrial licences were issued and 188 factories began production, JLL said, adding that the expansion is generating fresh demand for industrial and logistics space. The growth reflects a broader drive to lift manufacturing capacity and attract investment into higher-value industries.
Those efforts sit at the centre of the country’s economic planning. Under the National Industrial Strategy, Saudi Arabia aims to increase the number of industrial plants to about 36,000 by 2035, up from 7,206 in 2016, while Vision 2030 focuses on expanding production, strengthening local content and deepening the links between manufacturing and logistics.
“The resilience and adaptability of the Kingdom’s logistics sector, backed by national directives and strategic port infrastructure investments in line with Vision 2030 goals, have strengthened Saudi Arabia’s strategic position as a global trade hub,” said Saud Al Sulaimani, chief executive and head of capital markets for Saudi Arabia at JLL. That structural demand, he added, is “creating a dependable ecosystem for investment and growth” and fuelling interest in premium, well-located logistics space.
Rising demand has pushed rents higher across all three markets. The Dammam area recorded the largest increase at 6.9 percent, followed by Jeddah at 4.8 percent and Riyadh at 3.9 percent, where Industrial Gate City posted the capital’s highest rate at 300 riyals per square metre a year. With supply tight, JLL expects occupancy to remain high over the near to medium term, and although planned developments could ease pressure in some submarkets, the consultancy does not foresee a significant shift away from conditions that currently favour landlords.
