The Occupancy Rate Has Been Lower In Jeddah In Comparison To Riyadh Till 2022 Which Will Soon Match Up Levels Of Riyadh Till 2027. Will KSA Stand On This Projection? : Ken Research
1. High demand of Technology warehouses with Automation especially by E-commerce companies.
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- 58 new industrial licenses have been issued along with 721 factories that have begun production first half of 2021 indicates the reason of huge demand spike happened in 2022.
- The majority of warehousing demand is centered on larger, modern sort of facilities and is heavily connected to the Kingdom’s megaprojects and the buoyant e-commerce sector
- ACME has opened their office in Riyadh to meet the increasing demand for automated distribution centers by e-commerce, pharmaceutical and automotive companies.
2. Jeddah will experience influx of more Grade A warehousing space in future in comparison to Riyadh
- Grade A facilities in Jeddah will increase at a higher rate when compared to other types of warehouses due to shifting investors, companies and end-user’s preferences towards Jeddah. Few Projects/ warehouses especially for Grade A are:
- Modon, Saudi Authority for Industrial Cities and Technology Zones is in deal to develop 14 digital warehouses in Jeddah in the next few years
- MAWANI, in partnership with logistics company, LogiPoint (a subsidiary of SISCO), will build two new warehousing complexes on a 43,000 sqm (24,500 sqm+18,700 sqm) site in the Bonded and Re-Export Zone at Jeddah Islamic Port with an investment exceeding SAR150 Mn.
3. Negotiation of 20-40% in leasing rate is dependent upon location, Inter personal relationships, Area for warehouses requested in Jeddah and Riyadh
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- Sudden spike in 2022 in both Jeddah and Demand has been due to sudden hike in demand and limited availability of warehouses in areas such as Asfan, Al Bariah and more
- The negotiation rate for a warehouse leasing is in a range of 20%-40% depending upon the size of warehouses, type of warehouses, locations, inter personal relationships and more. The Negotiation of up to 40% can be asked for a warehouse of 10,000+ sqm in prime location of Jeddah and Riyadh.
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