Saudi industrial, logistics sector expands as rents rise across Riyadh, Jeddah, Dammam
Jeddah, the Kingdom’s primary western gateway, saw average rents climb by 4.8%, while in the capital, Riyadh, rents rose by 3.9%.
SAUDI ARABIA – Strong investor confidence, a strategic realignment of regional trade flows, and sustained momentum towards Vision 2030’s industrial diversification goals have reinforced Saudi Arabia’s position as a critical and resilient logistics hub.
JLL’s latest KSA Industrial Market Dynamics Q2 2026 report said that with an expanding industrial base, the Kingdom’s industrial and logistics real estate sector is experiencing tight occupancy across major markets, while the country’s multi-port network is driving resilience-driven demand, and occupiers are prioritizing regional risk mitigation amid broader regional uncertainties.
Saudi Arabia’s industrial base expanded to approximately 13,660 establishments in April 2026, up from 12,289 a year earlier, indicating tangible progress towards Vision 2030 goals. This rapid growth is fueling demand, driven by lease renewals and consistent new absorption.
Supply-Demand Imbalance and Rental Rate Growth
Occupancy across the major hubs of Riyadh, Jeddah, and the Dammam Metropolitan Area (DMA) remained above 90% in Q2, highlighting strong occupier commitment and the structural supply-demand imbalance in these markets.
Rental rates across all three hubs continued to rise, as persistent Grade A scarcity and structural demand growth outweighed the impact of regional geopolitical tensions.
Jeddah, the Kingdom’s primary western gateway, saw average rents climb by 4.8%, while in the capital, Riyadh, rents rose by 3.9%. The Industrial Gate City submarket commanded the highest rate at SAR 300 per sq m per annum. DMA recorded the most significant surge, with average rents rising by 6.9%.
Trade Flow Realignment and Port Expansion
Demand patterns shifted significantly in the second quarter, as regional disruptions rerouted cargo flows towards Saudi Arabia’s Western ports, including Jeddah Islamic Port and King Abdullah Port in Rabigh.
This strategic realignment was further reinforced by the launch of MSC’s new Middle East Express service, which now offers a direct shipping link from Europe to these key Red Sea hubs.
Finally, as Saud Al Sulaimani, CEO and Head of Capital Markets – KSA at JLL, said: “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. This structural demand, including enhanced capacity of the Kingdom’s Red Sea ports, is creating a dependable ecosystem for investment and growth, and fueling interest in premium, strategically positioned logistics spaces, even amidst broader macroeconomic uncertainties.”
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