Warehouse rents in Saudi Arabia’s cities Riyadh and Jeddah jumped 22 per cent annually in the third quarter, driven by increased activity in the manufacturing and logistics sectors.
The growth in rentals comes as the country continues to diversify its economy away from oil and invest in various industries to nurture a local manufacturing industry.
The coronavirus-driven boom in online retailing is also contributing to the higher demand for warehouse units in the two cities, global consultancy Knight Frank said in a report on Monday.
Rents in the capital, Riyadh, currently stand at 250 Saudi riyals per square metre ($67). In Jeddah, warehouse rents averaged 179 riyals per square metre ($47.73) with occupancy levels of about 96 per cent at the end of the third quarter.
“The manufacturing sector is fast emerging as a key pillar in the government’s industrial strategy, now accounting for 8.3 per cent of GDP [gross domestic product],” said Faisal Durrani, partner and head of Middle East Research at Knight Frank.
“Government-led incentives to boost domestic production of goods [are] attracting local and international investors, as well as boosting overall activity in this sub-sector.”
Saudi Arabia, the Arab world’s largest economy, is expanding its industrial, manufacturing and mining sectors as part of its Vision 2030 strategy that aims to reduce its reliance on oil revenue and diversify its economy.
Last year, the kingdom launched the National Investment Strategy, which seeks to attract 388 billion riyals in foreign direct investments annually, according to the state-run Saudi Press Agency.
Earlier this year, Lucid Group, the car maker backed by Saudi Arabia's Public Investment Fund, announced plans to set up a factory in the kingdom.
US-listed Lucid has signed agreements with the Ministry of Investment of Saudi Arabia, the Saudi Industrial Development Fund and the Economic City at King Abdullah Economic City (Kaec) for development of the factory.
In April, Saudi Arabian Military Industries (Sami) also signed a preliminary agreement with Boeing to form a kingdom-focused joint venture to localise manufacturing and create more jobs in the country.
Last week, the kingdom launched its first electric vehicle brand “Ceer”, which is set to contribute to its car manufacturing sector.
Saudi Arabia also plans to build three iron and steel projects worth 35bn riyals as it seeks to develop its industrial sector as part of its economic diversification agenda.
The government-led initiatives to boost the manufacturing sector “are also contributing to the mismatch between demand and supply, particularly for internationally specified, high-quality warehouse facilities and last-mile logistics facilities”, Mr Durrani said.
While demand for logistics centres is driving the demand, other manufacturing industries such as the pharmaceuticals and car production are also contributing to rising levels of warehouse requirements, the report said.
“The sustained growth in warehousing demand will maintain upward pressure on rental rates, which is unlikely to reverse until better quality stock enters the market,” said Andrew Love, head of Middle East capital markets and occupier-landlord strategy and solutions at Knight Frank.
“Subject to the speed of construction and assuming there are no delays in announced schemes, we expected a marginal 5 per cent increase in Riyadh’s warehousing supply by 2025.”
Pointing to rapid changes in the industrial sector, Knight Frank said the Saudi Ministry of Industry and Mineral Resources set up a programme to automate 4,000 factories.
Meanwhile, as part of Vision 2030’s aim to use cleaner energy sources, several industrial tenants in Saudi Arabia are also installing solar panels as they begin the transition to greener energy sources, the consultancy said.
A case in point is Al-Munaijam Foods, which installed more than 3,500 solar rooftop panels on their temperature-controlled warehouse in Riyadh to help the kingdom become carbon neutral by 2060, it said.
Saudi Arabia's economy strongly rebounded from the pandemic-induced slowdown on the back of higher oil prices and government initiatives to support the economy.
The kingdom's economy expanded by 8.6 per cent in the third quarter of 2022, according to the flash estimates by the kingdom's General Authority for Statistics last month (Gastat). It is forecast to grow 7.6 per cent this year, according to the International Monetary Fund.
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MATCH INFO
Uefa Champioons League semi-final:
First leg: Liverpool 5 Roma 2
Second leg: Wednesday, May 2, Stadio Olimpico, Rome
TV: BeIN Sports, 10.45pm (UAE)
RESULTS
2pm: Handicap (PA) Dh40,000 (Dirt) 1,000m
Winner: AF Mozhell, Saif Al Balushi (jockey), Khalifa Al Neyadi (trainer)
2.30pm: Maiden (PA) Dh40,000 (D) 2,000m
Winner: Majdi, Szczepan Mazur, Abdallah Al Hammadi.
3pm: Handicap (PA) Dh40,000 (D) 1,700m
Winner: AF Athabeh, Tadhg O’Shea, Ernst Oertel.
3.30pm: Handicap (PA) Dh40,000 (D) 1,700m
Winner: AF Eshaar, Bernardo Pinheiro, Khalifa Al Neyadi
4pm: Gulf Cup presented by Longines Prestige (PA) Dh150,000 (D) 1,700m
Winner: Al Roba’a Al Khali, Al Moatasem Al Balushi, Younis Al Kalbani
4.30pm: Handicap (TB) Dh40,000 (D) 1,200m
Winner: Apolo Kid, Antonio Fresu, Musabah Al Muahiri
UAE currency: the story behind the money in your pockets
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
Sustainable Development Goals
1. End poverty in all its forms everywhere
2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture
3. Ensure healthy lives and promote well-being for all at all ages
4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
5. Achieve gender equality and empower all women and girls
6. Ensure availability and sustainable management of water and sanitation for all
7. Ensure access to affordable, reliable, sustainable and modern energy for all
8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
9. Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation
10. Reduce inequality within and among countries
11. Make cities and human settlements inclusive, safe, resilient and sustainable
12. Ensure sustainable consumption and production patterns
13. Take urgent action to combat climate change and its effects
14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development
15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
17. Strengthen the means of implementation and revitalise the global partnership for sustainable development
The specs: 2018 Audi RS5
Price, base: Dh359,200
Engine: 2.9L twin-turbo V6
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Fuel economy, combined: 8.7L / 100km
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
