Arcapita GCC Industrial's assets under management reaches $1bn

Arcapita manages $1 billion in industrial and logistics real estate assets across the GCC region, and the company has a target to double this by 2025

Yousif Al Abdulla, Managing Director and Head of MENA Investment at Arcapita. Supplied Image

Arcapita Group Holdings Limited, the global alternative investment firm, is currently managing $1 billion of industrial real estate assets, making it one of the largest industrial real estate platforms in the GCC region. The firm is expected to double its GCC logistics AUM by 2025 to reach $2 billion.

Arcapita embarked on its GCC industrial strategy in 2010 by establishing a series of portfolios and funds dedicated to industrial assets. The firm grew its assets under management, by acquiring a diversified base of properties tenanted by a wide range of occupiers including blue-chip international companies, regional leaders, and local players. Today, Arcapita’s logistics real estate portfolio, principally across Saudi Arabia and the United Arab Emirates, consists of a combined built-up area of over 3.5 million square feet across more than 30 properties, leased to over 80 tenants.

Arcapita’s report on the kingdom’s logistics ecosystem, published today and sent to its investors, highlights the growing demand for industrial real estate assets underpinned by an estimated growth in e-commerce of 21 per cent from 2022 to 2027.

The report titled Opportunities and Insights: Saudi Arabia's Growing Logistics Sector outlines the supply-demand mismatch in Saudi for industrial real estate evidenced by the strong levels of occupancy and year-on-year growth rates posted across the three main cities of Riyadh, Jeddah and Dammam, based on 2023 Knight Frank research. These fundamentals are also supported by a clear flight to high quality, with a growing number of international occupiers setting higher construction requirements and specifications for industrial facilities that align with international standards.

We are seeing strong fundamentals in the logistics real estate sector; demand continues to outstrip supply for higher-quality assets.

Arcapita Report,
October 2023

In Riyadh, the industrial and logistics spaces are mainly concentrated in the south of the city, however, the recent urban expansion in the north and northeastward regions is propelling e-commerce and 3PL players to expand their presence in the new urban centres. Similarly, Jeddah is witnessing demand influx mainly from e-retailers given the city’s strategic location with maritime access to 260 ports across multiple continents. Accordingly, investors and developers will need to address the increased demand in both regions and the current supply shortage.

Saudi Arabia’s plans to transform the logistics ecosystem with the recently launched ‘Master Plan for Logistics Centres’ as part of the kingdom’s broader National Transportation and Logistics Strategy aims to grow the logistics sector and enhance international trade networks within the country and attract global supply chains to ultimately position the kingdom as a leading global logistical hub. The master plan aims to develop more than 100 million square metres across 59 logistics centres.

Yousif Al Abdulla, Managing Director and Head of Mena Investment at Arcapita, said: “Industrial real estate, and logistics in particular, present a compelling opportunity for investors to contribute to the kingdom’s vision, especially given that the logistics sector sits at the heart of Vision 2030. With our extensive experience in Saudi Arabia over the years, Arcapita is well positioned to be at the forefront of the growth opportunity, and our new investments will add significant value to our investors and clients.”

Over the past 25 years, Arcapita has managed approximately $6 billion in industrial and logistics real estate transactions globally, including $1 billion in the GCC region.