Saudi Arabia’s logistics and industrial property markets are gaining further momentum as companies rethink supply chains, diversify operations and seek greater protection against regional disruptions, according to JLL.
The Kingdom’s expanding industrial base and strategically positioned ports are helping sustain strong demand for warehouses and logistics facilities, with occupancy remaining above 90% across the key markets of Riyadh, Jeddah and the Dammam Metropolitan Area (DMA) during the second quarter of 2026.
Saudi Arabia had about 13,660 industrial establishments by April, compared with 12,289 a year earlier. The expansion is translating into continued demand for industrial space, driven by both new occupiers and companies renewing existing leases.
Limited availability of high-quality Grade A facilities has also pushed rents higher. Average industrial rents increased 4.8% in Jeddah, 3.9% in Riyadh and 6.9% in the DMA during the quarter. Riyadh’s Industrial Gate City remained the most expensive submarket, with rents reaching SAR 300 per square metre annually.
One of the most notable developments during the quarter was the redirection of cargo toward Saudi Arabia’s western ports as regional disruptions altered established shipping patterns. Jeddah Islamic Port and King Abdullah Port in Rabigh emerged as key beneficiaries of the shift.
The launch of Mediterranean Shipping Company’s new Middle East Express service has added further weight to the trend by creating a direct maritime connection between Europe and major Red Sea hubs.
Although disruptions have contributed to higher freight costs in the short term, the broader impact could prove more lasting. A portion of the cargo diverted to Saudi Arabia’s western ports is expected to remain there, potentially giving the Kingdom a larger and more permanent role in regional trade flows.
JLL expects occupancy in the country’s main industrial markets to remain elevated in the near and medium term. New developments could ease pressure in some locations, but the additional supply is unlikely to quickly overturn the current landlord-favourable market.
Saud Al Sulaimani, CEO and Head of Capital Markets – KSA at JLL, said the combination of national initiatives, port investment and the Kingdom’s ability to adapt to changing trade patterns is reinforcing its position as a global logistics centre.
The continued expansion of Red Sea port capacity, he added, is creating an increasingly reliable platform for investment and encouraging demand for strategically located, premium logistics facilities despite wider economic uncertainties.
The latest market trends underline a broader shift: Saudi Arabia is no longer simply expanding its logistics infrastructure for future demand. Its ports and industrial centres are increasingly being used as alternative routes today, strengthening the Kingdom’s position in an evolving regional supply chain.
