Middle East sector set for boom in coming years

work together and develop an end-to-end experience, serving the industry and the respective local economies.

Meanwhile, the UAE is also wellpositioned to export to African countries due to its developed logistics industry. The UAE Trade Center offers Emirati companies a one-stop exporting solution to take their business into emerging markets in Africa. The initiative facilitates meetings for small- and midsize enterprises with potential business partners either in the UAE or in Africa. The UAE Trade Center mainly focuses on East Africa, with an office in Nairobi, Kenya, but CEO Walid Hareb Al Falahi said he is looking to connect Emirati and West African businesses, starting in Accra, Ghana, where the business is working on a 100-megawatt solar project.

E-Commerce

E-commerce is now driving the development of the logistics industry globally, and the e-commerce industry across the Middle East is also growing rapidly due to the high levels of internet penetration and the rising GDP of many countries, including Bahrain and Saudi

Arabia.

While many of the Middle East’s imports have historically come from China, an increasing number of shoppers in the region are also buying from different markets. Across the Middle East, Amazon and eBay are used just as frequently (and sometimes more) as the local sites, such as Cobone, Souq, and Sukar. The purchasing power of the Middle Eastern region comes largely from an extremely young population. In Saudi Arabia, over 55% of the population is under 30 years, meaning young, digitalsavvy shoppers are driving smartphone use in the region to over 65% and internet penetration to over 90% in the UAE, Bahrain, and Qatar. As a result, e-commerce is growing steadily.

Investment in India

Other key news lies in Bahrain-based investment firm Investcorp’s continuing warehouse investments in India, betting the nation’s manufacturing ambitions and e-commerce boom will fuel demand for logistics. Warehousing currently accounts for almost 16% of the firm’s US$350 million real estate portfolio in India, and it’s planning to boost that share in the coming year, according to Ritesh Vohra, the firm’s real estate head in the nation.

He said: “Warehouses could end up being our biggest strategy in Indian real estate.” Investcorp joins a flood of international capital investing in a sector that’s been buoyed by the government’s plan to transform India into a manufacturing hub, and a steady rise in online shopping on platforms such as Walmart’s Flipkart and Amazon.com.

The company, whose Indian real estate portfolio is currently dominated by residential property, last year deployed $55 million to back Chennai-based developer NDR Warehousing. That helped grow NDR’s stock of warehousing space to 14 million square feet from 9 million square feet. Private equity investment in Indian warehousing climbed 45 per cent to $1.9 billion in 2022 from the prior year, when funding for all other real estate classes declined amid a global economic slowdown, according to a report by international property consultant Knight Frank. That momentum is seen continuing in 2023.

Saudi Arabia Sees Boost in Global Logistics Ranking

Saudi Arabia has jumped up the rankings in the World Bank’s Logistics Performance Index, coming in at 38, a big jump from number 55 in the 2018 report. In the last few years, Saudi Arabia has seen its stock as a global logistics hub rise as it formulates plans for as many as 60 logistics hubs around the Kingdom, and contemplates wholesale upgrades of existing ports, as well as a number of greenfield facilities.

Identical rankings to Saudi Arabia were achieved by India, Lithuania, Portugal, and Turkey, with identical overall LPI scores of 3.4. The rankings were topped by Singapore, with a score of 4.2, with Finland coming second, also on 4.2 and Denmark third, with 4.1. Saudi Minister of Transport and Logistics, Saleh Al-Jasser, said: “This progress came with the support of the Crown Prince and the ambitious goals of the National Strategy for Transport and Logistics Services.”

Afghanistan and Libya came bottom of the rankings, in 138-equal position, with LPI scores of 1.9.

Saudi Arabia has also seen major investments in its transport network that is now transforming life and business in the Kingdom. A recent report on the transport sector shows Saudi Arabia has more than 73,000km of roads, 13 ports, conducted more than 700,000 flights and transported 5.8 million people by rail in 2022.

The Kingdom is looking to establish itself as a leading logistics hub and is investing heavily in land, sea, and air transport. Saudi Arabia’s location at the confluence of three continents, Asia, Africa, and Europe makes it a global logistics hub. This location contributed to the Kingdom becoming a leading country in the transport and logistics sector. Saudi Arabia’s 73,000km of roads includes 3,690 bridges and 76 tunnels that fall under the responsibility of the Ministry of Transport and Logistic Services.

More recently, A. P. Moller - Maersk, a global integrator of logistics, and Saudi Ports Authority ‘Mawani’ have broken ground for Saudi Arabia’s largest Integrated Logistics Park at Jeddah Islamic Port. Present at the groundbreaking ceremony were His Excellency Mr Omar Bin Talal Hariri President, Saudi Ports Authority (Mawani), Her Excellency Ambassador Liselotte Plesner, Danish Ambassador to Saudi Arabia, Mr Abdullah Al Zamil, CEO of Zamil Construction, and Mr Mohammad Shihab, Managing Director, Maersk Saudi Arabia, along with Maersk’s valued customers, and partners. The greenfield project spread over an area of 225,000 sq. m. will be the first of its kind at the Jeddah Islamic Port offering an array of solutions with an aim to connect and simplify the supply chains of Maersk’s customers in the Kingdom. The 346 Mn USD- (1.3 Bn Saudi Riyal) investment project will not only create bespoke logistics solutions but also focus heavily on decarbonising logistics with the use of renewable energy to power the entire facility. The project is expected to create more than 2,500 direct and indirect jobs in Saudi Arabia.

Agility Plans Major MENA Digital Park

Kuwait-based logistics real estate firm Agility has announced plans for a series of data centre campuses across the Middle East and North Africa. Agility Logistics Parks (ALP), which develops industrial and logistics real estate in the Middle East, Africa, and South Asia, this week announced the launch of four ‘tailored, master-planned data centre campus sites’ in Saudi Arabia, Kuwait, Egypt, and Ghana.

The company said the sites are being readied at ALP’s existing parks with power allocation, fibre connectivity, and building permits. The first set of campuses are within ALP parks in Riyadh, Saudi Arabia; Kuwait; Cairo, Egypt; and Accra-Tema, Ghana. The company said it expects to add sites in other markets in the future including Nairobi, Kenya; Casablanca, Morocco; and Lagos, Nigeria. Ronald Philip, senior director at ALP, said that the company was “uniquely poised with a portfolio of ideal sites” across the Middle East and Africa.