Arcapita Group Holdings' $2 Billion GCC Logistics Ambition by 2025
Arcapita Group Holdings, a global alternative investment firm, has established itself as a significant player in the GCC's industrial real estate sector, currently overseeing a portfolio of industrial real estate assets valued at $1 billion.
This accomplishment places them among the largest industrial real estate platforms in the Gulf Cooperation Council (GCC) region.
The firm now has ambitious plans to double its assets under management (AUM) in GCC logistics, targeting a milestone of $2 billion by 2025.
Arcapita's foray into the GCC industrial real estate landscape began in 2010 when they initiated a strategic approach focusing on portfolios and funds exclusively dedicated to industrial assets.
Headquartered in Bahrain, the firm bolstered its AUM through strategic acquisitions of properties hosting a diverse array of occupants, including esteemed international corporations, regional leaders, and local enterprises.
At present, Arcapita's logistics real estate portfolio primarily spans Saudi Arabia and the United Arab Emirates, encompassing a total built-up area exceeding 3.5 million square feet across more than 30 properties, leased to over 80 tenants.
In an October 22nd report titled 'Opportunities and Insights: Saudi Arabia's Growing Logistics Sector,' shared with its investors, Arcapita underscored the escalating demand for industrial real estate.
This surge is substantiated by an estimated 21% growth in e-commerce from 2022 to 2027.
The report also highlights the supply-demand imbalance for industrial real estate within Saudi Arabia, backed by robust occupancy levels and year-on-year growth rates in the key cities of Riyadh, Jeddah, and Dammam, as per 2023 Knight Frank research.
This trend is further buoyed by a discernible shift towards superior quality, with an increasing number of international occupants setting higher standards and specifications for industrial facilities, aligning them with international norms.
In Riyadh, industrial and logistics spaces are chiefly concentrated in the city's south, but the recent urban expansion towards the north and northeast regions is spurring e-commerce and third-party logistics (3PL) players to expand into these emerging urban centers.
Likewise, Jeddah is witnessing a surge in demand, primarily from e-retailers, owing to its strategic location with maritime access to 260 ports across multiple continents.
Consequently, both investors and developers need to address the mounting demand in these regions, exacerbated by a current supply shortage.
Saudi Arabia's plans to transform its logistics sector, through initiatives like the 'Master Plan for Logistics Centers,' as part of the broader National Transportation and Logistics Strategy, aim to elevate the country's logistics sector and improve international trade networks.
These efforts are geared towards attracting global supply chains and establishing the Kingdom as a preeminent global logistical hub.
Yousif Al Abdulla, Managing Director and Head of Mena Investment at Arcapita, commented, "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," he added, "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."
Arcapita boasts a rich history in industrial and logistics real estate transactions, having managed approximately $6 billion in such transactions worldwide over the past 25 years, including an impressive $1 billion within the GCC region.