2023-11-20-莱坊-KSA_Industrial_Market_Review_H1_2023_7页_12mb

Saudi Arabia Industrial Market Review Summary for H1 2023

Key Highlights

• Economic Growth: Non-oil activities experienced a 5.5% growth rate in Q2 2023, driving overall real GDP increase of 1.1%. This was supported by declining oil dependency, with the government's plans boosting private sector investments.

• Investment and Licenses: Foreign investment licenses surged by 31% year-over-year in H1 2023, with SAR 2.8 billion invested in industry during Q2 2023—up 23% from last year. Total new industrial licenses reached 557, and new factory capacity expanded significantly.

• Government Initiatives: Programs like the Saudi Industrial Development Fund (SIDF) and National Investment Strategy (NIS) aim to diversify the economy. For instance, the National Industrial Strategy targets SAR 557 billion in exports by 2030 and 36,000 factories by 2035.

• Logistics and Warehouse Demand: E-commerce growth and infrastructure projects fueled a 20% rise in warehouse rents, e.g., SAR 205 psm in Jeddah and SAR 200 psm in Riyadh. Occupancy rates are high (around 96%), indicating strong demand due to factors like higher online shopping preferences among younger demographics.

• Market Data: In key cities, warehouse supply increased modestly (e.g., Riyadh from 25.1 million sqm in H1 2022 to 25.6 million sqm in H1 2023), while production exporting nations like the US and Germany drove occupancy challenges. Notably, logistics hubs in Jeddah and Riyadh show high vacancy rates of 3%.

• Environment and Sustainability: Renewable energy goals are integrated into policies, with projects focusing on decarbonization and sustainable logistics centers to support Vision 2030's objectives.

Conclusion: The market shows robust growth driven by government policies, indicating opportunities for further investment and development in non-oil sectors, despite volatility and demand pressures.