The Saudi Ports Authority launched the Al Khomra Logistics Zone. It is the largest integrated logistics zone in the Kingdom of Saudi Arabia—and could become a trade route for the Belt and Road Initiative (BRI). Al Khomra Logistics Zone is strategically located on the Red Sea coast of Jeddah, which is a significant passageway for over 13 percent of global maritime trade.
The zone will open up new opportunities for both businesses and occupiers to establish and expand their operations in the Kingdom. That said, it will also increase investor appetite, especially for those seeking to build their portfolios.
The logistics zone will comprise primary and secondary manufacturing facilities along with storage and cooling facilities. Dr. Nabeel bin Mohamed Al-Amudi, the Saudi Arabian Minister of Transport announced at the 3rd Saudi Logistics Conference that, “The Government of the Kingdom of Saudi Arabia has been keen on promoting the various sectors of business and production in the Kingdom to enhance our national economy and promote development. It will drive comprehensive major steps forward for the prosperity of our people, and the well-being of our homeland.”
The zone will encourage Middle East investors to step out of their comfort zone and invest in other assets as well. Research Director MENA at JLL Dana Salbak emphasised that the logistics sector is becoming popular on the global front, especially with investors willing to invest in assets away from traditional real estate.
Overseas investments by industrial and logistics entities in the Middle East reached $315 million during the first half of 2019. However, retail mall investments during that period amounted to $155 million.
The Middle East logistics is expected to flourish in ecommerce and omnichannel retailing on a regional and global scale.