ESR and Al Muhaidib Launch $5bn Saudi Logistics Property Venture

Saudi Arabia, Riyadh – ESR Group Limited and Al Muhaidib Group have announced a 50:50 joint venture targeting up to US$5 billion in industrial and logistics real estate investments across Saudi Arabia over the next five years.

The partnership will focus on developing, owning and managing industrial and logistics properties in key markets across the Kingdom, including Riyadh, Jeddah and Dammam. Its investment strategy will combine new developments with acquisitions of existing assets that offer opportunities for improvement and additional value.

ESR, an Asia-Pacific real asset owner and manager, will contribute its expertise in property development, asset management and investment fund management. Al Muhaidib Group, one of Saudi Arabia's major diversified business groups, will provide local development experience, access to strategic land holdings and knowledge of the domestic market.

The companies have already identified a pipeline of potential build-to-suit developments and strategically located land parcels across Saudi Arabia's industrial and logistics markets.

The joint venture will seek to deliver modern industrial buildings and logistics facilities designed around the requirements of businesses expanding their operations in the Kingdom. Its development plans also include larger logistics parks that can be delivered in multiple phases.

These facilities will be planned with access to major transport and distribution infrastructure, including ports, airports, rail networks and industrial cities, allowing businesses to connect warehousing and manufacturing operations with domestic and international supply chains.

The investment programme comes as Saudi Arabia continues to expand its industrial sector and strengthen its position in regional and global trade. Demand for modern Grade A logistics facilities is increasing alongside industrial development, changing distribution requirements and growing commercial activity.

According to the companies, demand for high-quality logistics space continues to exceed available supply, creating opportunities for new facilities and the redevelopment of existing industrial assets.

Stuart Gibson, Co-founder and Co-CEO of ESR, said: “Saudi Arabia is emerging as one of the world's most compelling markets for industrial and logistics investment, supported by strong structural growth drivers and increasing demand for high-quality real assets. The Kingdom's ambitions to strengthen industrial capabilities, expand trade corridors and modernise supply chains are creating significant demand for modern logistics infrastructure. Together, we are well positioned to support that growth while creating attractive long-term opportunities for institutional investors and value for the communities we serve.”

Under the joint venture structure, both ESR and Al Muhaidib Group will contribute capital and participate in the delivery of development projects.

ESR will bring its experience in developing and managing institutional-grade industrial properties, while Al Muhaidib Group will support project execution through its local development capabilities, established business operations and access to land.

The partnership is also designed to attract additional investment from Saudi, regional and international institutional investors as individual development opportunities progress.

Properties developed through the venture will follow ESR's global Grade A standards, with completed assets expected to form part of long-term investment structures that generate rental income.

The approach combines property development with ongoing asset ownership and management, allowing the partners to pursue both construction opportunities and income-producing industrial real estate investments.

Al Muhaidib Group brings more than eight decades of operating experience in Saudi Arabia, including businesses that depend on warehousing, distribution and logistics infrastructure.

Essam A.K. Al Muhaidib, Chief Executive Officer of Al Muhaidib Group, said: “For more than eight decades, we have built and operated businesses supported by efficient warehousing and distribution networks across the region. This experience has given us a deep understanding of evolving customer needs and the increasingly important role that high-quality industrial and logistics infrastructure plays in supporting business growth. By combining our strong local market knowledge and development capabilities with ESR’s global expertise, this joint venture will deliver world-class industrial and logistics solutions that support the Kingdom’s continued industrial expansion and its ambition to become a leading global logistics hub, in alignment with Saudi Vision 2030.”

The planned investments will support the development of industrial and logistics facilities as Saudi Arabia works to expand its manufacturing base, improve supply-chain connectivity and attract private investment into infrastructure supporting the non-oil economy.

The joint venture is expected to commence operations in the first quarter of 2027, with a dedicated team based in Saudi Arabia and strategic oversight from senior executives at both companies.

The announced US$5 billion represents the venture's investment target over five years, rather than funding already deployed or the value of an awarded construction contract. The companies have not disclosed individual project construction costs, commencement dates or completion schedules.