GCC: E-commerce Market Records Incredible Growth As More People Shop Online

The UAE and Saudi Arabia have been recording substantial increase in the demand for warehouses as a result of growth in e-commerce and local economic diversification strategies, leading to a notable surge in investments in the sector.

The e-commerce market in the Gulf Cooperation Council countries continues to grow as more people choose to shop online, in turn pushing the demand for warehouses to record highs. In the UAE, the market is expected to reach $9.2 billion in 2026, up nearly 92% from 2021.

Dubai recorded 9.9 million sq ft of new warehouse requirements in the first nine months of 2023. The logistics sector accounted for 44% of new requirements, dominating the list, followed by manufacturing and industry, and the technology sectors.

Meanwhile, Saudi Arabia seeks to develop 59 logistics centres across the country as part of its broader National Transport and Logistics Strategy, as it plans to become a global logistics hub as part of its diversification plans.

Increased Need For Storage & Distribution Centres

Bahrain-based Arcapita aims to boost its logistics portfolio in the two large economies to $2 billion in the next 2 to 3 years. Currently, the alternative asset manager owns logistics assets worth $500 million in Dubai and another $500 million in Saudi Arabia.

Arcapita is boosting investments “due to growth in these economies and e-commerce is a key driver of that,” said chief executive Atif Abdulmalik, The National reported. The company operates in private equity and real estate, and has sizeable investments in the sector.

The entity has completed more than 100 transactions in the past 25 years worth more than $30 billion. It is expected to continue to focus on industrial and logistics, business services and rental housing as part of its investment strategy, Abdulmalik added.

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In an effort to boost food security and reduce reliance on imports, the UAE and Saudi Arabia are also investing in the food production and processing industries. This has prompted an increased need for specialised warehousing facilities to store perishable items.