Saudi Arabia’s capital Riyadh maintained its strong momentum of growth as a regional industrial hub with uniform rental increases across all industrial submarkets in Q2 2025, according to JLL’s latest Industrial Market Dynamics report.

 

The Q2 report also highlights the resilience of top-tier industrial locations in attracting premium rents and sustaining high occupancy levels.

 

The industrial and logistics markets in both Riyadh and Jeddah saw healthy rental growth of 9.3% and 4.5% respectively. In contrast, although headline rents increased by 10.8% in the Dammam Metropolitan Area (DMA), the sub-markets experienced a fragmented performance.

 

Taimur Khan, Head of Research, JLL Middle East and Africa, said: “The overall healthy rental growth across Saudi Arabia’s industrial markets reflects the impact of ongoing industrial development and logistics infrastructure improvements, driven by Vision 2030’s ambitious agenda. Well-positioned submarkets, located along major transportation corridors, are primed for stronger performance in the months ahead. As industrial occupiers continue to focus on modern facilities and strategic locations, this will further shape the market's trajectory and drive demand, supporting the Kingdom's economic transformation goals.”

 

Riyadh recorded annual growth rates ranging from 4.7% to 25% across warehouses in all industrial submarkets, reflecting broad-based demand fundamentals as the city benefits from ongoing economic diversification initiatives. Industrial Gate City retained its premium position at SAR 300 per sqm per annum, recording 5.3% annual growth, with Tharawat Logistics closely following at SAR 285 per sqm per annum. Taybah emerged as Riyadh's standout performer, achieving a remarkable 25% annual rental growth while Al Fawzan Industrial City recorded a strong growth of 17.8%. 

 

Jeddah Islamic Port solidified its status as Saudi Arabia's most premium industrial location, commanding SAR450 per sqm per annum with 7.1% annual rental growth. Rental levels in this top-tier location significantly outpaced both Riyadh and Dammam, reinforcing its strategic value for trade-dependent operations. Despite rental increases in the majority of Jeddah's submarkets, growth rates were more moderate than in the Saudi capital. As Sarawat led with 8.3% growth, while Al Nakheel recorded 8% annual growth, the report said.

 

The Dammam Metropolitan Area (DMA) presented a mixed performance, with Al Khalidiyah Shamaliyah emerging as a strong growth leader, commanding the highest rental rates of SAR 235 per sqm per annum at 9.3% annual growth. 

 

Indus-Comm was an exceptional growth outlier, delivering the market’s strongest rental growth performance with 32.4% rental growth. King Abdulaziz Road demonstrated strong momentum with 20% annual growth despite offering the most affordable rates at SAR 180 per sqm per annum, indicating broad-based demand across price segments. Al Taawun was the only submarket across all three major cities to record a rental decline, with a 6.3% annual decrease, it said. -TradeArabia News Service