ESR Group Limited and Al Muhaidib Group have joined forces to create an equal joint venture focused on institutional-grade logistics and industrial real estate across Saudi Arabia.

The new entity will target up to USD 5 billion in development projects and value-add acquisitions over the next five years. Initial efforts will focus on key economic centres, including Riyadh, Dammam and Jeddah. The partnership aims to build customised facilities alongside larger multi-phase logistics parks connected to essential transport infrastructure, such as ports, airports, railways and industrial areas.

The venture pairs the global asset management, capital formation and development capabilities of ESR with the local market expertise, operating businesses and strategic land holdings of Al Muhaidib Group. Both companies will co-invest capital in the vehicle, which has been designed to pull in regional, local and global institutional capital into the country’s logistics market.

Rising trade flows, economic diversification and shifting supply chains mean demand for modern Grade A logistics sites in the Kingdom is currently running ahead of available supply. Facilities completed under the project will follow ESR’s global standards, with plans to eventually place them into income-producing long-term investment vehicles.

The joint venture is due to begin operations in the first quarter of 2027. It will be run by a dedicated team located in Saudi Arabia, under executive oversight from both founding groups.

Stuart Gibson, Co-founder and Co-CEO, 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.”

ESR will supply its fund management, asset management and development expertise, while Al Muhaidib Group brings its long track record, local market knowledge and access to development land.

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.”