ESR Group Limited (“ESR”) and Al Muhaidib Group (“AMG”) have announced the formation of a 50:50 joint venture to develop, own and manage institutional-grade industrial and logistics real estate across Saudi Arabia, targeting up to USD 5 billion of investments over the next five years.
The partners said the platform will combine ESR’s real asset development, asset management and capital formation capabilities with AMG’s development experience and local footprint developed over more than eight decades in the Kingdom. They described the joint venture as focused on building-to-suit projects for businesses expanding in Saudi Arabia, alongside larger multi-phase logistics precincts.
According to the release, the joint venture’s activity will centre on key cities including Riyadh, Jeddah and Dammam. It plans to pursue new developments and strategic value-add acquisitions within Saudi Arabia’s industrial and logistics sector, with an emphasis on facilities positioned for connectivity to ports, airports, rail and industrial cities.
ESR and AMG pointed to continued demand for modern Grade A logistics facilities in Saudi Arabia, saying demand is outpacing available supply. They attributed the imbalance to factors including economic diversification, industrial expansion, evolving supply chains and growing trade flows.
Partnership roles and investment approach
Under the proposed structure, the joint venture will be capitalised by both partners alongside other institutional investors as opportunities are advanced. The release states that assets are expected to be developed to ESR’s global Grade A standards and may be included in long-term, income-generating investment vehicles.
ESR will contribute development, asset and fund management capabilities, while AMG will provide development know-how, strategic land accessibility and local market understanding. The partners said they will collaborate on project execution and delivery, with a team planned to be based in Saudi Arabia and senior oversight from executives from both firms.
Statements from ESR and AMG
Stuart Gibson, co-founder and co-CEO of ESR, said in the announcement that Saudi Arabia is emerging as a compelling market for industrial and logistics investment, supported by structural growth drivers and increasing demand for high-quality real assets. He added that the Kingdom’s plans to strengthen industrial capabilities, expand trade corridors and modernise supply chains are creating demand for logistics infrastructure.
Essam A.K. Al Muhaidib, chief executive officer of Al Muhaidib Group, said the group has built and operated businesses supported by warehousing and distribution networks across the region for more than eight decades. He described the joint venture as combining AMG’s local market knowledge with ESR’s global expertise, aiming to support Saudi Arabia’s industrial expansion and its ambition to become a leading global logistics hub, in line with Saudi Vision 2030.
Timeline
The release said the joint venture is expected to commence operations in Q1 2027. No further details on initial projects, specific land holdings, or financing terms were provided in the announcement.
