Saudi Arabia is currently conducting a technical study to provide public companies in the logistics services sector with new funding for “build to suit” warehouse construction projects due to the high demand for this type of loan.
Specializing in providing commercial property lessees with an agreement with a developer or landowner to construct a new facility for rent, this type of financing allows for optimal use of the land and building. The lessee usually becomes the sole occupant and determines the design to meet business needs.
Sources said the Saudi Ministry of Transport and Logistics Services and the Saudi Industrial Development Fund have instructed the private sector to grant direct access to new funding for three nominated companies.
This decision follows a series of meetings held to discuss the mechanism, marking a step towards developing and enabling operating facilities in the sector.
Sources confirm that one facility has expressed interest in participating in a trial of the new funding, with two available opportunities currently under consideration.
The move aims to contribute to the development of the logistics services sector, which is experiencing a qualitative leap in Saudi Arabia, and to enable operating companies in the sector.
Prince Mohammed bin Salman, Crown Prince and Prime Minister, launched the National Strategy for Transport and Logistics Services in 2021, with the aim of positioning the Kingdom as a global logistics hub connecting three continents.
The strategy intends to upgrade all transportation services and bolster integration in the logistics services system and modern transportation patterns. This aims to support the Kingdom's comprehensive development process.
The strategy comprises a series of significant projects designed to facilitate the attainment of economic and social objectives, along with the implementation of efficient governance models to strengthen institutional operations within the system.