DHL Supply Chain is investing €130m in a regional logistics and distribution hub at Riyadh's Special Integrated Logistics Zone, with construction from the first quarter of 2026 and completion expected in the second quarter of 2027.
DHL Supply Chain is investing €130m, around SAR 561.5m, in a new regional logistics and distribution hub at the Special Integrated Logistics Zone in Riyadh.
The facility occupies a 78,000 square metre plot with around 53,000 square metres of multi-user warehouse space, held under a leasehold commitment running 26 years. Construction was scheduled to begin in the first quarter of 2026 with completion expected in the second quarter of 2027. The hub sits eight kilometres from King Khalid International Airport and is linked to it through a bonded corridor.
Three details in that description carry most of the information.
The first is the 26-year lease. A logistics operator taking a quarter-century commitment on a single facility is not testing a market. Distribution assets are typically leased on five to ten year terms precisely because networks change, and a term of this length signals that the operator expects the location to remain central to its regional network for the life of the building.
The second is the bonded corridor. Goods can move between the airport and the facility without formally entering the customs territory, which allows storage, consolidation and re-export without duty exposure. For a multi-user hub handling technology, retail, consumer goods, automotive, energy and e-commerce, that treatment is what makes the location competitive against alternatives in the Emirates.
The third is multi-user. A dedicated facility is built for one client's requirement and stands or falls with that contract. A multi-user warehouse is a property proposition that spreads risk across tenants and smooths the peaks that make single-client facilities uneconomic for much of the year.
The investment forms part of a broader DHL Group commitment of around €500m to the Middle East through 2030, and it is one of the anchor tenancies in a zone the Kingdom has been positioning as the template for its wider logistics estate programme. The Special Integrated Logistics Zone covers more than 32 million square feet next to the airport.
The construction content is conventional and substantial: a large single-storey warehouse with racking, dock levellers, sprinkler protection, and the mechanical and electrical services a temperature- and security-controlled facility requires. It is the kind of building the Saudi contracting market can deliver in volume, which is why the zone's development pace depends more on leasing than on construction capability.
The commitment also reads as a judgement on where regional distribution is heading. For two decades the default structure for serving the Gulf was a hub in the Emirates with onward road freight into Saudi Arabia, which suited a market whose consumption was smaller than its neighbour's re-export trade. A facility of this size and tenure inside the Kingdom is a bet that Saudi domestic demand now justifies its own regional node rather than a spoke off someone else's.