ESR Group Expands Industrial Real Estate and Data Center Platform Into Saudi Arabia and UAE

SINGAPORE — ESR Group announced Oct. 8, 2026, that it is expanding into the Middle East, with plans to establish a long-term logistics real estate and data center platform across the Gulf Cooperation Council (GCC). The company said it is initially focusing on Saudi Arabia and the United Arab Emirates.

ESR has identified a pipeline of more than 3 million square meters across logistics and digital infrastructure assets, with a potential end value in excess of US$10 billion, the company said. The firm said it is establishing an on-the-ground team to bring its development, asset management and capital formation expertise to the GCC.

ESR Group Pipeline and Regional Strategy

ESR said its Middle East strategy combines local market knowledge, relationships and execution capabilities with its development, asset management and capital formation capabilities. The company said it benefits from longstanding relationships with institutions and stakeholders across the region, including those developed through its shareholder base and broader capital partner network.

Drawing on what it described as a proven approach that has supported its growth across multiple markets, ESR said it is engaging with strategic partners and investors to establish a scalable business across the GCC. The company described the move as an extension of its Asia-Pacific platform and strategy, building on its record of developing and scaling institutional-grade logistics platforms in high-growth markets.

The stated pipeline implies an indicative average end value of more than US$3,333 per square meter, though the figure is not a valuation or expected return, as the pipeline likely combines different asset types, development stages and markets.

Supply Shortage in GCC Logistics Real Estate

ESR said economic growth, expanding trade corridors, evolving supply chains and rising institutional investment are driving demand for modern logistics and digital infrastructure across the GCC. Institutional-grade logistics facilities account for less than 20% of total stock in the UAE and less than 10% in Saudi Arabia, the company said, which it linked to near-full occupancy of Grade A facilities in those markets.

Saudi national warehouse occupancy was approximately 97% to 98% in the first half of 2025, with Riyadh particularly constrained. Warehouse rents rose 16% year over year in Riyadh and 8% in Jeddah, while Dammam recorded 96% occupancy across about 8 million square meters of stock.

The Saudi logistics development pipeline is rising sharply, and new projects are expected to bring some rent stabilization or softening in selected locations toward the end of 2026.

Data Center Demand Across the Gulf

The GCC data center market attracted approximately US$5.46 billion of investment in 2025 and is forecast to reach US$15.39 billion by 2031, an 18.85% compound annual growth rate. Demand is being driven by cloud adoption, AI workloads, smart-city programs, e-government, fintech and e-commerce.

More than 174 major active and planned data center projects across the GCC carry a combined reported value exceeding US$93 billion. One industry forecast expects Saudi Arabia to account for roughly 35% of Middle East data center investment by 2031. Regional instability, material shortages, infrastructure vulnerability, higher energy costs and more expensive capital are cited risks to data center development.

Executive Commentary and Team Build-Out

Stuart Gibson, co-founder and co-CEO of ESR, said: "The GCC presents a compelling opportunity for ESR to bring together our development, fund management, and operating capabilities in a region characterised by economic dynamism, sustained infrastructure investment and resilient long-term fundamentals."

Gibson added: "Across our portfolio, we have helped shape logistics markets by delivering institutional-grade facilities that combine operational excellence with human-centric design. As markets evolve, we believe success is defined not only by scale, but by our ability to raise standards for customers and create environments where people and businesses can thrive. Our ambition is to bring that same approach to the GCC, providing customers with the quality, functionality and experience that they have come to expect from ESR."

Phil Pearce, president of ESR, said: "The Middle East sits at the intersection of some of the world's most important trade and investment corridors and is experiencing strong demand for modern logistics infrastructure. By combining local market expertise with ESR's logistics real estate and data centre capabilities, longstanding relationships with regional stakeholders, and a global network of institutional capital partners, we are well positioned to support the next phase of the region's logistics and industrial development. Our ambition is to build a durable regional platform that delivers long-term value for customers, investors, and communities across the GCC."

ESR said it has already made senior hires and established an on-the-ground team spanning development, investment and asset management. The team is leading project origination and delivery, capital deployment and strategic partnerships across the GCC, with capabilities continuing to expand as the business grows.

Market Implications for Real Estate Development

ESR is an Asia-Pacific real asset owner and manager focused on logistics real estate and data centers. The company's news archive also lists an US$850 million financing intended to accelerate long-term growth. The expansion is consistent with ESR's concentration on sectors benefiting from long-term structural demand.

For real estate development in the region, current undersupply and high occupancy support the case for new industrial projects, while the expanding supply pipeline suggests location, trade corridor access and product quality will be important to performance. Data center development requires reliable power, cooling, fiber connectivity and long-term utility planning, creating higher barriers to entry than conventional warehouses. ESR will compete with hyperscalers, telecom operators, sovereign-linked entities, specialist data center developers and global infrastructure funds for power, land, construction capacity, tenants and institutional capital.

Sources

ESR, "ESR Announces Strategic Expansion into the Middle East," Oct. 8, 2026: https://www.esr.com/news/esr-announces-middle-east-expansion/