In Dubai, warehousing, logistics markets get bigger - and Al Khayyat Investments is at center of it

Dubai: With warehousing and logistics real estate in Dubai trending, Al Khayyat Investments has opened a 1 million square feet facility in Dubai Industrial City – and with plans to go for more. And that could take AKI into Saudi Arabia too.

“We're looking at new plots for another facility in Dubai, whether in Dubai Industrial City itself or elsewhere,” said Zaid S. Al Khayyat, Managing Director of AKI, a Dubai based family group that has interests in retail, FMCG, real estate and more.

“We've heard that there are some new plots that will be launched, and we consider what gives us geographical extension in Dubai. Saudi Arabia - we're also looking at that too - and in Oman.”

A lot has been happening in UAE’s warehousing industry and real estate between Covid breakout and now. The industry started the whole process of ‘near-shoring’ to ensure better management supply chain. There is also the ecommerce boom that continues to place heavy premium on the fastest logistics and warehousing processes.

In the recent past, the likes of Abu Dhabi’s Aldar and global investment fund manager Brookfield have made significant bets on the supply chain sector here.

But for Al Khayyat Investments, it’s not a business that it got into recently.

“We're in DIP (Dubai Investments Park) 1,” said Al Khayyat. “We were one of the first movers into DIP actually, around 2008-09.

“Back then, it was the largest facility we had built. But we've been in the distribution, logistics, and supply chain business since 1982.

“It's been quite some time.”

With the new investments in Dubai Industrial City, AKI clearly sees the rationale in scaling up logistics-focused assets - and fast.

The DIC facility already handles over half a million units per day, with the capacity to scale up to 1.5 million units

There is also space to expand by nearly 200,000 sq ft in the near future. The entity will serve more than 30,000 business customers, as well as ‘support home delivery services for consumers across the UAE who enjoy AKI’s retail and e-commerce offerings’.

So, a lot of the capacity will be utilized in-house by the group.

“AKI is an exclusive distributor to a lot of international brands where we do everything from sales to the marketing to the logistics part, leveraging the supply chain we have,” said Al Khayyat.

“We also have a 3PL (third-party logistics) business, launched at the beginning of this year. We have already been awarded a major contract from a Dubai Government entity to do their full supply chain operations.

“Closer to 80%-85% of the DIC capacity will be for our own business - and we have big plans for that.

“Our 3PL is already a growing business, there are a lot of multinationals looking for that service. The tech is there, the infrastructure is there. So definitely, there's huge opportunity in the 3PL business.”

Until recently, warehousing in the UAE was primarily about being near airports and seaports, with free zones thrown into the mix. Now, there is a new element coming into play – Etihad Rail.

“(The DIC facility’s) proximity to Etihad Rail cargo operations also fits with our plans, connecting Dubai, Abu Dhabi, and the rest of the emirates,” said Al Khayyat. “That is quite new. But we are always looking at ways we can utilize the strong infrastructure that the UAE has built for the supply chain ecosystem.”

Sure makes sense because the business of warehousing and supply chain just keeps on giving…