Kuwait warehouse shortage pushes costs higher as storage crisis deepens

Kuwait’s warehousing sector is facing mounting pressure due to a shortage of storage space, real estate experts say, warning that the imbalance between supply and demand is driving up costs and exposing structural risks to the economy. Demand from logistics, retail, and import-dependent industries continues to grow, while available capacity remains limited, creating a widening gap in the market.

Experts estimate total storage capacity at around 21 square kilometres, which they describe as insufficient for current requirements. This shortfall has led to a sharp rise in land prices and warehouse rents across several industrial zones. In areas such as Ardiya, rental rates have reportedly doubled since the COVID-19 pandemic, with further increases observed after tighter regulations and disruptions linked to recent incidents affecting storage facilities.

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A major concern highlighted by analysts is the spread of unlicensed warehouses, which operate outside safety and regulatory frameworks. These facilities are often able to offer lower prices due to reduced compliance costs, creating unfair competition for licensed operators. Authorities have also linked some unregulated sites to fire incidents that resulted in casualties, raising concerns about safety standards and enforcement gaps in the sector.

Government initiatives to identify unused land and expand designated storage zones are seen as a step toward easing pressure, but experts say implementation remains slow. Proposed solutions include offering new storage projects under investment models, accelerating licensing procedures, and classifying warehouses by activity such as food storage and logistics. Analysts stress that improving regulatory oversight and expanding modern infrastructure will be essential to stabilise prices, enhance safety, and strengthen Kuwait’s supply chain resilience amid growing regional and global economic pressures.