Kuwait government orders Agility to vacate logistics parks

Agility, the second-largest shareholder in logistics giant DSV and new owner of global airport services company Menzies, will absorb a significant financial hit from the Kuwait government’s decision not to renew five contracts for huge warehouse properties.

The government intends to rebid the contracts, which a source in Kuwait says will allow the state to maximize revenue on distribution centers that were leased 20 years ago at rates far below today’s market value. The loss of the contracts is noteworthy because they represent Agility’s most lucrative, highest-margin logistics properties, according to the source.

Agility, with roots in logistics real estate, filed suit to remain the incumbent master leaseholder for the state-owned logistics parks, but a Kuwait court recently dismissed the case.

“Agility believes that the … contracts of the sites that the Public Authority of Industry requests to be vacated have been renewed since Agility has sent notification to the PAI with its willingness to renew those contracts as per the terms of the contract,” the publicly traded company said Jan. 3 in a statement on its website. It plans to appeal the court ruling.

Agility is one of the largest private owners of industrial real estate in the Middle East and Africa. It started in 1979 as the state-owned Public Warehousing Co. providing basic storage services and was privatized in 1997. Over the years it acquired many logistics companies — including Geologists, Transoceanic Shipping, and Global Express Line — and unified its services under the Agility brand in 2004. Agility Logistics became a major global contract logistics provider, managing warehouses and supply chains for multinational corporations. In 2021, Agility sold its global logistics business to Denmark-based DSV, the third-largest logistics service provider in the world by gross revenue, for an 8% share in the company. Today, Agility’s holdings include companies involved in fuel logistics; customs clearance consulting, inspection, and digitization; remote campsite operations for mining and other purposes; property and parking management at Kuwait’s airport; commercial real estate; defense and government logistics support; e-commerce logistics technology; and metal recycling