Mixing it up: New projects are adding value to the industrial and tourism sectors

As Oman’s construction sector grows, the types of building projects under way are becoming more diversified. One of the most significant trends is the increase of mixed-use developments. In terms of housing, mixed-used developments are becoming more popular among Omanis – who typically prefer villas – because of the improved quality of the residential units. In addition to this increased demand, well-built, mixed-use developments raise the value of a property, thus adding to the attractiveness of such projects for local developers.

Initial Phase

A number of notable developments in Oman are either under construction or in the design phase. The Muscat-based Al Sharqiya Real Estate Developers, for example, announced plans in mid-2012 to build a large mixed-use development in Sur in northeast Al Sharqiya after signing a memorandum of understanding (MoU) with PEIE in early 2012. Known as Sur Gate, the development will be built on the Sur Industrial Estate which covers 36.1m sq metres and is managed by the Public Establishment for Industrial Estates (PEIE). Sur Gate will stretch over 200,000 sq metres and implementation of the first phase was started in mid-2012. In addition, investment in the project should reach more than OR120m ($313m), according to recent figures provided by the PEIE.

Sur Gate will be made up of a shopping mall measuring 58,437 sq metres, a commercial area (25,670 sq metres), a hypermarket (11,812 sq metres), a business centre (20,127 sq metres) and townhouses of various sizes. An accommodation complex measuring almost 6000 sq metres will be built for industrial estate employees. Furthermore, the project is expected to create over 500 jobs, with 70% of the positions allocated to Omanis, according to PEIE data.

A coastal city about 150 km from the capital, Sur is becoming a centre for industry as well as tourism. A number of large firms, such as Oman LNG Company, National Gas Company Oman and Oman India Fertiliser Company, have moved into the area. The Al Sharqiya region is also a popular spot for ecotourists. Set to become operational by the end of 2014, the nearby Ras Al Hadd Airport should increase accessibility to the area for tourists and business travellers.

The addition of Sur Gate is expected to add substantial value to both Sur’s industry and tourism sectors.

“We see great opportunity for development in the tourism sector with the government’s vision being very robust in this area and a number of hotels in the planning process,” said Andy Jones, the CEO of Carillion Alawi, a construction project planning firm.

Entertainment

Another mixed-use development under way in Oman is Salalah World. Located in the southern Dhofar region, Salalah World is being developed by Al Reef Real Estate Company (RREC), a subsidiary of Kuwaiti United Real Estate Company (URC).

The development will include a multi-storey hypermarket, a shopping mall, restaurants and cafes, a landscaped theme park, billiard rooms, a multiplex cinema, bowling alleys, apartments and a hotel. The hotel will be built to four-star standards, though RREC aims to eventually upgrade to a five-star rating. One of Salalah World’s lead tenants will be Carrefour, which will operate out of a 9000-sq-metre retail space.

While Salalah World is being built on land owned by the government, URC is the landlord. URC also has a contract with the municipality to build all of the road infrastructure around the site. The delivery date for the entire complex was mid-2012; however, full handover will likely not be completed until 2013.

Health Focus

Construction on an additional mixed-use development in Salalah is scheduled to begin before the end of 2012. A medical tourism centre known as the International Medical City (IMC) is being developed by the Apex Medical Group, which is part of the Saudi Arabia-based Al Joaib Holding. The new medical facility will cover a space of 800,000 sq metres and provide a multi-specialty, 530-bed hospital. Other features will include a luxury hotel, a diagnostic centre, a wellness centre, an organ transplant centre, a research and development facility, and a health care resort. Advisors from US-based Kane Healthcare Consulting Group, Ernst & Young and UK engineering design firm Atkins completed market, operational, regulatory and financial feasibility studies for the IMC project in early 2012.

New Links

The property division of Qatar’s sovereign wealth fund, Qatari Diar, also aims to develop mixed-use tourism facilities. In July 2012 the firm signed an MoU with Oman’s Ministry of Tourism (MoT) to construct three such developments, creating a partnership between the two entities; Qatari Diar has a 70% stake and the MoT has a 30% share in the three projects.

The first development will be in Ras Al Hadd and will include a five-star hotel and spa, apartments, residential villas, souks, villa plots and a marina. The locations of the other two developments have yet to be announced, but Qatari Diar indicated that the second development would be composed of residential villas and apartments as well as a five-star resort hotel and spa. The third project will include three boutique hotels, a sports academy, a marina and a yacht club.

In The Works

One significant multi-use tourism projects to be built is the Oman Convention and Exhibition Centre (OCEC). Still in the design stage, the OCEC is being developed by Omran, a government-owned development, investment and asset management firm focused on the tourism sector. The OCEC will consist of two primary components. The convention centre will include a 3200-seat auditorium, 14 meeting rooms, two ballrooms and an open exhibition area measuring 22,000 sq metres. The second component will be a five-star hotel with 300 rooms connected to the convention centre and a four-star hotel, which will have 300 rooms; two four-star hotels with a combined total of 400 rooms; a large shopping area; and serviced apartments.

The OCEC will be built in Muscat in the Al Irfan business district of Bawsher and various firms have already been awarded contracts to work on the development. WATG, a design consultancy based in Hawaii, will be the project’s master planner and architect. Bureau Veritas, a multinational company headquartered in France, will be working as the leadership in energy and environmental design consultant for the development.

In Completion

The Al Tilal Complex, another multi-use development in Muscat, was recently finished. Developed by the locally-based Al Madina Real Estate Company, the Al Tilal Complex is located in the Al Khuwair area of the capital. The development includes 180 residential apartments, 110 service apartments, 40, 000-sq-metres of office space and a shopping mall. Known as Muscat Grand Mall, the Al Tilal Complex’s shopping centre covers an area of 62,000 sq metres and offers 160 retail units, according to figures provided by the UK property consultancy Cluttons. The shopping centre is anchored by a Carrefour Express. A five-star hotel is proposed for Al Tilal Complex’s second phase.

Many see promise in mixed-use developments. “These developments combine elements in a cooperative relationship. This attracts both consumers and investors, adding substantial value to the development,” said Abdullah Sarhan Al Alawi, the business development manager at UK construction firm Carillion Alawi.