29/04/2015 16:52 AST
The steady flow of investments from the Oman government towards the development of key infrastructure has helped in boosting the country's industrial property market in the first quarter, according to a report.
This investment will be a major driver in transforming the sultanate into a major logistics hub in the southern Gulf, according to the latest research report by top real estate consultancy Cluttons.
The warehouse sector is set to be a stand-out performer in the commercial market, with improved infrastructure and connectivity driving demand from occupiers, and catalysing the development of modern warehouse estates, stated Cluttons in its Spring 2015 Muscat Commercial Property Outlook report.
"We are recording an increase in warehouse developments coming to market to meet the current demand," noted Philip Paul, the head of Cluttons Oman.
"In Rumais, which is located to the west of Muscat International Airport, First Logistic Services is developing warehousing units ranging in size from 500-1,000 sq m on an 81,000 sq m site," he added.
According to Paul, the first phase, comprising 36 units, is due for completion in May. The development is strategically positioned for occupants looking to service Muscat and interior markets in the wake of the closure of Port Sultan Qaboos, he stated.
“The developer is also offering “build to suit” opportunities within the second phase of the scheme in response to the success of the first phase, highlighting the depth of the demand in the market,” he added.
The Cluttons report revealed that the country’s various transport infrastructure project investments and upgrades were playing an important role in boosting connectivity across the country, which was subsequently improving Oman’s attractiveness as a regional logistics and distribution centre.
International research and business development manager at Cluttons, Faisal Durrani said: "Due to Oman’s high scores for market connectedness and compatibility, the sultanate has maintained its ranking of 13th in Agility’s Emerging Markets Logistics Index for 2014 and this is reflected in the requirements we are currently receiving from shipping and logistics firms."
"At Sohar Port City for instance, these firms remain the most active group. The growing importance of Sohar Port is mirrored in the number of containers and vehicles handled by the port, which rose by 61 per cent and 99 per cent respectively during 2014," he added.
Sohar’s connectivity is also expected to be further bolstered by the Muscat to Barka section of the Batinah Expressway, which is due to open in June this year, while progress on Oman’s rail network is gathering pace, with the construction contract expected to be awarded in mid-2015, covering the 207-km stretch between Sohar and Buraimi.
On the office market, Cluttons said the rents across the main submarkets remained unchanged last year and during the first quarter as well, thus marking the fifth consecutive quarter of rental stagnation.
"With the fall in oil prices, and hydrocarbon linked occupiers still forming the backbone of demand for office space, we are slowly starting to see this impact the rate of take up as global oil businesses assess their finances," stated Durrani.
"We believe that take up activity may be subsequently impacted and is something we will be monitoring closely as the year progresses and the low oil price environment lingers," he noted.
Paul said the grade A rents were however still holding in the RO7-10 ($18-26) per sq m range across Muscat and occupiers remained focussed on this higher quality space, which is relatively limited.
"At Beach One for instance, we continue to record a high level of interest in the building, which has achieved over 85 per cent occupancy," he noted.
Trade Arabia
Please wait...
