Oman – Tourism and infrastructure development offer construction jobs for years to come

The Sultanate of Oman, one of the six GCC (Gulf Cooperation Council) countries, is looking to tourism to sustain its economy in to the future.

In recent years, a change in law regarding foreign freehold ownership has resulted in foreigners being allowed to own property in designated integrated tourism areas. Land prices in Oman are estimated to be roughly 50 per cent of those in Dubai, and 65 per cent of those in Bahrain.
In terms of real estate the recent trend has been towards ownership of apartments. In the commercial property sector the recent increased movement of foreign firms in to Oman has resulted in a major shortages in commercial properties. However, the retail success of neighbouring Dubai has meant that the Omani retail sector is developing less quickly.

Construction projects
Oman has its fair share of ambitious development schemes, and much is hinged on a Development Plan that will see many of these schemes completed before 2020.
Of the large-scale developments currently under construction, the €20bn Blue City has to be the most exciting. But The Wave, Shalam Yiti and Oman’s first rail line have also been grabbing the headlines in recent years.

• Blue City was launched in 2005 and is being built on over 35sq km of some of Oman’s most breathtaking beaches, about 100kms north of the capital city, Muscat. The first phase of the 15-year project, AL-Madina Al-Zarqa ($1.8bn) is due for completion in 2009. When completed in 2020, Blue City is expected to accommodate 200,000 people.
• The Wave is a $1bn tourism Joint Venture involving the Omani Government, Majid Al Futtaim Investments (MAFI) and the Omani Pensions Fund. It is due for completion in 2012.
• Salam Yiti is a $1.7bn mountainside resort project located between the Al Hajar Ash Sharqi Mountains and the Gulf of Oman. The development is also only a 15-minute drive from Muscat. Spread across 420-hectares and rising to a height of 140m above sea level, and it will include golf courses and marinas. Salam Yiti is being developed by Sama Dubai and is scheduled for completion by 2013.
• Oman is quite unique in the world in that it has no railway network. In early 2008, the Omani Government unveiled plans for the country’s first rail line. The line will initially be used to transport goods, with passengers on board at a later stage. While it is still very much at planning stage, the line is planned connect the Sohar Port with Birka on the outskirts of Muscat, covering a distance of 200km. It will then be extended to Duqm, where there are plans to develop a new seaport and airport at a later stage.

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Bahrain – Small Island, Big Ambitions

In order to overcome the challenge of limited development space, Dubai came up with the brainwave of creating a man-made island to create more beachfront. In 2001, this idea evolved in to The Palm Jumeriah, and the ‘The World’ collection of private islands followed soon after.

The island Kingdom of Bahrain (at 665-sq km is two thirds the size of County Louth) has been similarly affected by the scale of development that has taken place in the state over the past few decades. With a minimum of land available for development, property values have risen dramatically in recent years, and the island is now very much focused on diversifying the range of developments that take place in the coming years. It has also taken the opportunity to create its own version of the man-made island series.

Bahrain is considered to be the fastest growing economy in the Arab world, fastest growing financial centre in the world, and it is also considered to be the freest economy in the Middle East.

So, it should be no surprise that in recent years many multi nationals have chosen Bahrain as the location for their regional headquarters, bringing many experienced senior managers to the island. Foreign residents account for about 40 per cent of Bahrain’s 700,000 population.

Major projects currently on site in Bahrain include The Bahrain Financial Harbour (€900m), Durrat al Bahrain (A €2.1bn series of 15 man-made islands), Health Island Project (€700m)), Al Areen Resort (€750m) and Rifa Views (€300m).

One of the most exciting construction projects to be completed in the Gulf States this year is the 50-floor Bahrain-based World Trade Centre. This twin tower development, ironically for an oil rich state, has three giant wind turbines bridging the gap between the towers. It is the first skyscraper in the world to integrate wind turbines into its design.

Bahrain International Investment Park
Bahrain's jewel development mega project is the Bahrain International Investment Park (BIIP) . This is being developed in the Hidd Industrial Area, and covers over 250 hectares with 25.5km of readily equipped infrastructure such as roads, street lighting, sewage systems, landscaping and desalination systems. BIIP offers 100 per cent foreign ownership of companies, zero per cent tax with a ten-year guarantee, special customs services and no recruitment restrictions.

At the end of September Bahrain's government approved a monorail train network to ease traffic flow on the island. The three-stage development plan is expected to be completed by 2030.

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Saudi Arabia – The giant that still sleeps

The Kingdom of Saudi Arabia is located at the centre of the emerging Gulf States. It has a population of over 27 million people and, at approximately 2.15 sq km in area (some borders in dispute), it is the largest country in the Middle East.

With a per capita income of €20,700, Saudi Arabia is one of the fastest growing countries in the world. However, in terms of development activity Saudi Arabia has been one of the slower Gulf states to kick in to action. Sometimes referred to as a ‘sleeping giant’, it has to date been more conservative than some other Gulf states, and it has not exploited its development potential with the vigour of some of its neighbours to date. But should this change, it would be expected to outperform all other construction markets in the region.

Projects
At the centre of its development ambitions are six economic cities. King Abdullah Economic City is the largest of these mega projects, and it is planned for completion in 2020. The creation of these six industrialised cities will spearhead Saudi Arabia’s move away from dependency on oil and gas. Further infrastructure development will include a number of major port and railway projects, such as a 950km rail link between the capital Riyadh and the coastal city of Jeddah.

According to NCB Capital, in the coming years demand for residential units in Saudi Arabia will exceed 1.3million units. Recently amended Saudi investment laws now allow foreign investors to invest in a limited number of identified projects.

In the capital city Riyadh, there is a considerable shortage of housing, particularly amongst the lower and middle classes. Growing demand in these markets is expected to drive residential development activity in the capital for at least the next five years.

Outside of Riyadh, major residential projects include Al Khobar Lakes, the first phase of which covers 2.6million sq m, and says the developer, Emaar Middle East, ‘this has a development value of SR4.6bn (€830m). Al Khobar Lakes is one of the largest master-planned communities in the Eastern Province of Saudi Arabia and is located close to Al Khobar City, Dhahran and Dammam.

Another high profile residential scheme called Jeddah Gate is a €490m, 5,000 unit development which is currently on site at the old Jeddah Airport.

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Qatar's mega growth ambition

According to The New York Times the Arabic emirate of Qatar will be the next Dubai. Its capital, Doha, has a population of 400,000 people and, according to the Qatar Tourism Authority, more than 100 buildings, including hotel towers, business centres and holiday resorts will cover the cities skyline in the coming years.

With a population of less than a million people Qatar has a construction market with a value of €70 billion. And when you include construction activity in the oil and gas sectors you can add a further €38.5 billion to the figure, bringing the overall market value to €108.5 billion.
Qatar’s Gross Domestic Product (GDP) per capita is the largest of all the Arabic States (IMF). And with no income tax, Qatar is also one of the two least-taxed sovereign states in the world, Bahrain being the other.

In terms of getting projects to site, Qatar's government and construction industry are no slouches. The state has the best record of the GCC (Gulf Cooperation Council) in getting developments to site, with over one third of the currently planned €70billion worth of construction projects started construction, and the balance at design or construction stage.

Spearheading Qatar’s plans to divert away from a reliance on fossil fuels in the coming years will be its financial and leisure industries. Qatar will need to raise the capacity of its financial services to meet the requirements for more than $130billion worth of projects in the coming years, if it is meet its lofty ambitions. The Qatar Financial Centre (QFC) is in fact expected to provide financial services providers with access to nearly $1trillion of investment across the GCC as a whole over the next decade.

When compared to other Arab states, Qatar has relatively liberal laws. However, it still has some way to go to match its neighbouring states, UAE or Bahrain.

Mega Project
The largest project ever undertaken in Qatar is the new City of Lusail. It is currently under construction and is expected to be completed by 2011. A coastal development, in the northern part of the municipality of Umm Salal, Lusail is 15km north of Doha City centre and is located on over 35-sq km of land. When completed, it will have accommodation for 200,000 people. The development will include residential areas, commercial districts, island resorts, marinas, leisure facilities (including two golf courses and an entertainment district) and luxury shopping.

Lusail is being built in phases with the whole project due for completion in 2011. It is being developed by the state controlled developer Qatari Diar Real Estate Investment.

Another Qatar mega projects is The Pearl, a $2.5billion, 985-acre artificial island comprising five-star hotels and two-million square feet of high-end shopping. Work will begin on the first phase of The Pearl in 2009, Other projects include the Sharq Village & Spa, along the beachfront and the IM Pei designed modernist Museum of Islamic Arts.

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