Subsidies by Qatar drive industrial real estate growth

 11 Sep 2017 - 14:26

Subsidies by Qatar drive industrial real estate growth
Artist's impression of Al Karaana is Manateq's third Special Economic Zone. (Source: Manateq)

By Satish Kanady / The Peninsula

With the government increasingly leveraging its subsidies to start-ups and small and medium enterprises (SMEs), Qatar’s industrial real estate market is growing at an aggressive pace.

The current supply of industrial realty is composed of diverse types of industrial properties ranging from special economic zones, industrial cities to storage and logistics parks. Each of these has been designated to facilitate specific industries and serve as logistic and distribution centres that hold and distribute goods to customers.

Doha Industrial Area, one the oldest industrial areas in Qatar that cater to light and medium industries, is estimated to be nearly 13 million sq m of Gross Leasable Area (GLA). It is a key part of the government’s plan to boost the number of SMEs and they continue to improve its connectivity with the rest of Qatar by upgrading its roads, leading real estate advisory firm ValuStrat said yesterday.

 

 

The three special economic zones launched in 2014 were with the aim of fostering SMEs and for supporting local industries. Ras Bufontas Special Economic Zone, planned over an area of 4 sq km near to Hamad International Airport will in majority cater to businesses offering airfreight and logistical services. Over an area of 34 sq km, Um Al Houl Special Economic Zone will adjoin the new port project to the South of Wakrah, facilitating companies from petrochemical, marine, food & beverage and construction materials.

Ras Bufontas is set to become an advanced technology and logisitc club.

Full information about opportunites in the third zone will be available in 2018.

Phase 1 of both economic zones is expected to be completed by 2018, establishing at least 2 sq km area of industrial property with necessary infrastructure to ensure efficient operation.

Additionally, the government is further expanding Mesaieed Industrial City, home to several downstream petroleum, petrochemical and fertiliser companies, including an industrial zone which will encompass warehouses and distribution centres for light to medium-sized industries specialising in construction materials and machinery.

Along with the above facilities, the government is also developing an integrated warehousing and logistical centres in partnership with private firms in order to improve storage and distribution capacities. In 2015, Manateq introduced logistical parks in four strategic locations namely Al Wakrah, Birkat Al Awamer, Aba Saleel and Jery Al Samur together forming an estimated 3.8 million sq m GLA of warehousing space to be added once fully developed. Moreover, in the same year, Manateq launched four warehousing parks in partnership with four private companies, which upon completion will add approximately 800,000 sq m GLA in North and South of Doha. Amongst these warehousing parks, Bu Sulba warehousing park was completed in the first quarter of 2017.

According to ValuStrat analysts, the industrial real estate sector is expected to excel in the next few years as the majority of world cup related projects will be nearing completion, increasing the urgency to source materials on time. Consequently, there will be a surge in demand for logistics and storage of materials, for example, Qatar Public Works Authority forecasts that projects in the pipeline will require a growing total of 495 million tons of limestone and 126 million tonnes of gabbro out to 2022.

The demand for industrial real estate has largely been driven by the growth of the manufacturing and construction sectors. The rise in the size and number of constructions projects in the past few years has driven the demand for construction materials and logistics & storage. As a result, there has been an increase in modern integrated warehousing solutions provided by major investors.

The majority of these new warehousing parks have been regulated by Manateq to provide competitive rents. For example, Bu Sulba logistic hub is offering QR50-55 per sqm for dry warehouses and QR60-65 per sq m for cold storage facilities.

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