Muscat: It was once the beating commercial heart of Oman, but a new report suggests that the capital’s Central Business District’s (CBD’s) popularity is fading as more and more big firms relocate.
Real-estate agents revealed that office rents in CBD have nearly halved during the recent years.
With the National Bank of Oman’s headquarters being relocated to Azaiba very soon, Bank Muscat’s headquarters having shifted to Seeb and many other offices shifting to Al Khuwair and Ghubrah in the recent years, real-estate companies in CBD are desperately looking for tenants.
A new report reveals that rents have fallen sharply in almost all locations, with CBD being affected more than the others. “Occupancy is even more of a problem than in the residential segment with owners suffering long periods of vacancy.
Rents in CBD are OMR3 per square metre (sqm) per month and sometimes even lower,” Sudhakar Reddy, chief executive officer, Al Habib & Co LLC said, after releasing the Property Report in October 2017.
He attributed this to the banks moving away from the CBD. “As a large number of banks moved away from CBD, the office rents dropped considerably,” Reddy said.
The office rent in CBD, which was around OMR5 to OMR6 per sqm per month a few years back has now dropped to OMR3.
“Still, there are a very few takers,” admitted another real-estate agent.
“The city has been shifting away from Ruwi and vacancy levels are high, especially in old buildings. We can say these properties are financially under pressure. Rents are comparatively higher from Qurum towards Seeb,” he added.
“Since the traffic is very high in Ruwi, a large number of companies have shifted their operations to Azaiba and Ghubrah as people are living on the outskirts of the city find it difficult to commute,” Ahmed Al Hooti, an OCCI member said.
“I think better and quicker communication is required where people can access CBD quickly from the Seeb or Amerat side, which will persuade more business houses to set up their business in CBD,” Al Hooti said.
The Property Report, October 2017, said that in the more attractive areas of Qurum, Al Khuwair, and Azaibah, rents are OMR5 to OMR6 per sqm per month and sometimes below. “However, there is a small premium of about OMR1 to OMR2 per sqm per month in case the property is a grade A office space with good parking ratios,” the report said.
“A very small number of office space properties are being offered for outright sale and there appears to be good demand for these. Prices vary from OMR600 per sqm to OMR950 per sqm, depending on facilities, such as raised floors, high quality elevation, state-of-the-art security systems, adequate parking. etc,” the report added.
The Property Report, October 2017, said even as retail malls/outlets grow exponentially, the slowing economy has led to a slowdown in retail sales and retailers are feeling the pressure.
“They are negotiating lower rents and longer rent-free periods. The weaker and older malls are coming under a lot of pressure in retaining retailers and maintaining rents. Even with softness in the retail sector, popular high streets, such as the Ruwi high street, the Seeb souq and the Al Khoudh souq are able to retain their retailers and maintain rents,” the report added.