According to a report released earlier this year by BMI, a unit of Fitch Ratings, the sultanate of Oman is expected to see growth in its economy this year and the next, thanks to a variety of factors, including increased rising oil and gas production boosting exports.
However, another significant factor in its growth is increased investment from the government of Oman in the non-oil sector as it looks to diversify revenues.
Among the chief beneficiaries of this increased investment are the construction, retail, tourism and hospitality sectors, with the government keen to develop the country as a new destination for international investors, tourists and businesses.
With growing demand in young markets and an increasing interest among residents for new lifestyle experiences, coupled with rising tourism numbers, Oman’s retail sector is seen as a prime candidate for investment by investors and developers both within the country and regionally.
This market confidence is attributed to Oman’s positive economic growth, which is projected to rise to 2.9% this year, from 1.1% in 2017, a report from Colliers International says. In the GCC, Oman is seen as the fastest growing economy, with tourism a key component as arrivals are expected to increase at a compound annual growth rate of 13% between 2018 and 2021, it added.
As a result, retail space investment in Oman has been growing in recent years, with major developers setting up large-scale shopping malls and retail outlets in cities like Muscat, Sohar and Nizwa.
Despite the likes of Majid Al Futtaim entering the retail landscape, local developers still hold sway in the market, and none more so than the Al Raid Group, which is set to launch its latest project, the Al Araimi Boulevard (ABLVD) mall, in Q4 2018.
Located close to the Muscat International Airport, the mall – which has a built-up area of 155,427sqm across two levels – aims to reshape the retail landscape of Oman. According to Sheikh Raid Bin Abdullah Al Araimi, vice chairman of the Al Raid Group, the project has been designed to be a destination mall, adhering to current and future international standards and ideals for retail.
“The idea was to develop this project so that it’s in line with the new direction of mall building, while at the same time trying to create an offering that’s in line with the future of retail. With e-commerce being a very big thing in the market today, shopping malls have become places where people like to come and socialise, have a good dining experience and to spend the day there. It has to be attractive to all segments of society,” he tells Big Project MEduring a tour of the project’s construction site.
“We designed and built Al Araimi Boulevard to carry the retail experience to another level, with different technologies being used, focusing a lot on customer service and creating an added value. We aim to ensure that retailers make a great return on their investments – our target is to have these retailers generate the highest returns per square foot. We will do that by attracting a lot of footfall, which will only come when there are excellent entertainment and F&B offerings.”
Billed as one of the largest shopping, entertainment and lifestyle destinations on offer in Oman, Al Araimi Boulevard will combine “cutting-edge technology, design and emerging concepts” to create a world-class, state-of-the-art facility, says Sheikh Raid.
He explains that the mall has been built in a very different way to traditional Omani retail outlets, with the architect’s design ensuring plenty of access to visitors, whether in vehicles or on foot. There are more than 3,000 parking spots available – 1,100 on road level, 1,200 on the mall rooftop and a further 800 around the mall – and several access points, entrances and ramps available to ensure ease of access and flexibility.
There are 11 entrances on the lower ground and ground levels, while the rooftop has four main entry points. He adds that a key element of the design was to ensure the flexibility of access at all points, and as part of that process, the project team also developed all the roads outside the mall.
Al Araimi Boulevard will be built across three levels – two above ground and one below – and will feature landscaping and several public spaces, including the boulevard which gives the mall its name. This open area will feature water features and fountains, along with a stage that will host daily or weekly shows. Furthermore, it will be ringed with food and beverage outlets, including five specially designed restaurant spaces that will operate independently of the mall’s opening hours. The sultanate’s largest food court area will also be housed within the mall.
However, the key feature is the mall’s massive 5,190sqm skylight, which will illuminate the mall through natural lighting during the day. In addition, the glass panels have been specially treated to ensure that while light is let in, heat is reflected back, ensuring that the ambient temperature of the mall stays at a reasonable level.
“This is the largest skylight in Oman. It allows 38% of light to come in. When you have a skylight of this scale illuminating the place, you have huge savings on electricity,” Sheikh Raid says. “Especially when it’s been treated in such a way that it doesn’t allow the heat to come in, so that way you save on cooling too.”
Sustainability plays a big part in the design of the mall, he asserts, pointing out that the water used in the mall will be recycled for irrigation of the landscaping, while the materials used for the interiors have been locally sourced. For example, the flooring is natural Omani marble, which is good for retaining coolness.
Furthermore, the intention was to use new technology on the skylight panels that would help turn it into a solar panel. However, that didn’t quite come to pass, he reveals.
“There is new technology that allows you to use photovoltaic cells that are transparent. This was the intention initially, to use them as part of the skylight. But due to the size of the skylight and the cutting challenges the factory had with curved glass panels, it wasn’t quite possible to do it on such a large scale. So we’ve decided to use it for the car shading area, where it’s more practical, possible and standardised.”
Despite this hiccup, Sheikh Raid describes the construction process for the mall as relatively straightforward, highlighting the coordination and planning undertaken by the developer prior to construction as being key to overall smooth delivery of the project.
“It’s a very straightforward process. We had the design completed, we tendered the project and we looked at the contractors who had the best track record historically, who have delivered huge projects, and their technical qualifications. The subcontractors who are involved in this project also have to be scrutinised so that we know that they’re capable of delivering on what they promised.
“When it comes to consultants, we needed to have very strong MEP and structural consultants, as well as a strong project manager. We had all those involved from day one. This really tends to speed up the construction process, because all the specialists are there on board from the start, and they can coordinate with each other quite effectively.”
The contractor tasked with delivering the project is Unique Contracting Company, one of Oman’s oldest, strongest and best contractors, he asserts. “They have delivered projects on time and ahead of schedule and are very well managed and organised. They deliver top quality always.”
This pedigree was important to Sheikh Raid and the ABLVD team, since the main contractor on the project would be responsible for all aspects of construction.
“We signed with the main contractor only, they are responsible in front of the client. We did not intend to create different packages for different contractors, because that creates a big mess. So the entire contract was provided to the contractor, and because this is a very specialised job, they may have been required to subcontract some parts of it to specialists. But that’s in relation to specialist jobs, such as the skylight, the chilled water system packages and so on.”
Another key aspect of the smooth process was the use of perfect shop drawings from the start of construction, he explains.
“The good thing that we do is that we tried to create perfect drawings from day one. All of the drawings produced in AutoCAD are quite detailed, and all of the subcontractors who were quoting or bidding for these specialised jobs already knew what they had to deliver. Therefore, when you have very strong coordination and you’ve down-listed all your suppliers according to your specifications – which is according to your bill of quantities or your quantity surveyor – then you do not find challenges, because everybody knows exactly what to do and when to do it. There’s a very clear schedule of work that’s developed, with very clear timelines.”
With the handover date rapidly approaching, Sheikh Raid is keen to stress that the mall will be delivered on time, as per schedule. As he is quick to point out, there is a perception that Omani construction projects tend to operate on their own time scales and often face delays. However, he insists that Al Araimi Boulevard will not follow a similar path, highlighting that part of his commitment to building a mall that meets international standards is delivering it on schedule, so that retailers investing in the mall begin to see results almost straight away.
“One of the challenges that exists in the retail industry is that a mall developer never completes on time. Retailers tend to have the doubt that you’ll be able to complete your project as promised. This has happened in Oman with almost every project that I know of – they announce it, and then it’s delayed. When we mentioned that we’ll have our project ready within two years’ time, that we’d open on this date and that the project will be fully completed from a construction perspective, with interiors, fit-out, lighting, road networks and external landscapes, retailers found it a bit difficult to believe.
“Our main challenge now is trying to have the retailers – all of them – complete their fit-out on time. Many of those who have taken retail units are happy with the progress of the project, and they’ve really started to expedite their work. They’re all on track,” he asserts confidently.
Once up and running, ABLVD will form a key part of the Al Raid Group’s strategy, Sheikh Raid says, explaining that when the strategy was formulated a few years ago, it was developed around building shopping malls in Oman.
“Real estate investment is very wide – you have people who invest in hospitality, residential, office, mixed-use projects, logistics, etc. But we decided that we would only concentrate on hospitality and retail, especially retail, and on big shopping malls. We completed the Strip Mall this year, and we’ll complete Al Araimi Boulevard. We have announced Al Araimi Walk, which is to be completed by 2020. It’s in line with our vision and the strategy that we’ve made. I think it’s a result of our understanding of the market and the economy, and what is lacking.
“I think that this project will set the benchmark for how malls are built. Not just in the offering or by way of design, but if you look at this project, it allows shoppers to have an outdoor experience and an indoor experience. It has huge volumes and it focuses on common spaces, public spaces for people to come and sit, and not necessarily pay for a product. It focuses on diversified entertainment, from cinemas through to theme parks, through casual dining experiences, which are all done in such a way that you have different offerings at different prices.
“You also have the first outdoor dancing fountains in Oman, with pyrotechnics. You have an events stage, you have nice external pavilions that overlook the mall and the fountains. This is going to set the benchmark for future malls in Oman.”
As the tour draws to a close, Sheikh Raid is also keen to stress that while this mall has been a labour of love for him and the Al Araimi Boulevard project team, completing the project in such a smooth and timely fashion wouldn’t have been possible without the backing and support of the Omani government.
“Frankly, this project has succeeded because of the tremendous support the government provides to serious investors, and we have had no challenge whatsoever in bringing this project to reality [because of that]. If you look at this project, it’s more than 139,000sqm and it’s been built in two years’ time. It’s a very fast pace for a project of this scale.
“If you look at the road network infrastructure, the electric power supply, the telecommunications – every single infrastructure element has been very well coordinated with different authorities to bring this project to reality. The approvals have been extremely fast.
“Therefore, the success of this project is due in a very big part to the encouragement and the very strong push that we’ve had from the different authorities,” he concludes.
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