Hundreds of new automotive garages, various showrooms and warehouses are scheduled to be constructed west of Al Wakrah over the next three years, giving residents and businesses a badly needed alternative to the Industrial Area, officials have said.

Yesterday, the Ministry of Economy and Commerce (MEC) held a lottery to allocate some 1,654 land plots of various sizes to local companies as part of its previously announced logistics park project in southern Qatar.

These companies are expected to collectively spend some QR29.2 billion (US$8.02 billion) on the initiative.

The food storage and processing sector is expected to be among the biggest users of the new space, followed by building material storage, manufacturing, contracting, car showrooms, garages, furniture, fashion, electronics and heavy equipment, the ministry said.

According to real estate industry experts, the development is badly needed in a rapidly growing country such as Qatar.

“There’s an undersupply of high-quality industrial space, especially reasonably priced space, in Qatar,” Johnny Archer, an associate director at real estate services firm DTZ Qatar, told Doha News.

Archer pointed to the homebuilding industry as one example of a sector that stands to benefit from the development.

The benefits

Every new villa and flat that’s constructed typically needs window frames, sinks, countertops, doors and other bulky items that must be stored somewhere until they are needed by a contractor.

Currently, businesses that sell such materials are mostly located in the Industrial Area – which, along with a shortage of warehouse space, suffers from poor quality roads in some places.

Others store their inventory in Saudi Arabia or the UAE and then ship small consignments of items to Qatar when needed.

Having high-quality warehouses and logistics space that connects to a modern road network will help businesses in Qatar operate more efficiently, Archer said.

Theoretically, some companies that see their operating costs come down would have the option of passing those savings onto consumers.

The project

After obtaining the necessary building approvals, firms are expected to start construction by early 2017 and begin operating by mid-2018, the government said.

Basic services and infrastructure have already been built in and around some 1,560 acres of land in Al Wakrah South, Birkat Al Aawamer and Aba Seleel.

In an attempt to attract small investors to the project, the government subdivided the land parcels into a variety of sizes ranging from 1,000 square meters to 67,558 square meters.

The land is being leased to investors for a 30-year term that starts at QR40 per square meter per year, which will increase by 5 percent every three years. Buildings must meet various electrical and structural standards as well as feature an “attractive building façade design.”

The logistics zone project is operated by state-run Manateq, which is also overseeing the development of Qatar’s special economic zones.

The zones are a separate initiative from the logistics park, and are typically designed to attract international investment by providing breaks on taxes or import duties as well as relaxing foreign ownership restrictions and visa requirements.

However, no details have yet been provided on how Manateq’s economic zones will operate. The first is being constructed near Hamad International Airport.

Thoughts?