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Why are businesses and residents deserting CBD?

8 Jun 2024 Why is CBD deserted? By M NAJMUZ ZAFAR

Muscat – Once the bustling economic heart of the capital, Central Business District (CBD) in Ruwi is facing challenges as businesses and residential tenants are gradually moving out. Stakeholders are rallying for innovative strategies to revitalise this waning hub.

The decline has been attributed to factors such as insufficient parking and the shift of commercial development to other parts of the city. However, experts believe that a comprehensive approach is necessary to rejuvenate the district.

Ihsan Kharouf, Head of Savills Oman, pinpointed two main factors deterring tenants from CBD. “Expansion of the city towards the west, from Al Khuwayr to Azaiba and further on till Barka, has drawn development away from Ruwi. Additionally, uncertainty regarding the district’s long-term plans has made stakeholders hesitant until the Greater Muscat Structure Plan is finalised,” Kharouf explained.

Ihsan Kharouf, Head of Savills Oman

Providing insights into the office space situation, Ian Gladwin, Executive Director of Al Habib & Co, informed that out of approximately 300,000sqm of net lettable office space in Ruwi, about 85% is obsolete for cutting-edge Grade A business use. “However, the business district is still hugely recognised and continues to host the Central Bank, the Muscat Securities Market, and offers a networked, good infrastructure urban fabric with clear planning and car parking. The rental levels are affordable and it is still very accessible,” Gladwin said.

CBD’s challenges in recent times have come from migration of Omani workforce to the west, and to the suburbs of Al Khoud, Seeb, Mabella and Barka, he added. 

“Al Habib has also seen the need for larger businesses to move closer to mid-town locations to accommodate a westward shift development trend. This has resulted in lower space demand and subsequently lower rental levels in Ruwi.”

Ian Gladwin, Executive Director of Al Habib & Co

Khalid al Balushi and Hamad al Nabhani shared personal experiences of relocating due to the challenges posed by paid and insufficient parking.

Balushi, a residential tenant moved to Bausher owing to the parking crunch, as did Nabhani and his technology business to Al Khuwayr.

A businessman, who wanted to remain anonymous, said that many tenants have moved out of the area due to the unavailability of free parking. “A lot of customers coming for business to the area complain of the parking issue and often incur fines.”

Real estate professional K Kumar noted a resurgence in the real estate market post-COVID-19 but acknowledged that paid parking has made the business district less attractive for residential tenants.

Kharouf, however, believes while parking may have played a part a long time ago, it is no longer a factor. “The parking issue can easily be addressed through allocation of a number of sites to multi-storey carparks either through existing municipal land or through the use of compulsory purchase to acquire sites for this purpose.” 

He is optimistic about CBD’s potential for regeneration, citing its infrastructure, accessibility and walkability as key assets. He also outlined a three-pronged strategy for revitalisation, including a clear vision for Ruwi’s future, a dedicated timeline, and committed funding from both public and private sources.

Echoing these views, Gladwin expressed confidence in Ruwi’s resurgence, highlighting its historical significance, strategic location and urban fabric as foundations for innovative regeneration efforts, while Balushi suggested a collaborative approach to urban renewal. He emphasised the importance of partnerships between government bodies, private sector entities and community representatives to re-envision and rejuvenate Ruwi.

(With inputs from Mohammed Taha and Gulam Ali)

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