Gulf Warehousing Company Discloses the Project of Developing Al Wukair Logistics Area of Manateq Company

Gulf Warehousing Company Discloses the Project of Developing Al Wukair Logistics Area of Manateq Company

9 December 2019

Gulf Warehousing Company (GWC) announced that it has developed Al Wukair Logistics Area of Manateq Company in accordance with the requirements of "Design-Construction-Finance-Operation-Transfer” tender that was submitted by Manateq Company, and which includes a 30-year concession period.

Gulf Warehousing Company has submitted its tender following its evaluation of the scope of the current gap for the logistics related to the category of entrepreneurs of merchants and workers in small and medium enterprises.

According to the prices specified and approved in the market at the present time for the operations costs, around QAR 1.5 billion of capital costs are expected to be expended during a period of five years. This amount is efficient and effective in relation to the expected demand for rent in the market for this specific category, with taking into consideration the stagnant logistics market in general.

The facility to be constructed will be developed according to the following percentages: 15% ownership equity and 85% receivables. Regarding the development of the project, it will be carried out in two phases, and 75% of it will be completed before the need to invest in the ownership equity.

This may lead to have the project be auto-financed in the final phase of development through retained profits that will accumulate from the project itself.

The project will be developed by GWC for Manateq Company (The Economic Zones Company). The certified consultant will be from the first category or above, and the contractor for engineering, procurement and construction will be appointed according to the specifications set out in the tender and via open bidding.

This project will increase the company's assets and capabilities in the balance sheet at a cumulative rate of QAR 1.5 million over a period of 15 years. It will also enhance the Group's capability to provide spaces and logistics that will increase the cash flow over the coming years.

The opportunity and expected returns from the project will equal the expected growth of the GDP of the State of Qatar during the next ten years, for the risk rate in the project is low, and the expected revenues depend on the levels of current demand in the market. In addition to that, the project depends on new growth in the market by 15% of revenues and the internal risks of the project are the usual ones related to projects with high investment costs that operate immediately; they are the risks of deferring construction and approvals, while the risks of market demand are low, and the necessary procedures and interventions have been devised into the construction chart.

In addition to what was mentioned above, Gulf Warehousing Company guarantees that there is no conflict of interest related to the above project and there will be no change in ownership percentages.