Rather like catching a high tide, it has been said that the key to success is being in the right place at the right time. But location and timing alone do not guarantee success, rather they create the conditions necessary for victory.
That is one of the key lessons I learnt from both my military and investment careers. In today’s volatile global trading landscape, it is a lesson that applies to the Gulf’s economic trajectory. This is because it is not just the region’s geographic location that makes it an emerging trading hub – it’s everything else the GCC has spent decades building that positions it to capture the opportunities that will inevitably arise from today’s global trade rearrangement. Naturally, that includes infrastructure.
The GCC has one of the world’s most robust networks of seaports. The Red Sea handles about 12 per cent of global trade, and around 30 per cent of global container traffic, while 30 per cent of the world’s seaborne traded oil and 20 per cent of all LNG is exported through the Strait of Hormuz. These ports are multipurpose hubs, handling containers and cargo from every corner of the world. Importantly, however, they are also gateways to a group of economies set to reach a GDP of $3 trillion by 2030.
One of the bridges to this opportunity is the Port of Duqm on Oman’s south-east coast, facing outwards towards Asia and Africa with direct access to the Indian Ocean. Duqm is a key focus in Oman’s National Logistics Strategy 2040, which aims to position the country as a global logistics hub and make the sector the second-largest contributor to gross domestic product. It is a strategy that has attracted significant regional and international investment to Oman’s logistics sector – about $6.5 billion since 2023.
One of the fundamentals underpinning these investments is renewable energy. In fact, there are huge opportunities for the region’s ports from industrial decarbonisation and the global energy transition. The Port of Duqm is currently being expanded to include a new quay wall servicing a low-carbon industrial plant that will supply the green steel sector. Up to 200,000 tonnes of green hydrogen are already generated annually at Duqm from 5 GW of wind and solar energy. Duqm aims to increase production to reach a million tonnes by 2030, becoming a regional centre for renewables.
The fact that Duqm sits at the intersection of the GCC’s economies of today and tomorrow makes it a natural destination for capital. It is a beneficiary of – and contributor to – Oman’s Vision 2040. It’s a long-term investment that will shape the economy and endure for generations. Ultimately, it transcends financial returns, creating sustainable effects for Omani people and businesses.
The investment opportunity accommodated at Duqm represents something we will likely see more of over the next five years, not just in Oman, but regionally. We will witness the roll-out of a new template for grand infrastructure plays across the GCC as the region locks in its growth trajectory. Fuelled by national transformations, the delivery of these megaprojects will cement the region as a trade hub and West Asia as a new fulcrum for global commerce.
The opportunities are clear and will follow a playbook that Investcorp is well-versed in following: decades of involvement in major infrastructure and real estate projects.
Today, Investcorp’s real assets portfolio has $16.7 billion of assets under management out of $57 billion of total AUM. A large component of these assets is based in mature industrial markets in the US and include some of the country’s highest-profile projects of our time, like the $4.2 billion Terminal 6 Project at John F Kennedy International Airport in New York. One of these infrastructure assets, Resa Power, was recently our most successful exit of the last decade, growing revenues by more than four times under Investcorp ownership.
Crucially, models honed in the US – a country with strong fundamentals throughout market cycles – are now becoming relevant to the GCC, where macroeconomic tailwinds and a global energy transition are making infrastructure investments more viable than ever. Now is the right time to apply these models to markets like Oman and the wider GCC, that stand on the cusp of a new economic era.
In the near future, GCC logistics hubs will become prime destinations for smart global capital. These are assets that sit at the perfect place in time. On one hand they straddle the region’s deep maritime past and its future of technological leadership; and on another, they are coming to the fore during a period of supply chain reconfiguration and a shifting balance of power between East and West. And of course, located between fast-growing markets on multiple continents, they sit at just the right place.
The tide is rising – now is the time to catch it.
