Due to Oman’s renewed focus on the development of its real estate industry, it is expected to experience significant growth throughout 2021.

1. Omani Real Estate Industry
Poised for Significant
Growth in 2021
DR. EHSAN BAYAT

2. Omani Real Estate Industry Poised for
Significant Growth in 2021
 The Middle East and North Africa (MENA) region was hit hard by the pandemic,
with many industries experiencing significant setbacks, including the real estate
sector. As 2021 starts, real estate markets in many MENA countries are already
showing signs of recovery. One market that is expected to experience significant
growth this year is Oman. Experts have projected growth of as much as 40
percent this year given new measures taken by the government that will make it
easier for Omanis and foreign nationals to own property. For example,
expatriates are now able to own property in mixed-use buildings, and real estate
transaction fees have been reduced from 5 to 3 percent.

3. Attracting Real Estate Investors
 The 5 percent transaction fee for real estate in Oman began in 2016. Unfortunately, the increase
sometimes meant that sellers had to pay more in ministry fees than they made in profit for a sale. As a
result, overall real estate sales in the country fell, which meant that the Ministry of Housing and Urban
Planning lost more revenue. The recent drop in fees brings them back to the levels that they were prior
to 2016, and experts believe that sales will increase, particularly in the speculation market. The high fees
cut into profits from real estate investment, which discouraged some people from participating in the
market. Some industry experts believe that the Omani government can increase its efforts to boost real
estate investment.
 One of the issues that has been raised in recent months pertains to expatriate residency laws. Some
other nations in the MENA region have begun allowing residency to people who invest in a certain
amount of real estate, and a similar strategy in Oman could help to drive even more foreign interest,
which has already been piqued with the right to lease in mixed-use properties. Currently, expatriates
need to hold property for four years before they can sell. Another hurdle is the fact that many
properties do not have parking, although the rules are changing to allow investors to add additional
floors to parking in buildings. Attracting more investors willing to do this would also create more job
opportunities for Omani developers.

4. New Opportunities for Real Estate
Investment in Oman
 Recently, the Omani real estate market witnessed the launch of the Oman REIT Fund, one of the
nation’s largest real estate investment funds, which is worth OMR65.48 million. The fund’s initial public
offering was for OMR39.28 million and represented 60 percent of the entire fund. The offering was
available until the end of January with the Shumookh Fund Management as the sponsor and
investment manager and United Securities as the issue manager. The advantage of the Oman REIT
Fund is that it provides immediate access to a diversified real estate portfolio with assets located across
Oman and without high investment costs. A team of managers is overseeing the fund with the goal of
paying an annual dividend of 7.5 percent in the first year with steady growth up to 8.2 percent by the
fifth year.
 The Oman REIT Fund aims to provide a stable income with high liquidity, which has historically been
one of the primary barriers to investing in real estate. Currently, the fund is listed on the Muscat
Securities Market for secondary trading, as the Capital Market Authority has already approved the fund
for public trading. The fund has distributed its assets across a number of different sectors, with about
half of the money allocated in commercial properties, and the rest in office and retail assets,
representing 29 percent and 13 percent, respectively. The remainder of the fund is invested in logistics
and industrial properties. Given the potential for growth in the Omani real estate market, the Oman
REIT Fund could prove to be a valuable tool for building wealth and driving further development in the
sultanate.

5. Why Now Is An Ideal Time to Invest in
Omani Property
 The expectation that the Omani real estate sector will grow in the coming year makes it an
exciting time to invest. Due to COVID-19, real estate prices in the country remain fairly low with
the expectation that they will dramatically increase in the near future. People also now have
more options for investment than ever before with the launch of the Oman REIT Fund. Investors
who may not have the money to purchase property or to create a diverse portfolio can enter
the market in a different way that provides much more liquidity and built-in diversification. The
other important point to consider is Oman’s Vision 2040, which emphasizes infrastructure
development and will likely drive growth in the tourism and hospitality industries, as well as
healthcare. This growth is expected to lead to the further development of Omani real estate
even beyond the expected increase this year.
 Recent moves have been taken to drive tourism development in the country. The Oman
Investment Authority transferred a tourism development project, existing resorts, and a
shareholding company to the Omran Tourism Development Co., also known as the Omran
Group. The move allows Omran Group to play a more focused role in economic diversification.
Restructuring tourism and real estate investments will help these industries to become a more
focused part of the sultanate’s economy in the coming years.