After multiple rocky years, the Omani economy, and especially the real estate sector, is gaining momentum throughout 2018.

1. What You Need to Know about
the Recovery of Oman’s Real
Estate Sector
Dr. Ehsan Bayat

2. What You Need to Know about the
Recovery of Oman’s Real Estate Sector
 The Oman economy has experienced a number of challenges over the course of
the past few years, but recovery has slowly begun. One of the markets most
impacted has been the real estate sector, which struggled with a significant lack
of demand. However, 2018 started off strong, and the market has begun to
stabilize over the course of the year. Oman’s National Centre for Statistics and
Information (NCSI) recorded significant growth in the first quarter of 2018
compared to the first quarter of 2017. These gains relate to rises in oil prices and
an increase in overall economic activity in the nation.

3. A Strengthening Omani Economy
Increase Investment Interest
 The quantitative analysis and global forecasting and firm Oxford Economics estimated that overall
GDP in Oman should increase by 5.2 percent over the course of 2018, which is the strongest rate
of growth since 2015. This economic expansion will further be fueled by the opening of a new
Muscat International Airport, as well as the start of natural gas production in Khazzan. Increases
in business will further drive demand for real estate, especially as consumer confidence returns to
the market. As the head of the largest real estate products and services company in Oman has
pointed out, people are spending again and ready to invest in, especially in real estate.
 Foreign investment in Oman is driving some of the development of the country’s real estate
sector. For example, Duqm is in the process of being transformed into an industrial port city. The
port is already operational, although the first phase of development will not be completed until
next year. However, the South Korean government has partnered with organizations in Oman to
assist in the development of Duqm. The plan is to establish the port as a “smart city,” which could
attract new residents from across the country or even from other parts of the Middle East. Oman-
based companies have also teamed with Chinese organizations to create the China-Oman
Industrial Park. So far, 10 agreements have been signed for the project with a total of $3.2 billion
invested in the area.

4. Omani Rents Begin to Stabilize as Tourism
Triggers a Retail Boom
 Furthermore, demand for rental units is increasing in key areas like Ghubra, Qurm, and Al
Khuwayr. In areas around Muscat, including Al Khoudh, Amerat, and Ma’abela, rental demand will
continue on a path of stabilization throughout 2018. Rents in other outlying areas have fallen, but
this is due to high supply rather than economic conditions. A lot of construction is taking place in
the areas outside of Muscat and these projects, started a few years ago, are now entering the
market. Real estate executives in the area project that rents will become stable in these areas,
rather than continue to fall, after adjusting to the additions.
 Al Raid Group, an Omani real estate developer, also cites increasing rates of tourism for inciting a
retail boom in the sultanate. Industry experts estimate an annual compound growth rate of 13
percent in tourism between 2018 and 2021. To meet the expectations of these tourists, developers
have begun construction on a futuristic mall that will open later this year. The mall is set to feature
one of the biggest food courts in the world and a massive glass atrium as part of its cutting-edge
design. Growth in the retail sector is also being encouraged by the younger Omani population,
which wants to have new lifestyle experiences. In addition to this mall, two others, the Mall of
Oman and the Mall of Muscat, are currently under construction.

5. The Oman Government’s Work to Drive
Growth in the Real Estate Industry
 Another factor driving recovery in Oman’s real estate market was the decision to create real
estate investment trust (REIT) funds by the Capital Market Authority. A REIT trades almost like a
stock and allows people who don’t have the capital to purchase an entire property to invest in
real estate. Establishing REITs in Oman creates a lot of opportunity for smaller investors to
become involved with the real estate market while also giving more flexibility to the larger
organizations that already exist. More investment in the Oman real estate industry will increase
construction and reinforce growing faith in the sultanate’s economy.
 In addition to creating REITs, Oman’s government has undertaken a number of other new
initiatives to drive economic growth, especially through real estate. Because of recent fluctuations
in oil prices, the government is committed to diversifying its economy and thus reducing reliance
on these prices. One of the projects involves the opening of expatriate investment in designated
Integrated Tourism Complexes (ITCs). These mixed-use developments feature retail, leisure, office,
and residential space that can be purchased by expatriates living in Oman, as well as by
foreigners living in other countries. Currently, the government is developing more than 5,000 new
homes in ITCs. Together with various private developers, the government has established five
ITCs: Diyar Ras al Hadd Resort, Al Nakheel Project, Omagine Project, Naseem al Sabaah Project,
and Quriyat Integrated Project.