Real Estate & Construction

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Real Estate

In both the residential and office segments, demand for luxury offerings is high, while the retail market is looking for the opposite as shopping centers seek to attract major international brands known for value.


One of the major boosts behind the Omani real estate sector has been ITCs. One of the reasons behind their success is the fact they allow non-GCC citizens to buy freehold properties in the country. Two of the largest ITCs are Muscat Hills and The Wave. Resale values in ITCs are beginning to increase as both domestic and foreign demand increases. The Wave and Muscat Hills offer some of the most expensive rental prices in Oman, with two-bedroom residential properties in The Wave going for OMR800 per month, three-bedroom properties for OMR1,100, and four-bedroom properties going for OMR1,800 in 1H2014. Over at Muscat Hill, rental prices were of a similar price at OMR750 for two bedrooms, OMR1,100-OMR1,350 for three bedrooms, and OMR1,900 for a four-bedroom property per month. Developments such as The Wave are a possible sign of where the market is heading. The mixed-use project will host residential, entertainment, office, and retail space, as well as the 400-berth Almouj Marina, which will be Oman’s largest private yachting hub. The Wave will also host a PGA standard golf course, numerous hotels, and six kilometers of stunning coast line. So far, over 1,000 residences have been completed and handed over creating a population of around 3,000 people. ITCs generally reflect a world-class level of lifestyle for their inhabitants and are becoming increasingly popular, while also driving demand in the residential sector.


Average office prices have remained steady over 2014 at around OMR4 to OMR8 per sqm. However, demand for prime office space is driving up the price while a decline in demand for secondary and tertiary office space means prices are falling; therefore, the overall average price of office space per sqm hides this changing dynamic. Grade A office space in Oman is currently limited, a further reason for increasing prices. Occupancy levels at present are hovering at between 75% and 90% in the handful of schemes in Al Assalah Towers, Beach One, and Al Rawaq. The strong demand for more Grade A office space has led to a number of new developers entering the market; particularly, in the Airport Heights area, which is quickly emerging as the Sultanate’s new commercial business district. Evidence of this movement west is backed up by the fact that both the National Bank of Oman and the Bank of Sohar are building their new headquarters in the district. However, while it still remains unclear how much new open office space will be made available in these new buildings, any that is will be rapidly adsorbed due to the high demand for Grade A office space. In 1Q2015, over 5,500 sqm of Grade A office space is expected to come onto the market in the Panorama Mall in Al Khuwair, while there will also be 5,954 sqm of prime office space coming online shortly in the Omnivest Building in Shatti Al Qurm.


Shopping centers are a popular past time for many Omanis and expatriates across the Sultanate, and there has been a notable rise in footfall traffic, rental prices, and occupancy rates in malls. Shopping centers are now aiming to attract more value brands, with Matalan and Red Tag being major anchors for malls. Another example of value brands moving in is at the Muscat Grand Mall, where R&B, a fashion chain, and Homes’ R Us, a mid-range furnishings outlet, have positioned themselves as the mall’s main anchors. A brand of malls to have expanded quite rapidly over the past year is Centrepoint, which is owned by Landmark Group. The brand now has malls in Al Khuwair, Ruwi, Muscat, Sohar, and Salalah.

Even though available mall space is on the rise along with occupancy rates, the high street is still experiencing high occupancy, especially in densely populated areas where demand outstrips supply. In Muscat, occupancy rates are at 100% on Ruwi High Street, Al Khuwair Commercial Street, Seeb High Street, and Al Khoud Street. The high street generally revolves around local and value brands rather than international counterparts. The typical rental price for a high street shop of up to 75 sqm is between OMR15 and OMR25 per 75 sqm and comes in at between OMR9 and OMR20, and while a store of over 200 sqm is between OMR6 and OMR11 per month.

All segments of the real estate sector can be linked through the fact that demand is outstripping supply, especially when it comes to luxury and prime offerings. New developments coming online in the future look to address some of the needs of the market, but there is still potential for more projects.

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