The Business Year

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Despite dips in demand, real estate developers are finding the sweet spots for growth in the real estate sector.

M. Sudhakar Reddy

CEO, Alhabib

The traditional property development model does not work anymore because of declining demand. At the same time, supply is going up because all the projects coming online now were started a few years ago, when oil prices were much higher and the economy was doing well. Supply is increasing and demand is falling, and there is therefore a great amount of pressure on the sector. However, there are pockets of opportunity. For example, integrated tourism complx (ITC) projects are doing well, as are hotels. We expect around 6,000 rooms to be added in the next three to four years. At the moment, most of the action in Oman is in Muscat. Salalah is growing as well because tourism has led to an increase in the number of hotels, while the international airport at Salalah has come online. We can expect good growth in Duqm and Sohar, which are becoming large industrial and logistics hubs.

Rashid Saleem Al Masalti

CEO, National Mass Housing

The company established the middle-income segment as its main target, and we are building villas. We have to keep the economic situation in mind because there is hesitation among people and banks have become selective in offering loans. There is a good chance, once the villa is ready and people see it, that it will make a big difference. We are not in a hurry, and we can wait until the local villas are ready. Then I think things will start to change. We are receiving inquiries everyday, but it is hard to close a deal without clients seeing the villa first. Everything is open to all GCC citizens. There is no struggle and a lot does not need to be done from the client side. I would love to see every Omani owning a house. I would like to see communities and small cities with integrated homes and services for everyone. We are working hard to achieve this.

Benjamin Cullum

General Manager, Benjamin Cullum

The young and expanding demographics of the country are such that there is enormous latent demand within most sectors of the real estate market. It is most obvious within the residential sector. As young Omanis grow up and look to enter the workforce, the more the workforce needs to expand to absorb them. There is a natural expansion of the economy that will happen. With those demographics, there is this underlying driver within the economy, where demand will continue to increase as the population ages. From a real estate perspective, the trick therefore is finding the right properties—the right supply—to match that demand. Over the long term, there is certainly scope to develop higher-end ITC products; however, this will only be achieved over a significant period of time. And crucially, not all developments will succeed if they follow the same path that the current ITC schemes have trodden.

Mish’al Mohamed Abdullah

Managing Director, Zain Property Development

Based on the income of Omanis, luxury housing is not moving quickly. Most young employees and newlyweds are looking to start a new life in a new home, and they are the most targeted sector. We have concentrated on affordable housing since 2008. Now, we are doing very well in affordability, and we are releasing a new project in a central area in Boshar. Compared to other housing options in that location, we are still considered affordable in a luxury area. Affordability is often misunderstood. Sometimes they think that affordability means poor quality and bad location. But, for example, in this project, we have a central location in a luxurious area; however, we maintain affordability by controlling size. We keep it simple with normal-sized rooms to reduce the cost, and the selling point is to keep it affordable by being smart in the design of the villa itself. This is how we ensure we can provide an affordable villa.



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