Commercial Real Estate Market in Oman - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Oman is witnessing a steady increase in the hospitality sector. There is an increase in the construction activity across the hospitality sector, with nearly 72 new hotels under construction in 2019. By the end of 2019, 55 of these developments are expected to be completed, which may add 4,763 rooms to the total hotel supply in the country.

Some of the major factors boosting the market growth for hotels in Oman include corporate demand, leisure, meetings, conferences, and the Oman Convention and Exhibition Centre (OCEC), which was inaugurated in 2016 to attract a wide range of business travelers from across the world. The total number of hotels in Oman was 412 units in 2018. There was an increase in the number of hotels from the previous number of 367 units in 2017. Some of the major hotel projects scheduled to begin operations in 2019 include W Muscat, JW Marriott Muscat Convention Centre, and Centro Hotels by Rotana.

Increase in hotel construction activities across the country is likely to continue during the forecast period, with more hotel projects coming up in the country, which is further going to boost the demand in the hospitality sector.

The industrial sector is gaining strength in Oman and the outlook for the industrial sector looks stable and positive in the middle to long term. The country has four free-trade zones: Al-Mazyunah, Sohar, Salalah, and Duqm, each at different stages of development and all designed for international companies. With the increasing government support for new foreign direct investment (FDI) initiatives and sustained investment in infrastructure, industrial contributions to GDP are expected to benefit from projects developed in the country’s free-trade zones. The average value added by the industrial sector to Oman's GDP was around 47% in 2018. The manufacturing sector of Oman has also maintained a stable growth rate, due to the continuous investment for expanding the base of the manufacturing sector in the country. The contribution to the GDP from the manufacturing sector in Oman increased to OMR 2,914.40 million in 2018 from OMR 2,709.31 million in 2017.

Oman also has nine ‘industrial estates’ offering low rental and energy prices, customs duties advantages, and five-year corporate tax exemptions. One of the industrial estates in Oman, Knowledge Oasis Muscat, allows 100% foreign ownership for technology companies. The new Khazaen Economic City on the southern expressway represents the future vision of industrial and logistics in Oman, connecting hubs with northern ports and airports with equivalent zones in Duqm and Salalah in the south. This growth in the industrial sector is anticipated to boost the demand for commercial real estate in the country with more growth options for industries.