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

Market Overview

• Oman’s real estate market has been recovering since early 2019. The continuing recovery of oil prices, the introduction of natural gas production at the Khazzan gas field, and the completion of the new Muscat International Airport are some of the major factors expected to encourage private sector investment in Oman, which may give a boost to the country's GDP growth. This growth is also anticipated to enhance the commercial real estate sector’s performance in the country.
• To boost investment in the Oman real estate sector, the Capital Market Authority (CMA) of Oman issued the regulatory framework for the introduction and trading of real estate investment trusts (REITs) in 2017. The regulation is providing a great opportunity to Omani residents, including ex-pats, by allowing them to purchase a part of a real estate development in the Muscat Securities Market. This is expected to further boost the real estate market activity in Oman. As a part of its move to reduce the country’s reliance on oil and diversify the economy, the Government of Oman has also opened the real estate sector to investments from expatriates in integrated tourism complexes (ITCs). ITC's are freehold mixed-use developments featuring different asset classes, including residential, hospitality, retail, leisure, and offices.
• The retail market of Oman is also in a transition phase, due to the changing consumer preferences. Despite weaker consumer sentiment and declining retail sales due to poor market conditions, a significant amount of retail space is being added to the existing stock in the country, mainly in the capital. The retail landscape of the country is gradually shifting toward larger format malls from stand-alone retail outlets, owing to the changing shopping preferences.

Scope of the Report

This report aims to provide a detailed analysis of the Omani commercial real estate market. It focuses on the market dynamics, technological trends, insights, and government initiatives taken in the commercial real estate sector. Additionally, it analyzes the key players present in the market and the competitive landscape in the Omani commercial real estate market.

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Key Market Trends

Increasing Construction Activity across the Hospitality Sector in the Sultanate

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.

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