Oman Commercial Real Estate Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

Oman Commercial Real Estate Market Trends and Insights

Oman Vision-2040 Infrastructure Pipeline

Mega-projects such as Madinat Al Irfan (624 ha, target 280,000 residents and 90,000 jobs) and Yiti (11 million m² of integrated tourism space) demonstrate how the Vision 2040 pipeline is reshaping asset demand in every commercial segment. The USD 15 billion National Railway will connect Sohar to Muscat and the UAE border, catalyzing corridor-based warehouse clusters. Duqm SEZ, covering 2,000 km² with USD 14 billion commitments, is birthing entirely new sub-markets for hotels, offices, and industrial parks. These projects generate ripple effects, retail, healthcare, and education facilities follow workforce migration, and reinforce the Oman commercial real estate market as an essential diversification lever^{[1]Suhail Al Maawali, “National Railway Project Factsheet,” Ministry of Transport, motc.gov.om}.

Steady Inflow of GCC & Asian FDI into Real Assets

Capital from Gulf and Asian investors is cascading into large-scale industrial, tourism, and logistics schemes, amplifying liquidity across the Oman commercial real estate market. Investcorp’s USD 500 million commitment to Duqm port and industrial infrastructure exemplifies this momentum. Sohar Port and Freezone has attracted USD 30 billion in cumulative investment with 85% land occupancy, including a USD 1.35 billion polysilicon plant, stimulating demand for adjacent warehouses and worker accommodation. Oman’s sustainable finance framework, the first in the GCC, offers labeled green bonds across 14 categories, pulling ESG-focused Asian capital toward LEED and BREEAM-certified assets. This financial diversification underpins stronger take-up of premium offices, hospitality, and logistics space that meets global investor benchmarks^{[2]Haitham Al Said, “OIA Launches USD 5.2 Billion Future Fund,” Oman Investment Authority Press Release, oia.gov.om}.

Rising Working-Age Population and Urbanization

Oman’s expanding labor force is accelerating internal migration toward mixed-use corridors in Muscat, Sohar, and Salalah. The OMR 1 billion Sultan Haitham City scheme will accommodate 39,000 residents across 7,000 units by 2030, underpinning demand for office, retail, and community facilities. Parallel initiatives such as New City Salalah’s waterfront project for 60,000 residents and 200,000 m² of retail-hospitality space create secondary demand for logistics and service assets. Al Khuwair Downtown in Muscat, backed by USD 1.3 billion, targets population expansion from 1.5 million to 2.7 million by 2040, spurring Grade-A office absorption. Ministerial Decree 501/2024 is accelerating Omanization, driving corporate spending on training centers and compliant workspace. Collectively, these demographic shifts provide foundational support for the Oman commercial real estate market through 2030.

Corporate ESG Mandates Spurring Green-Certified Offices

Multinational tenants increasingly require LEED Silver or higher ratings, prompting developers to retrofit or build to global environmental standards. Omran Group’s Office Park in Madinat Al Irfan achieved LEED Gold pre-certification in 2024, inducing similar moves by private peers. International lenders offer interest rate discounts of up to 50 basis points for certified green stock under Oman’s sustainable finance program, lowering the weighted average cost of capital for compliant developers. Early adopters report rental premiums of 7%–10% for green buildings, improving asset value retention despite rising construction costs. Demand is expanding from Muscat CBD to emerging hubs like Sohar and Duqm, embedding sustainability as a competitive requirement across the Oman commercial real estate market^{[3]Aisha Al Rawahi et al., “Green Building Adoption in GCC Commercial Real Estate,” Journal of Sustainable Construction, jsusc.org}.

Escalating Construction Material and Labor Costs

Global steel and cement price volatility is squeezing developer margins just as Omanization drives wage inflation. The Bandar Al Khairan resort’s OMR 36 million (USD 93 million) budget underscores cost pressures filtering into hospitality assets. Ministry of Labor restrictions on expatriate technical roles compel additional training and recruitment outlays, further elevating input costs. The AECOM Property & Construction Handbook 2025 cites Oman among GCC countries facing above-regional average escalation for rebar and ready-mix concrete. Project delays and scope revisions have become common, particularly for SMEs lacking balance-sheet resilience. Although green finance incentives provide marginal relief, short-term cost inflation remains a meaningful drag on the Oman commercial real estate market.

Growing Threat of Oversupply in Grade-B Offices/Retail

New stock continues to flow at a faster rate than tenant absorption, especially in secondary corridors where demand drivers are weaker. The Capital Market Incentives Program has sparked a surge of listings on the Muscat Stock Exchange, yet many newly listed entities maintain lean headcounts, limiting net office take-up. Retail vacancy risks have risen following the opening of City Centre Sohar (35,301 m², 120 stores), adding supply in a market already contending with e-commerce substitution. Oman Chamber of Commerce data reveal that one large retail franchise recorded a fivefold jump in operating losses during 2024 as footfall shifted online. Grade-B landlords face rising incentives and shorter lease terms, challenging income stability within the Oman commercial real estate market.

Segment Analysis

By Property Type: Logistics Leads Expansion

Logistics assets contributed the fastest incremental growth to the Oman commercial real estate market size, outpacing all other categories with a 7.80% CAGR outlook to 2030. Sohar Port’s 85% land occupancy, USD 30 billion cumulative investments, and new agro-bulk terminal illustrate robust warehouse absorption along the Batinah coastline. The Oman commercial real estate market share for offices remained highest at 33.73% in 2024, buoyed by government relocation programs to Madinat Al Irfan and the launch of corporate campuses in Duqm. Retail assets face a structural shift as mobile commerce scales; nonetheless, flagship centers like City Centre Muscat sustained annual footfall above 10.2 million, retaining prime-location appeal.

Tenant demand patterns are evolving toward sustainable specifications. Port-centric developers are integrating solar-ready roofs and LED lighting to meet shipping clients’ carbon mandates. Industrial assets in Duqm SEZ benefit from USD 14 billion in manufacturing commitments focused on energy-intensive sectors such as green hydrogen and petrochemicals. Hospitality pipelines remain active, evidenced by the USD 731.6 million Duqm tourism complex and the USD 100 million Club Med Musandam resort targeting BREEAM certification. Emerging sub-sectors include data centers, Oman Data Park’s USD 450 million initiative showcases rising demand for resilient power and fiber connectivity. Together, these forces are reshuffling capital toward future-proofed asset classes within the Oman commercial real estate market.

Note: Segment shares of all individual segments available upon report purchase

By Business Model: Rentals Retain Primacy, Sales Accelerate

Rentals controlled 70.54% of the Oman commercial real estate market share in 2024, reflecting corporate preference for operational flexibility in a diversifying economy. Lease volume surged following a 28.1% year-on-year rise in transaction values as of November 2024, propelled by new company formations under Vision 2040. Simultaneously, sales transactions are charting a 6.67% CAGR through 2030, energized by freehold permissions in SEZs and 10-year tax holidays introduced by Royal Decree 38/2025. The Oman commercial real estate market size tied to expatriate buyers continues to expand, with Indians, British, and Emiratis collectively accounting for more than 57% of Integrated Tourism Complex purchases.

Luxury leasing in enclaves such as Shatti Al Qurum and Muscat Hills maintains yields above 7%, supported by zero property tax and the new mortgage-friendly Banking Law that enhances consumer protection. Capital Market Incentives streamline conversion to joint-stock status, unlocking preferential financing for corporates seeking to own operational premises. Robust banking sector profits, totaling OMR 522.6 million in 2024, signal sustained credit support for owner-occupied developments. These factors collectively underpin a dual-track trajectory where rentals dominate cash flow stability while sales unlock capital appreciation in the Oman commercial real estate market.

By End-User: Corporate Mainstay, Household Upswing

Corporate and SME tenants generated 88.65% of the Oman commercial real estate market size in 2024, underwritten by the USD 5.2 billion Future Fund and escalating private-sector job creation mandates. Blue-chip occupiers gravitate toward Grade-A stock; Omran Group reported a 94% Omanization rate and OMR 25.2 million net profit in 2024, signaling robust demand for premium premises. The Oman commercial real estate market is witnessing a fresh wave of corporate expansion into green buildings, targeting utility cost savings and ESG compliance.

Household participation, although smaller, is expanding at a 7.40% CAGR through 2030, catalyzed by expatriate population growth surpassing 43% of residents. Integrated Tourism Complexes allow foreign freehold ownership, drawing upscale buyers to mixed-use schemes blending residential, retail, and workspace. SME demand benefits from dedicated incubation zones within Sultan Haitham City and other Vision 2040 projects, offering subsidized rents and access to business support services. Household investors increasingly favor properties with energy-efficient designs and community amenities, aligning with the broader sustainability trajectory of the Oman commercial real estate market.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Muscat commanded 69.79% of the Oman commercial real estate market share in 2024, anchored by governmental functions and mega-projects such as the USD 1.3 billion Al Khuwair Downtown regeneration, which targets a city-center population of 2.7 million by 2040. Madinat Al Irfan’s 624-hectare master plan foresees 90,000 jobs and 280,000 residents by 2044, driving sustained take-up of offices, retail, and hotels. Premium coastal developments, including Al Mouj and AIDA, capture high-net-worth demand while pushing land prices upward in Shatti Al Qurum and Muscat Hills. Nevertheless, Grade-B office oversupply and escalating costs are spurring capital migration toward secondary cities.

Sohar stands out as the fastest-growing node, leveraging USD 30 billion of port-based investments and 85% land occupancy to attract logistics-led projects. Upcoming assets such as the USD 1.6 billion LNG bunkering facility and a new railway link to Muscat and the UAE border reinforce connectivity advantages. Retail expansion continues, highlighted by City Centre Sohar’s 35,301 m² opening, though vacancy risks demand cautious tenant curation. Sohar’s geostrategic location outside the Strait of Hormuz appeals to global investors seeking supply-chain resilience, supporting further growth within the Oman commercial real estate market.

Salalah and the broader “Rest of Oman” corridor are growing at a 7.20% CAGR through 2030, propelled by tourism and industrial diversification initiatives. New City Salalah promises 60,000 residents and 200,000 m² of hospitality-retail space, broadening the demand base for mixed-use assets. Duqm SEZ’s 2,000 km² footprint with USD 14 billion commitments fosters green-field hotel, office, and industrial clusters. A USD 731.6 million Duqm tourism complex exemplifies rising hospitality capital deployment. Strategic fuel reserves in Dhofar and generous free-zone tax incentives enhance developer attractiveness by offsetting Muscat’s premium cost structure. Together, these regional centers diversify the geographic footprint of the Oman commercial real estate market.