In his office, a temporary corrugated iron structure in the middle of a Muscat car park, Michael Lenarduzzi, the CEO of The Wave, Muscat — one of Oman’s most prominent real estate projects — points to an aerial photograph that sits above his desk.
It is by this photograph, taken just five months ago, that the Australian expat spends most of our interview standing next to, keen to demonstrate the progress that is being made on the $3.5bn development.
“We never had plans to scale it back. We are very fortunate that our shareholders — who are 50 percent the government of Oman and 50 percent [Majid] Al Futtaim — aren’t shareholders that are here for the short term,” he tells Arabian Business.
“When you come to downturns, the worst thing you can do is start cutting back and pulling the shutters down,” he adds.
Sales at The Wave, launched in 2006 at the height of the Gulf’s five-year property boom, started off strong but waned after the global financial crisis battered neighbouring real estate markets in Dubai and around the Gulf. A gradual recovery in investor confidence was then further hit by the eruption of anti-government protests in Oman as citizens called for freedom for free elections and more housing and jobs.
The project, which features 4,000 homes, four luxury hotels, a marina and an 18-hole Greg Norman-designed golf course, was the first development in Oman to allow 100 percent foreign ownership of freehold property, boosting its appeal amongst expats.
In spite of the slowdown in sales, work on the multibillion dollar project, which is slated for completion in 2018, has continued. The developer handed over its 800th property last month and plans to roll out a further 300 over the next year. It is also starting to see the fruits of its labour with a gradual increase in sales.
“There is a pick-up in terms of sales. The events of the Arab Spring early last year certainly did have an impact on us — when people are uncertain about the future they stop to see what happens — so the first half of 2011 we started off very strongly [but when] those events happened, sales did stop. But post-Ramadan it just came back and it started to build so virtually all of our sales last year were in the second half of the year,” says Lenarduzzi.
Last year’s Arab Spring helped boost regional investment in the project by seventeen percent in 2011. GCC nationals and other MENA countries accounted for 33 percent of total sales in 2011, the majority of which were buyers from Kuwait. “This year we have been attracting a lot of regional investment as well as a result of the Arab Spring. Oman is seen as a safe haven,” says Lenarduzzi.
Lenarduzzi expects to boost sales from 300 properties annually to 500 as the developer pushes ahead with completion. To date it has sold just 500 villas and 1,000 apartments but anticipates an increase in demand when it launches 60-waterfront apartments after the summer. Lenarduzzi says he expects the properties, which start at OMR180,000 ($468,000) to sell out almost immediately.
“They’ll be prime waterfront apartments and we are getting a lot of interest in them. We are anticipating strong take-up — I would say we will sell out straight away. There is a limited supply and they haven’t been in the market for quite some time,” he explains.
Lenarduzzi is just as optimistic about Oman’s real estate sector, which has seen prices decline 25 percent since the onset of the global downturn.
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