The Wavebreaker

Can The Wave weather the storm? Are there choppy waters ahead or has the tide turned? The Wave, Muscat is a tabloid copywriter's dream and its name alone leaves it open to lazy clichés and obvious puns, something the executives behind the development shake their heads at as we sit down to lunch aboard a catamaran moored in the development's marina.

The plan had been to do a quick tour of the marina area, but it was a windy day and conditions weren't too favourable to be heading out to sea. A weather warning for The Wave? The executives cringe and laugh, they've heard them all.

Joking aside, the development is a massively important project for Oman and its fledgling tourism industry. The sector currently represents less than 3% of Oman's gross domestic product. With vastly lower oil and gas reserves than its wealthier neighbours, a lot is riding on The Wave (my sincere apologies).

Launched in September 2005, The Wave, Muscat was part of Oman's ambitious plan to enter the high-end tourism real estate market. Dubai had the Palm islands and Abu Dhabi had Yas and Saadiyat, now Oman wanted a piece of the lucrative international real estate boom.

The birth of the US $3.5 billion mixed-use development was made possible by a Royal Decree in 2006 by His Majesty Sultan Qaboos bin Said, which paved the way for non-Omanis to own real estate in special areas known as Integrated Tourism Complexes (ITC).

The first 2.2 million m² development along six kilometers of reclaimed beachfront was the first site awarded ITC status and therefore the first opportunity for non-Omanis to buy 100% freehold property. The first phase of major construction started in 2006 and consisted of harbour walls, land reclaim and site preparation together with utilities.

While residents began moving into their units in 2008, the development was hit by the tsunami that was the financial crisis and the bursting of the global property bubble. Executives have admitted that sales at The Wave went through a dry spell in 2008 and 2009 and, at present, 75% of the properties on market are still unsold.

While there there was speculation that the project would be reduced in size, its chief executive officer Michael Lenarduzzi is quick to emphasise that there will be no scaling back and the number of units in the project will remain at 4000.

"We certainly have no plans to change that number in any material way," Lenarduzzi says of the speculation. "The real estate will be sold and built. It was clearly the strategy from day one and always will be. We had never delayed on completion."

Tourism attraction

The main attraction when the project was launched was the fact that the development was the first ITC and the first opportunity for foreigners to buy into Oman, says Lenarduzzi - and the focus now is on delivering the hotel, leisure and retail aspects that were promised.

"We are now at the stage where we have to start delivering on the tourism infrastructure as the community continues to grow," Lenarduzzi says. "The golf course is in, the marina is in, the first phase of the retail is in, the second phase will come along and our strategy is to concentrate on activating the marina district.

"It will be concentrating on developing that core marina area and getting the hotel in and the marina up and going and the retail activities."

Four hotels are planned for the development, three five-star and a four-star boutique hotel. The first, the Kempinski The Wave, Muscat Hotel and Serviced Apartments, which will be the first Kempinski-branded hotel in Oman, is due to start construction by the end of April.

The second hotel, the Fairmont The Wave, Muscat will not start construction until 2012. When complete, it will include 250 rooms and suites and will be located adjacent to the 18-hole Greg Norman-designed championship golf course.

"The Fairmont will come along behind the Kempinski and we will look to start that next year; it won't start this year," Lenarduzzi says. He says he is currently in "initial discussions" with potential operators for the third hotel, a four-star boutique hotel.

The fourth hotel, a five-star marina hotel "is way off at this stage," he says. "Between the Kempinski, Fairmont and the boutique four-star hotel there is about 700 rooms there, which will keep us going for a while," he adds.

While the Fairmont might not start taking shape until next year, the golf course is well underway. Officially the first nine are due to open in September, with the remaining nine in early 2012, but Lenarduzzi says he'd "like to maybe even try to get the whole 18 open by the end of the year."

Work on the course started in August 2009 and is being designed to emulate the mountains that are the backdrop for the course. Lenarduzzi also admits that a number of negotiations are currently underway regarding the management and operation of the Greg Norman-designed course.

"The course has been designed to PGA standards," he says. "We have had some initial discussion about potentially holding a PGA event down here. Greg [Norman] has designed it as such so that if we wanted to hold a full PGA event, we could do so."

It has been rumoured that Dubai Golf, the UAE-based management company that operates the prestigious Emirates Golf Club and Dubai Creek Golf and Yacht Club and organises the European PGA Tour's Omega Dubai Desert Classic, is going to come onboard.

Lenarduzzi refuses to confirm or deny the reports. "But watch this space," he concedes with a smile.

With the golfing and hospitality taking shape, Lenarduzzi says the retail elements will also begin to open by April, helped no doubt by the UAE's Majid Al Futtaim Properties (MAF), who developed Mall of the Emirates and the City Center mall chain, who are one of the main partners involved in the project.

Future outlook

The Wave has avoided the stormy fate of some other mass market projects that have been launched in Oman. Take, for example, the stalled real estate development Blue City. Launched in the wake of a 2006 Royal Decree permitting foreign ownership, the $20 billion development lay at the heart of Oman's economic transformation plans.

The project, designed to include 200 villas, 5000 apartments, four hotels, two golf courses and a clubhouse, was expected to create 7000 jobs and generate tourism. The development suffered poor sales and is now the subject of a legal battle between the projects owners. Its future now remains uncertain.

With an eye on international markets, which themselves are still reeling from the global recession, will The Wave be able to stick to its ambitious plans and sell its remaining 3000 units and stick to its ever-nearing 2018 completion date? [Insert your own sea or weather related pun as you see appropriate.

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