Arabian Property reports on how the sultanate's property market could soon rival that of the UAE.
Arabian Property reports on how the sultanate's property market could soon rival that of the UAE.
Middle Eastern seaside sultanate Oman is stepping into the international spotlight, as its tourism and property markets record rapid growth.
The nation topped off a strong economic year by being named the ‘2008 Destination of the Year', by influential New-York based magazine Vogue.
Oman is relatively undiscovered, with a wonderful climate during winter, glorious mountains, spectacular deserts, medieval cities and a thousand-odd mile of seaside.
The January accolade boosted further Oman's burgeoning tourism industry by describing the country as a ‘shining new alternative to Dubai attracting eco-tourists with its wadis, diverse markets, and rich culture.'
Vogue, one of the world's most influential magazines in its ‘Vogue.com Oracle 2008' web edition, strongly recommends the sultanate as a place to visit, describing it as a ‘modern travel destination'.
"Unlike its better-known neighbour, it is relatively undiscovered, with a wonderful climate during our winter, glorious mountains, spectacular deserts, medieval cities and a thousand-odd miles of seaside," the article says.
It said His Majesty Sultan Qaboos bin Said had turned the country into a modern travel destination, combining the traditional values of an ancient and rich civilisation with the attractions of up-to-date luxury.
"The latest of these is the Six Senses Evason Hideaway at Zighy Bay, on the remote northern coast of the peninsula, set to open in January 2008."
"The ultimate in chic escapism, the hotel will have 82 pool villas nestled in a dramatic setting, with mountains on one side and a sandy beach on the other."
The Vogue endorsement of the sultanate follows soon after London's Sunday Telegraph picked the Gulf state as one of the ‘Top Dozen Desirable Destinations'.
In an article, the newspaper had described Muscat as a ‘gracious and accessible face of Islam', and predicted that the county would be one of the top global destinations of 2008.
The Sunday Telegraph article claimed that the country that had done most to ‘give tourism a good name in the Middle East is undoubtedly Oman'.
The developing country is witnessing the launch of new hotels and projects into its markets, including the Sofitel Muscat and Spa.
Scheduled for opening in January 2011, the Sofitel brand will be venturing into the sultanate for the first time.
The 230-room facility will be located in the Muscat governorate, and owned by Al Mashriq Hotels and Tourism and managed by Accor Hospitality Middle East.
Christophe Landais, managing director, Accor Hospitality Middle East, said Oman represented a brand market for the group.
"Oman is undeniably the region's emerging leisure capital, and I believe our hotel will meet the growth in demand for the deluxe five-star hotel sector in the sultanate and the region."
Oman is a country of outstanding natural and cultural beauty and Omani culture continues to be well preserved within the sultanate.
Hotels are not the only new entrants to the Oman market. Gulf-based developers are moving to capture a significant share of the Omani real estate market, which is experiencing massive year on year growth, surging by at least 100%.
Local and foreign investment is flowing into the real estate sector, primarily in Muscat and Salalah, with a focus on developing the tourism infrastructure by constructing hotels, tourist cities and resorts.
Investment in the residential sector has been active, too, with the launch of several mega projects announced by investors, most of whom are GCC-based developers.
The total transaction volume on the Omani property market in 2006 was US$5bn, with 109% increase comparing to 2005.
In December last year, the Oman ministry of national economy released its latest report on the state of Oman's economy, reporting positive signals for construction material prices.
Along with the positive news of strong GDP growth, which came in at 8.3% for the year ending June 30, and year-on-year inflation of 4.8%, the ministry reported a slowing of the rate of increase for the price of construction materials.
The ministry's report for the first quarter of 2007 showed the increase in prices for building materials rising at an overall rate of 13.4%, with costs for vital components, such as iron and steel climbing by 19.4% while the price of wood rose by 31.5%.
Meanwhile, the report said while global property markets experienced a tremor mid-year 2007 due to the US sub-prime crisis, this has not extended to the Gulf, which is insulated by strong revenue flow from fossil fuel sales.
"Continued high oil prices, combined with a fall in construction costs, could see Oman's property boom maintain its explosive force for the foreseeable future," the report said.
While Oman's property boom may not compare with the construction explosion currently taking place in neighbouring Dubai, in a country with a population of 3,204,897 including 577,293 non-nationals it is significant.
Property developers clearly perceive Oman as a growth area as evidenced by such projects as the multi-billion Blue City development which offers 34 sq km of real estate designed to create homes for 250,000 people.
Al Sawadi Investment and Tourism (ASIT) announced its plans for the sales of the Blue City freehold property in September supported by legislation recognising inheritance laws from the purchasers' country of origin.
This is all part of the country's drive to attract foreign investment and tourism.
Construction on the Blue City project, also known as Al Madina A'Zarqa, has already started and the project is the largest development in Oman.
Its importance to the country's development is hugely significant, according to ASIT chairman Anees Issa Al Zadjali.
"Oman is a country of outstanding natural and cultural beauty and Omani culture continues to be well preserved within the sultanate."
"Al Madina A'Zarqa is not just another resort or development, but will be a self-sustaining city designed to be sensitive to the culture and traditions of Oman and the needs of its people."
"We are creating a city which will take Oman into the next century."
"The project will serve as a growth engine for the sultanate, supporting Oman's drive to diversify its economy and attract non-traditional business, commerce and tourism to the Gulf state," he said.
"The dynamics of the project and its importance to Oman cannot be underestimated."
"Extensive research has been undertaken to find organisations and entities that share the vision of creating a harmonious community on one of the most beautiful natural coastlines in the region."
"Our master planning and architectural designs have been focused on delivering a modern essence of Arabia which builds on our strong Omani heritage and history, but does not compromise on modernity and quality."
"Together these factors will distinguish the project and provide a unique set of highly appealing characteristics which we believe will be very attractive to buyers from across the world, as well as from Oman and the Middle East itself."
Al Zadjali goes on to say that he believes the development will be a fully integrated live-in community with a wider role to play in the promotion of Oman as a tourism destination.
"We are creating a city which will take Oman into the next century, providing not just homes, but new jobs, new industries and a legacy for the future," he adds.
Another US$805m project - the Wave - combining upscale living with a luxury tourist resort, is further proof of the Omani government's commitment to development in the sector.
The sultanate itself contributed the land and part of the equity for the project which it hopes will become a major attraction.
A five-star 200-room spa and hotel, an 18-hole golf course designed by Greg Norman, 505 premium villas, 850 apartments plus restaurants and shops are just part of ambitious plans for this development.
The Oman Real Estate Portfolio, joint ventures of key GCC developer Al Mazaya and partners, also announced the launch Al Badia Residential Project last year.
Positioned on an area of 19.4 thousand sq m, at a total cost of US$12m, Al Badia Residential Project comprises 73 villas, a private sporting club, and a multi-purpose hall.
The developers have been inspired by the concept of simple, elegant architecture, with the ancient design of the project to play its role in preserving the Omani architectural heritage.
Al Mazaya's initial development in the sultanate is the result of its strategic partnership to develop a series of projects in Oman with a special focus on Sohar.
The project will be developed and marketed by Al Mazaya Holding, a leading regional property developer, which holds a 40% stake of the portfolio.
The development is situated in Sohar, on Al Batinah Coast of the Gulf of Oman, an area recognised for preserving Omani traditional heritage while occupying a strategic geographical location.
The province is home to several major heavy industry projects, and to the Port of Sohar, which is increasingly becoming one of the most important hubs for logistic trade in the Middle East.
Real estate investors and market observers have attributed the accelerated growth in the Omani property market to the series of new laws and regulations issued by the government.
These laws have given the nationals of any GCC country the same rights, facilities and incentives as the Omani national.
All nationalities are allowed freehold ownership of property, according to the new regulations.
Government corporations are now attempting to attract direct foreign investment to the sultanate by setting attractive incentives for investment and joining forces with foreign investors, as seen in the latest projects.
Since 1970 it has been ruled by the progressive Sultan Qaboos bin Said al-Said who has opened it up to the outside world encouraging investment in the oil, property, industrial, IT and tourism sectors and repositioning itself as a hub for cargo and transshipment.
Oman became a member of the World Trade Organisation seven years ago and continues to open up its markets with a free trade agreement with the US ratified in 2006 and new relationships currently being forged with the EU, China and Japan through the Gulf Cooperation Council.