By Joanne Bladd
Government-back project has 3,000 units to sell, hit by Gulf-wide real estate crash
The Wave, a luxury housing project in Oman’s capital, will not scale back its size or postpone its completion date despite slow sales on the state-backed development, its CEO has said.
The $3.5bn project, designed to include 4,000 real estate units, hotels and a marina, saw sales slow in the wake of the financial crisis that sparked a Gulf-wide real estate crash.
Michael Lenarduzzi, CEO of the project, said the properties have been remodelled from solely high-end luxury to a broader range of property sizes and prices.
The Wave has 3,000 properties left to sell.
“We certainly have no plans to change that number in any material way,” Lenarduzzi told Arabian Business in Muscat. “The real estate will be sell and build. It was clearly the strategy from day one and always will be…. We had never delayed on completion.”
The Wave sold around 300 units in 2010, worth around $90m. The development expects to sell 500 units per year from 2011, putting it on target to meet its 2018 completion date.
The project is the first in Oman to offer 100 percent foreign ownership of freehold project. Approved buyers also receive a two-year residency permit, a perk that may drive foreign sales Lenadruzzi said, adding that Oman has largely escaped the oversupply issues seen in the UAE.
“Oman only opened up to foreigners in 2006 and such a strong local market is underpinning evidence of the strong supply and demand equilibrium that exists here.
“The expansion into international is an expansion of our existing sales and we are not going internationally because [we have to]. We are very fortunate that already 95% of our sales are coming from Oman anyway.”
The sales team intends to target buyers in the UK, Germany and India in 2011, he added.
Partners in the project include the state-controlled Waterfront Investments, the National Investment Funds Company and UAE’s Majid Al Futtaim Properties (MAF).
Oman has not been immune to the impact of the real estate downturn, as evidenced by the stalled real estate development Blue City.
Launched in the wake of a 2006 Royal decree permitting foreign ownership, the $20bn development lay at the heart of Oman’s economic transformation plans.
The project, designed to include 200 villas, 5,000 apartments, four hotels, two golf courses and a clubhouse, was expected to create 7,000 jobs and generate tourism.
The development suffered poor sales and is now the subject of a legal battle between the projects owners. Its future remains uncertain.