A Kuwaiti real estate company revives its mega project in Oman as a tourism city complex.
Developers set sights on Oman
Property developers are targeting Oman.
The country’s hotel and residential landscape is seen as an undersupplied market that provides room for growth.
Tourism contributed 929 million rials (Dh8.86 billion) to Oman’s economy in the first half of last year, a rise of 3 per cent from a year earlier, as 2.4 million international tourists passed through Muscat and Salalah airports, according to a report from the consultancy Colliers International in November.
Some 26 hotel projects are in the pipeline, accounting for 4,299 rooms in Oman, as of October, according to STR Global.
The supply, however, is moving slowly and there are no scheduled openings next year, said Filippo Sona, the head of hotels division in the Middle East and North Africa for Colliers International.
The market is expected to have around 14,400 rooms by 2017, up from 8,000 rooms in 2013.
“It is important for Oman to strengthen the demand generators rather than insisting on the supply,” Mr Sona said. “We are reaching a point in Oman where the hotels market needs to diversify and get more international brands in different segments of the market.”
Last week, a Kuwaiti developer announced its biggest project in Oman. Alargan International Real Estate Company revived its tourism city complex at a cost of 200m rials. It includes plans for hotels, seafront villas, one to three-bedroom apartments and malls surrounding an artificial lagoon.
“Oman has always been somewhat of a hidden secret but recently we have seen people flocking to places in Oman,” said Mashaan Al Mashaan, the head of business development at Alargan International Real Estate Company in Kuwait City.
“It is not an aggressive market, somewhat of a slower market, but the demand is there from the middle income residential market. In case of tourism, the potential is there given the situation in the region,” he said.
Capital investments in Oman’s travel sector reached 364m rials last year, and is expected to grow annually by 8.6 per cent on average until 2017, according to the World Travel and Tourism Council.
“But any mixed use development needs a good destination branding,” Mr Sona said.
Some of the big ticket projects under development include Kempinski The Wave, Imagine Project, Muscat Plaza and the Seeb Seafront in Muscat.
The Alargan project, spread over 500,000 square metres is 30 kilometres from Muscat.
Scheduled to be completed in five years, it is expected to have three hotels, with one under a 5-star luxury brand and the rest 4-star properties, adding 505 rooms in total.
It would also have three commercial spaces, including a mall with restaurants.
The project, expected to create around 2,000 jobs, would be financed through pre-sales and bank financing. The plan is to have pre-sales of around 30 per cent of the residential units, 50 per cent during construction and the rest will be sold after construction.
Alargan will build the residential units and develop the infrastructure for the rest of assets. “There is a lot of demand from the Gulf in general,” Mr Al Mashaan said.
The project is located in an Integrated Tourism Complex (ITC) zone that allows ownership by non-Arabian Gulf investors. Oman opened its real estate market to foreign investors in 2006.
Both Muscat Hills and The Wave projects are among the growing number of ITC developments coming on line in Oman.
Alargan is behind more than 10 projects in Oman, including residential and commercial spaces such as Beyout Al Faye, Al Hail Homes, Al Qurm Gardens, Naseem Salalah and Al Waha.