JANUARY 16, 2024

Oman property market to touch $6.23 billion by 2028: Report

Muscat: The Oman real estate market has picked up steam in 2022, and this momentum continued into 2023, according to a report by property consultant Cavendish Maxwell.

The report said, "As the population continues to grow, the Residential Property Market is expected to expand. It was estimated to have a market size of $4.01 billion in 2023, and this figure is projected to reach $6.23 billion by 2028, growing at a CAGR of 9.19 percent during the forecast period (2023-2028.

Oman’s commitment to boosting the real estate sector is evident in its approval of 19 new Integrated Tourism Licenses and an allocation of $11.37 billion for hospitality and real estate investments.

This plan is set to introduce over 16,500 hotel rooms and 42,500 housing units across the country, making room for non-Omanis to own property, thus enhancing foreign investments in the sector. It is a clear indicator of a bright future for Oman’s real estate market.

"First things first, infrastructure developments are progressing rapidly in Oman. Joint heavy rail projects with the UAE and Saudi Arabia are enhancing connectivity, and Muscat is set to acquire a metro system. Port development is equally encouraging, with the three major ports of Oman experiencing an 8 percent growth in traffic in 2022.

Real estate already contributes over RO1 billion to the Omani economy, while construction adds over RO1.5 billion per capita, this figure is still less than half that of the UAE."

Nevertheless, signs of market maturity are becoming more evident. One notable development is the introduction of Real Estate Investment Trusts (REITs).

Since their introduction in 2018, one publicly listed REIT Fund was initiated in 2020, boasting a capital of RO65 million.

Its portfolio includes various well-known properties, from retail and industrial to office and residential, making it a diverse mix of 20 properties with a targeted annual dividend yield of 7.5%.

To instill confidence in investors, Omani regulators have comprehensively regulated investment in Real Estate Investment Funds, paving the way for increased capital inflow, including from foreign investors.

REITs also have enhanced transparency within the real estate sector, fostering trust among investors and attracting more capital.

Less immediately obvious but equally important is the availability of targeted advice from international advisory firms for investors interested in Oman.

So far, all real estate sub-sectors combined in Oman account for less than 20% of the Gross Fixed Capital Formation, according to available project documentation.

In contrast, in the UAE, the same figure is twice as high. Even within this total, purely residential real estate projects remain at a relatively modest proportion in comparison to hotels and resorts, public projects, and mixed-use developments.