UAE-based Cavendish Maxwell has just opened an office in Muscat, Oman, according to a statement from the firm. The property consultant also announced the appointment of Khalil Alzadjali as head of its Oman business.

Speaking about the opening of the new office, Jay Grant, founder and chairman of the firm said, “The move is part of an ambitious yet sensible expansion plan that will enable us to get closer to clients, demonstrate our exceptional capabilities and meet the growing demand for our real estate services in Oman.”

Despite current market conditions, the property consultancy is confident about Oman’s prospects. The firm says the country has invested in enhanced oil recovery techniques to boost output, while non-oil investments into sectors such as tourism are expected to hit $1.17bn by 2026.

According to the firm, increased infrastructure spending and employment avenues are expected to boost demand for residential, commercial and specialist property classes. This, in turn, is expected to drive up demand for real estate data and market intelligence by banks, developers and property owners.

“A lot of landlords and developers have very limited information about the real estate market, such as what to build, what the market needs and the risks that different parties face prior and during the development process and after completion,” says Alzadjali. “The government and private sector should embrace working together in order to assist and improve the real estate market in Oman, such as by controlling tax on properties and ensuring transparency on property information.”

Alzadjali has over 14 years of experience in the real estate industry in Oman. After beginning his career in property valuations in 2003, he worked with developers, banks and private clients across the Sultanate.

Commenting on the new office opening, Nigel Armstrong, CEO of Cavendish Maxwell said, “Cavendish Maxwell can demonstrate an enviable track record of professional and efficient client services across a broad spectrum of service lines, including commercial and residential valuations, building surveying, machinery and business assets, investment and commercial agency and strategic consulting and research. Oman and the wider Middle East offers great prospects for the company’s continued expansion and growing client base and we are extremely excited about the opportunities ahead. Our intention is to make sure that Cavendish Maxwell continues to achieve many more milestones over the coming years.”

Majid Al Futtaim, the UAE-based shopping mall, communities, retail and leisure developer operating across the Middle East, has announced the launch of a new project in Sohar, the capital of the Sultanate of Oman’s Northern Governorate.

Scheduled to open in 2018, the project, known as City Centre Sohar, is a mall that will have 130 stores, a Carrefour Hypermarket and a nine-screen Vox Cinemas, the developer said in a statement. The project will cost $116.84 million, MAF added.

“As part of Majid Al Futtaim’s growth strategy, we aim to be at the forefront of Oman’s rapid development in the retail industry and bring the best shopping, food & beverage and entertainment experiences to Sohar with this contemporary urban project,” said Ghaith Shocair, Chief Executive Officer Shopping Malls, Majid Al Futtaim Properties.

“By introducing our renowned City Centre brand to Sohar, we will be enhancing the city’s retail landscape with more than 130 diverse stores, an 8,400sqm Carrefour Hypermarket, a nine-screen VOX Cinemas, in addition to an array of dining and entertainment options.

“Majid Al Futtaim’s investment in the city of Sohar underscores our commitment to creating great moments for everyone, every day.”

Located on the Batinah Highway, City Centre Sohar will add 40,000sqm of gross leasable area to the Sultanate’s retail sector. Sohar, a port city and major industrial hub, has seen substantial economic growth in recent years.

The construction contract for City Centre Sohar has been awarded to the Oman-based company Al Turki Enterprise and work will commence in November 2017, the developer added.

City Centre Sohar will target a LEED Gold Status within three months of opening, MAF said. This will include the implementation of sustainable building best practice with enhanced insulation, LED lighting and solar panels that will contribute to the centre’s energy requirements. Furthermore, condensation from air-conditioning and ventilation systems will be used for irrigation.

In addition to City Centre Sohar, Majid Al Futtaim Properties owns and operates the newly upgraded City Centre Qurum, as well as City Centre Muscat, which recently underwent a $70 million expansion.

Community-centred mall My City Centre Sur is also in the pipeline, as is Mall of Oman, set to be the Sultanate’s biggest shopping centre and representing an investment of $714 million.

Samsung Engineering and Petrofac, in 50/50 joint venture (JV), are to be awarded a refinery project contract in Oman worth $2bn. The refinery is spread across a site of 2,000 acres, and work on the 47-month project is expected to commence soon.

The Samsung/Petrofac JV will work on a utility facility that will produce the water, air, steam and electricity needed to operate the refinery, as well as crude oil storage tanks and a sewage treatment facility. Samsung said it expects the contract will be complete in 2021.

Choong Heum Park, president and CEO of Samsung Engineering said, “We will be able to successfully complete this project and further strengthen our market presence in the GCC, including Oman.”

The Korea-based firm said that this is the first major contract in Oman, and its first for DRPIC. DRPIC is a joint venture between Oman Oil Company (OOC) and Kuwait Petroleum International (KPI), which invests in refinery and petrochemical complexes.

E Sathyanarayanan, managing director of Petrofac’s Engineering & Construction group said: “The contract provides a valuable opportunity for us to continue to increase in-country value through engaging with the local supply chain and recruitment of local resources.”

Oman’s Duqm Refinery is part of the Duqm Special Economic Zone, and has awarded three packages for its planned 230,000 barrels-a-day refinery.

Masdar has signed an engineering, procurement and construction (EPC) contract with a global consortium comprising GE and TSK to build the Dhofar Wind Power Project in Oman, according to WAM. The project will be the first large-scale wind farm in Oman and in the GCC.

GE will lead the EPC consortium, and will provide 13 wind turbines powered by its 3.8MW wind turbine generator solutions. The wind farm is expected to generate 50MW, and will power an estimated 16,000 homes, while also offsetting 110,000 tonnes of carbon dioxide per year.

“Oman has immense untapped potential in renewable energy, particularly in solar and wind. Masdar is proud to be supporting the historically close ties between the UAE and the Sultanate by providing our experience and expertise from delivering cutting-edge renewable energy solutions across the world. The Dhofar Wind Power Project will play an important role in supporting the diversification of Oman’s energy mix, while providing a reliable source of clean power to serve its growing population and economy,” said Mohamed Jameel Al Ramahi, chief executive officer of Masdar.

GE says its turbines are designed to increase both annual energy production and flexibility in operation. TSK will support the consortium partners with the construction of the balance of plant.

Saleh Bin Nasser Al Rumhi, chief executive officer of RAECO said, “We are pleased to be supporting this project and the construction of the Dhofar Wind Power Project, which will be launched after signing of the project development agreement with Masdar in 2014.”

The wind power project is the result of an agreement that was established in 2014 between Masdar and the Rural Areas Electricity Company of Oman (RAECO). The project will be funded by the Abu Dhabi Fund for Development (ADFD).

Mohammed Saif Al Suwaidi, director general of ADFD added, “We are proud to fund the Dhofar Wind Power Project, the first of its kind in Oman with its innovative technology and which upon completion will contribute to the Sultanate’s position as a clean energy leader in the region and will represent 7% of the total installed power generation capacity in the Dhofar governorate, including its capital city Salalah, a major port and free zone.”

An as yet unnamed Spanish group is planning to build a major hotel in Oman, according to The Times of Oman newspaper. The hotel is expected to be a 500-room property and will be located in Jebel Sifah, a lifestyle community being developed by integrated tourism project developer Muriya.

Muriya is a joint venture between Egypt’s Orascom Development Holding (70% shareholder) and master developer Oman Tourism Development Company (Omaran).

Jebel Sifah is set over five kilometers of Omani coastline and spans 6.2m sqm. The development will include residential properties, a nine-hole golf course, restaurants and other hotels. A 200-room hotel is currently being developed by the Al Barwani group, and is said to be a key part of the first phase of the Jebel Sifah development.

“We are in quite an advanced stage of discussion with a Spanish group, which has several hotels in Europe and North America, for them to come and build more than 500-rooms,” Ahmed Dabbous, chief executive officer of Muriya Tourism Development, told the Times of Oman.

The Spanish group is said to be a developer, owner and operator of hotels across the world, and has its own hotel brand. “They have prepared the preliminary design and now the challenge is to structure the investment. We have already built the (basic) infrastructure in Jebel Sifah,” added Dabbous.

As per Jebel Sifah’s website, there are plans for several other hotels to be built within the development.

Oman plans to invest $10.39bn into developing new housing units for expatriates to purchase. Over 5,000 homes will be constructed under five Integrated Tourism Complex (ITC) projects, per a news report published by the Times of Oman.

At present, non-Omanis can only purchase property within ITC developments; however the government is also working to create additional projects, as part of its strategy to diversify the country’s economy away from oil and gas.

Five ITC projects have been announced including the Diyar Ras Al Hadd Resort, Omagine Project, Quriyat Integrated Project, Naseem A’Sabah Project and Al Nakheel Project.

Mubarak bin Hamad Al Alawi, advisor of legal affairs at Ministry of Tourism (MoT) told the Times of Oman, “Oman has taken a positive step by opening up the real estate market to Omanis, GCC citizens and other nationalities. The government has received a number of applications.”

The Diyar Ras Al Hadd Project will feature 700 residential properties, while the larger Omagine Project will have more than 2,000 homes. Naseem A’Sabah in Seeb will have more than 1,200 residential units, and will also include five star hotels, retail areas and a yacht club. The Al Nakheel Project in Barka will include hotels and hotel apartments, 1,436 residential apartments, villas and houses, all of which can be purchased by expatriates and citizens.

Al Alawi said that a royal decree now allows non-Omanis to own land and units in the Integrated Tourism Complexes, which are certified by the related entities in the Sultanate. Ownership is allowed for residence and investment, as long as it doesn’t violate the country’s regulations.

Oman Power and Water Procurement Company (OPWP) says it plans to launch a wind resource assessment campaign. In line with this, utilities company has floated tenders asking for proposals from third parties to carry out the research. The last date for submissions is November 26 of this year.

As per OPWP, the campaign will be conducted across the country in multiple locations and the tender includes the provision of equipment/sensors, installation, operation and maintenance and data validation. The research findings will be used to support the future development of wind power projects in Oman.

In recent months, Oman has been actively encouraging the development and use of non-conventional energy sources, including solar and wind power. The national programme for enhancing diversification, Tanfeedh, calls for a 10% contribution from renewable energy projects in the total power mix within ten years.

The country’s renewable energy projects aim to generate around three gigawatts of power – 2.5 gigawatts from solar and 0.5 gigawatts from wind plants.

MAN Truck & Bus Middle East has revealed it is currently delivering 33 state-of-the-art MAN Lion’s Coaches to Mwasalat, a government-owned public transport firm in the country. MAN Truck and Bus’ official partner in Oman, Arabian Engineering Services LLC (AES) is managing the delivery process and will work closely with the national bus operator to ensure effective after-sales support for the coaches.

Mwasalat is the first company in the region to add to its fleet MAN’s safest-ever Lion’s Coaches that are equipped with advanced technology to reduce accidents, improve passenger comfort and ensure efficient and safe driving. The advanced and emergency-braking MAN Lion’s Coaches, which use industry-leading accident prevention features, such as Emergency Brake Assist (EBA), Lane Guard System (LGS) as well as Adaptive Cruise Control (ACC), will replace the older Lion’s Coaches with more than 4,000,000 operated kilometers in Mwasalat’s fleet of public transport vehicles.

Ahmed Ali Al Bulushi, CEO of Mwasalat, said the purchase is part of Mwasalat’s efforts to extend its services in order to enhance connectivity in Oman.

He added: “Furthermore, the first order of buses contributes immensely to the Sultanate’s 2017-2025 vision for public transport that envisages reducing cars on the road to ensure smooth commuting for the public and improving the environment by an extensive public transport network.”

Mwasalat also added 35 Lion’s City buses to its fleet to overhaul the country’s public transport infrastructure. Some of the state-of-the-art buses will be used in the capital city, while others will be used for airport services.

“The MAN Lion’s Coaches are equipped with efficient safety technologies that will complement the government’s efforts to improve road safety by bringing down the number of accidents involving heavy vehicles,” said Franz von Redwitz, managing Director, MAN Truck & Bus Middle East.

O&G exploration and development firm Petroleum Development Oman (PDO) has invited companies to participate in a competitive tender for a 100MW solar photovoltaic (PV) project in southern Oman. This is the second solar PV project to come out of the Sultanate in recent months, as part of its push towards renewable and sustainable energy resource development.

According to the Oman Observer, the power generation project will be the first renewable energy venture for PDO, which is a majority-government-owned entity. The project will be developed as an independent power project (IPP) and electricity produced by the plant, once it is completed, will be managed by PDO exclusively, under a 23-year power purchase agreement (PPA) with the developer.

The IPP model has been the model of procurement of almost all the 6,000MW of gas-based power generation capacity in the Sultanate.

A PDO statement said: ‘It is envisaged that the project will be privately financed through a combination of sponsor and third-party equity and non/limited recourse debt under a similar structure to previous IPPs. It is intended that PDO will sign a direct agreement with the project’s lenders setting out financial commitments.”

The company that wins the competitive tender will be given a long-term concession to design, construct, finance, operate and maintain the solar plant for the duration of the PPA term. A request for proposal (RFP) is likely to be issued before the end of January, while the award for the concession will likely take place in June of this year.

One of Oman’s biggest equipment distributors, General Engineering Services (Genserv), says that the market should see sharp growth by the second half of 2018.

General manager Ahmed Rashed added he expects the market to rise by somewhere between 10% and 15%.

“The state of the market has increased the amount of emphasis our customers are putting on price and makes the competition that much closer,” he explained. “By continuing to provide excellent aftermarket support, we have kept our customers’ costs down even further.”

Rashed said he anticipates a rise in infrastructure spending, as Oman’s government has made it a priority. Plans are already in the works for new roads, airports, dams, sewage works and hotels. Genserv is currently working with construction companies and planning for their equipment needs so that the entire market will be ready for the surge in activity.

Rashed claimed that recent successes and high praise from these companies were partly indebted to it securing the rights to China-based but Volvo-owned SDLG’s products in 2012.

Between 2012 and 2016, Genserv’s annual sales of SDLG machines increased tenfold. However, falling oil prices put a strain on Oman’s equipment market, causing sales to fall across all of its offered brands. The result was that customers emphasized the need for more affordable, value-option machines.

“It was a challenge to introduce a new brand into an established market, but we used our name and reputation to promote trust in SDLG,” he said. “Our customers expect us to provide quality brands and good parts and service, and so they said, ‘If it’s coming from Genserv, then it must be reliable.’ Once the machines were out in the field, their benefits spoke for themselves.”

Construction is the number one industry that Genserv is selling SDLG machines to in Oman, followed by quarry and aggregates, energy and oil, mining and government infrastructure. As a result, the majority of SDLG machines sold are wheel loaders, graders and rollers.

“Customers want to have confidence in the accessibility of spare parts, the availability of the service people, and in the speed at which we can rectify issues with the machines,” Ahmed Rashed explained. “Oman is 310,000 sq km with a population of 4.4 million. Our goal at Genserv is to be accessible to all customers within 24 hours. We have spent a lot of time ensuring that our aftermarket capabilities are first rate.”

Drilling services specialist Saipem has won an onshore engineering and construction contract from the Duqm Refinery and Petrochemical Industries Company in Oman.

The contract is said to be worth $750 million and makes Saipem responsible for engineering, procurement, construction and commissioning under Package 3 ‘Offsite Facilities’ in the framework of the development of the Duqm Refinery. The refinery is located near the Omani coast in the north east of the country.

“We welcome with particular satisfaction the awarding of this new contract, which signals the relaunch of our activities in Oman, a country in which Saipem has operated successfully in the past,” said Saipem CEO Stefano Cao.

Duqm Refinery is a joint venture between the Oman Oil Company, the country’s national oil company, and Kuwait Petroleum International (KPI). Once the project has been completed, the refinery will have a capacity of around 230,000 barrels per day.

Saipem says it won the contract thanks to its distinctive competences in operations in harsh environments, remote areas and in deepwater scenarios.

Majid Al Futtaim says that it has opened its first community mall in the Sultanate of Oman. The My City Centre Sur mall represents a $40 million investment for the UAE retail operator and developer. More than 4,000 direct and indirect job opportunities are expected to be created in the surrounding area following its opening, it added in a statement.

“Majid Al Futtaim is committed to delivering an unrivalled retail experience to emerging communities in Oman, and the opening of My City Centre Sur achieves a major milestone in our investment strategy for the Sultanate,” said Ghaith Shocair, CEO – Shopping Malls, Majid Al Futtaim – Properties.  “As a company focused on the needs of the communities we serve, My City Centre Sur enables Majid Al Futtaim to increase the convenience and choice in retail, dining and entertainment for Oman’s residents and tourists. In addition, we are fostering economic growth and diversification, enhancing job creation, and delivering on our vision to create great moments for everyone, everyday.”

Located on Sur’s main commercial road, My City Centre Sur has than 50 retail outlets across 16,500 sqm and 484 parking spaces.

My City Centre Sur will serve as a fully integrated retail, dining, and leisure destination that is a new community hub for people to meet and connect, said Majid Al Futtaim. Sustainability was a key factor in the mall’s development, with an environmentally-friendly design and innovative architectural details that underscore Majid Al Futtaim’s goal of becoming ‘Net Positive in Carbon and Water by 2040’, it added.

My City Centre Sur is part of Majid Al Futtaim’s strategy to increase its total investment in Oman to $1.8 billion by 2020, which includes forthcoming destinations City Centre Sohar and Mall of Oman. Majid Al Futtaim’s investment in Oman’s retail, leisure and entertainment infrastructure supports the country’s National Strategy for Tourism 2040, which targets a 6% rise in the contribution of the tourism sector to GDP, and a near doubling of visitor numbers to 5 million annually, the statement concluded.

MAN Truck & Bus Middle East says it will soon launch a new initiative that uses customer feedback to continuously monitor the performance of MAN and its distributors. Called ‘CustomerFirst’, it is the first time that a commercial vehicles manufacturer will systematically record data on customer satisfaction to improve service quality in the region.

CustomerFirst has already had a positive impact in other markets for MAN leading it to be awarded at the German Excellence Awards 2018 in February in the “Products & Services – Customer Support” category.

The new programme was announced at the annual MAN Middle East After-Sales Conference which was held in Muscat, Oman in March. The event brought together importers from 14 Middle East countries as well as executives from MAN’s German headquarters and its Dubai regional office Dubai. MAN Truck & Bus Middle East’s Head of After-Sales Dr. Richard Brown said that the scheme ensures that MAN and its dealers are constantly delivering on their promises to customers over the days, months and years following the initial purchase of a vehicle. If MAN or its dealers are falling short, then a solution can be found early and quickly.

“The primary message of the conference was to focus on the latest Customer Experience Concept. Customer requirements are important as we want to react proactively and offer tailored solutions to meet their needs,” remarked Dr. Richard Brown.

Managing Director Franz Freiherr von Redwitz added that the programme is part of a suite of integrated after-sales solutions to ensure MAN is never too far away from a customer’s journey.

“Customers are more and more empowered and are looking for integrated solutions, end-to end and not just the product itself. An integrated offering is the key for future service contracts with every vehicle, we provide piece of mind so our customers can ‘focus on running their businesses’,” said von Redwitz.

Dr. Richard Brown added it is essential to introduce the CustomerFirst programme for the first time in the Middle East.
“Our focus is to be unified and offer a consistent experience across the Middle East. Through our close cooperation with regional partners, we can focus on offering products tailored for the regional requirements. The Middle East is different but unique and together with partners we need to see how to continuously innovate and customise our product offerings so we can be ready for the future.”

“The client’s brief for the projects has been achieved. They wanted state-of-the-art airports, and they’re going to get that. They’re not building airports to compete with the rest of the GCC, they are building airports that answer the requirements of the country”

Earlier this year, Oman’s Ministry of Transport declared that the new passenger terminal at Muscat International Airport would open in March, with all incoming and outgoing flights to be transferred from the old terminal to the new one. Dr Ahmad Al Futaisi, Minister of Transport and Communications, said the new terminal would serve as a “focal point for the world”. Claiming it would be a landmark of modern state monuments, he also highlighted that the new terminal would greatly benefit the sultanate’s national economy, particularly in light of the growth seen in civil aviation and other sectors.

The revamped Muscat International Airport will have the capacity to handle more than 12 million passengers annually, with ultimate expectations rising to 48 million passengers a year. Spread across an area of 335,000sqm, it will have 6,000sqm of duty-free shopping, 8,000 parking spaces and 96 check-in counters. The total built-up area of the passenger building is 580,000sqm, with the terminal consisting of three suites, each with three levels.

Retail outlets on both sides of the building cover an area of 12,000sqm. There are lounges for first and business class passengers, offices for airlines and other miscellaneous airport facilities. The building also accommodates a four-star, 90-room hotel.

With 40 aerial bridges and 29 waiting areas, there are ample systems to handle the increased volume of passengers and the larger aircraft currently in operation across the world’s airlines, such as the Airbus A380.

As handover is scheduled to happen imminently, Big Project ME met with Adel Merhi, Head of Projects and Country Manager for Oman at Hill International, to discuss how the American construction consultancy helped bring the airport to completion.

Having started its services at the project on 1 January 2013, Hill International was hired by the Ministry of Transport and Communications and the Public Authority for Civil Aviation of the Sultanate of Oman to provide consulting engineering services for the $5.2 billion expansion and modernisation of the Muscat and Salalah airports.

“On this project, we are not the project managers – we are the supervision consultants, and we provide commercial and contractual services,” Merhi says. “However, we work very closely with the client and the project manager, who was here before we arrived. Now the project management team is part of the client’s team, and basically the client has taken on the role of the project manager. They work closely with us to coordinate all the interfaces on the project.

“It’s really about working hand in hand with the client, and this is done through various high-level meetings and also through many other interface meetings that take place on a weekly basis, sometimes twice a week, as and when required.”

With the opening of the revamped airport so close when Mehri talks to BPME the majority of construction work is well over, barring a few minor items.

“Mainly, the challenges we faced on this project are normal for a project of this magnitude,” Merhi says. “They were mainly around the interfaces between the different contract packages, and we worked with the client [to resolve them]. They were very helpful. There was assistance from the top senior management from the client’s side, working with us and the contractor, to resolve those interface issues. We had, and still have, a dedicated team for the interfaces between the different contract packages.”

Having this level of cooperation is crucial, Merhi says, pointing out that the airport uses the latest technology and it is crucial that all systems work smoothly. To achieve this, the client’s team, Hill International and the designers coordinated with each other and ensure that the latest technology was implemented on the project.

The other airport in the contract signed by Hill International at the same time as Muscat International Airport was the Salalah Airport, which opened in June 2015. With the airport fully operational, Merhi says it stands up to comparison with any other airport in the GCC region and has been crucial to the economic growth of an important region of the country.

“When you come to the airport, you feel like you’re in an international, high-level airport,” he says. “That gives a good impression to visitors, and there are a lot of visitors who come directly to Salalah from across the GCC. Salalah as a region is expanding. Many hotels are under construction, and I believe that the airport is going to help expand tourism. This is a new airport with two new runways and a new terminal.

“While it was a normal construction process, for us the biggest challenges are, whether it’s a small building or a major project, always challenges with interfaces, and that was no different with the airport of Salalah. We had interfaces between different systems that we needed to address, which we did in a professional way, and we managed to deliver a state-of-the-art airport.”

One issue was ensuring there were adequate materials and supplies in place. Given that the city is on the other side of the country, well away from the main hub of Muscat, Merhi says proper planning was crucial.

“Of course, Salalah is not the capital, but we dealt with the issue of supplies with proper planning well ahead of time. We had people dedicated just for procurement, making sure that materials come in on time. Some of the materials were supplied locally – the concrete and blockwork, things like that.

“Anything that was available from Salalah was used, but others came either from Muscat, from the region or internationally. We kept a procurement log, and if there were any possible delays for anything, we knew in advance and could then get in touch with the suppliers directly, and even travel with them – to make sure that things were delivered on time.”

With Muscat International Airport now set to be delivered as well, Merhi reflects on the two projects, stressing that they will have an impact on Oman’s economy for years to come.

“The client’s brief for the projects has been achieved. They wanted state-of-the-art airports, and they’re going to get that. They’re not building airports to compete with the rest of the GCC, they are building airports that answer the requirements of the country. I believe that the country is coming into a big expansion phase, and so these airports are a vision for the future.

“They were really good projects [to work on]. Hill International had worked, and continues to work, very closely with our clients and stakeholders to deliver the Salalah Airport, and now the Muscat Airport as well.”

The continuing recovery of oil prices, along with the introduction of natural gas production at the Khazzan gas field and the completion of the new Muscat International Airport are some of the factors that are expected to improve confidence and encourage private sector investment in Oman, thus bolstering GDP growth. This is likely to boost the real estate sector’s performance in the country.

Despite economic slowdown over the last two to three years, the contribution of the real estate sector to the Oman economy continued to increase from 3.9% of GDP in 2014 to 5.2% in 2016. However, 2017 proved to be a challenging year for the sector, as rents and price across all segments of the market, including residential, commercial and retail, declined against weakening demand.

The latest figures released by the Ministry of Housing, Oman indicate that the total value of property traded in the country during 2017 amounted to $6.7bn, down around 61% compared with 2016. Mortgage contracts registered the steepest decline from 2016 at 74%, to $3.6bn in 2017.

To boost investment in the Oman real estate sector, the Capital Market Authority (CMA) of Oman issued the regulatory framework for introduction and trading of real estate investment trusts (REITs) on the Muscat Securities Market in January 2017. The regulation opened the market to all Omani residents, including expats, allowing them to purchase a part of a real estate development in the Muscat Securities Market. This is expected to further boost real estate market activity.

Tourism Overview: Oman

Oman is focusing on its tourism industry as a driver of economic growth. Since the launch of the 2040 Tourism Strategy of Oman, the contribution of tourism to the sultanate’s GDP increased to 2.8% in 2016, with year-on-year inbound tourists increasing to 3.3m by December 2017, according to the National Centre for Statistics and Information (NCSI). Government initiatives are focused on boosting the sector’s contribution to GDP to 6-10% in 20 years, while creating more than 500,000 jobs through investment of $51.9bn.

One of the key initiatives to boost the sector’s contribution is the launch of e-visa services in July 2017, to enhance efficiency of the arrival process in Oman and the overall arrival experience. Further, it continues to promote Integrated Tourism Complexes (ITCs), freehold areas that offer residence visas for those who buy properties in the country.

The upcoming new international airport in Muscat, expected to open later in 2018, is also likely to boost incoming tourism numbers to 21m by 2035, up from 8m at the end of 2015, an annual growth rate of more than 5%, according to International Air Travel Association (IATA).

Integrated Tourism Complex (ITC) Developments

As a part of its move to reduce the country’s reliance on oil and diversify the economy, the government of Oman has opened the real estate sector to investment from expatriates in Integrated Tourism Complexes (ITCs). These are freehold mixed-use developments featuring different asset classes including residential, hospitality, retail, leisure and offices. Expatriates constitute 45% of the total population as of December 2017 and have historically had limited exposure to the property market.

The government is developing more than 5,000 homes in collaboration with private developers in five ITC projects: Diyar Ras Al Hadd Resort, Omagine Project, Quriyat Integrated Project, Naseem Al Sabaah Project and Al Nakheel Project.

Residential Rents and Office Market Overview

A continuous decline in rents has put tenants in a stronger position to negotiate terms with owners, who in turn are offering better rents and flexible lease terms. Landlords have also been offering three- and six-month advance payments, as opposed to annual payments, to reduce vacancy risk on the property. Furthermore, housing demand is shifting towards more affordable housing, causing a stronger rental decline in the premium locations. Tenants are migrating and showing a preference towards larger communities with a broader array of existing infrastructure and amenities offered at affordable value.

Rents are expected to fall further due to the government’s move for Omanisation through the imposition of a new expatriate law causing a six-month ban on expat visa issuance in 87 occupations, as well as residential project oversupply from previous years.

Mixed-use developments are expected to lead demand for offices; however, job cuts due to the economic slowdown have continued to put pressure on the office real estate market. Rents continue to decline, especially in central business districts (CBDs). Tenants are becoming more sensitive to the location and quality of the property they rent, the amenities offered at the property and the price they are paying, giving rise to the development of new CBDs. Landlords responding proactively to market conditions by offering competitive rents for high-quality properties are witnessing quicker absorption and higher occupancy levels.

The performance of the office market is expected to be largely driven by a combined effect of economic diversification and development of sectors other than oil & gas, as well as accessibility and amenities such as parking facilities being offered.

Mixed-used developments featuring a combination of residential, office and retail developments are further likely to underpin the performance of the country’s real estate sector, as they offer competitive prospects to both developers and tenants. These master developments have started to attract an increasing number of tenants by offering better quality of life, reduced commute times to work and accessible retail outlets.

Retail Market Overview

The retail market is in transition, due to the changing shopping preferences and habits of consumers. Despite weaker consumer sentiment and declining retail sales due to poor market conditions, a significant amount of retail space is being added to the existing stock in the country, mainly in the capital. The retail landscape of the country is gradually shifting towards larger format malls from stand-alone retail outlets, owing to changing shopping preferences. Consumers now look forward to a holistic shopping experience combined with leisure and entertainment.

In 2018, two new malls from Landmark Group branded Oasis Malls, in Sohar (33,000sqm) and Salalah (35,000sqm), as well as Majid Al Futtaim’s My City Centre Sur and City Centre Sohar, among others, are expected to be added to the supply.

Dutch heavy lifting and transportation company Mammoet says it has successfully completed the safe transport and installation of four 1,180-ton NGL bullet tanks for Oman’s biggest petrochemical project.

Conducted at the Liwa Plastics Industries Complex (LPIC) project which is owned by Orpic, the bullets – each measuring 6 m in length and 7.8m in diameter – were positioned on sand beds in a synchronized tandem lift utilising a 1600-ton PTC ring crane and a 1,200t crawler crane, said Mammoet.

The company added that the small footprint enabled the PTC 35 DS crane to work within the limited area onsite “utilising the available space as efficiently as possible.”

Mammoet has been providing ongoing heavy lifting and transport solutions for this petrochemical project since 2017 and said in statement that it has contributed to “the outstanding safety milestone of 10 million man-hours” worked lost time injury (LTI) free.

“The achieved safety milestone is a testament to the incredible team that has been put together by our valued client. Commitment to safety is a core value and an integral part of Mammoet’s culture. With every workforce member staying focused on incident-free operations we can send everyone home safely to their families each day,” commentedAndrew Lees, SHEQ Director Mammoet Middle East and Africa.

AccorHotels has signed a management agreement with master developer Oman Tourism Development Company (Omran). The deal will see the first ‘ibis Styles’ hotel open in the sultanate.

The hotel will be located within the Oman Convention and Exhibition Centre (OCEC) master development in Madinat Al Irfan. The 280-room project is set to open in 2020 and will be the first internationally branded hotel within the OCEC development.

“As one of our most dynamic economy brands within our global portfolio, I am excited to announce that ibis Styles Muscat will be the first of its kind in Oman. What makes this so remarkable and relevant is that ibis Styles Muscat will be a perfect complement to the new state-of-the-art Oman Convention and Exhibition Centre (OCEC), with its value positioning, eclectic design and genuine hospitality, which will appeal to a wide range of clientele and will further widen the Mice market in this destination. He further added: “Our new partnership with Omran will also allow us to further explore growth opportunities and to contribute towards the development of the travel and tourism sector in the country,” said, Olivier Granet, CEO of AccorHotels Middle East and Africa.

AccorHotels says it currently has eight properties under operation and in the pipeline in Oman. Additionally, the hotel operator says its network of operational and in-pipeline projects in the Middle East and Africa is over 300 hotels, which will add a collective total of 80,000 rooms to 30 countries.

Peter Walichnowski, CEO of Omran added, “This partnership with AccorHotels to introduce ibis Styles to Oman remains in line with our wider strategy to grow and fully develop the tourism and travel sector in the country. The Oman Convention and Exhibition Centre is positioning Muscat as a leading business tourism destination in the Middle East, opening the doors to travellers who have not had Muscat on their destination list before. This will contribute to Oman’s overall economic growth through increased visitor spend and new job opportunities.”

Across the Middle East and Africa, there are currently 15 ibis Styles hotels in operation, the most recent being the ibis Styles Manama Diplomatic Area in Bahrain and the ibis Styles Makkah in Saudi Arabia.

Oman’s construction sector is witnessing robust activities with the value of the total 2,410 active projects in the Sultanate exceeding $190 billion in April 2018, according to a report by BNC Network, a project intelligence provider in the MENA region.

Among these, 1,840 projects worth $61 billion are urban construction projects, while 70 projects, worth $39 billion are in the oil and gas sector, and a further 150 projects worth $32 billion are in the transport sector. Furthermore, as many as 230 developments – worth more than $29 billion – are utility projects, while 110 projects worth $27 billion are industrial sector focused.

With regards to the status of these projects, 1,730 projects, worth $57 billion, are in progress – either under tender or under construction, while 350 projects, worth $71 billion, are in the planning stage, the report said.

Of these, 240 projects worth $55 billion are in concept, while 110 projects worth $15 billion are in design, it added.

“With a significant increase in contract award during Q4, 2017 as compared to the preceding year there is a significant amount of construction work on-going and the project pipeline indicates a stable construction market in the coming two years.” Avin Gidwani, chief executive officer of BNC Network, said.

“If the current oil price holds, we expect several projects that are currently on hold to resume, providing a positive impetus to the overall economy of Oman. The increase in oil price is a good sign for the oil exporting countries of the GCC which helps the current account deficit to turn into current account surplus.”

As many as 330 projects are currently on hold. These projects are worth more than $61 billion, the BNC Oman Construction Intelligence Report said. This means, it explained, that in terms of value, more than a third of the $190 billion worth of projects are currently on hold.

With crude oil price hovering around US$70 per barrel, the GCC countries – including Oman – could see an increase in government reserves. Part of the windfall is then expected to be invested in large infrastructure projects, energy and power projects that will help the economy to grow further, the report said.

Law firm Dentons says it has advised Muscat-based real estate developer Aflaj International LLC on its role in respect of a new 11,000 sqm residential development within the Muscat Hills integrated tourism complex.

In a statement Dentons noted that Aflaj is a shareholder in Maysan Properties SAOC, a company that was established earlier this year to undertake the development. The firm has advised both on the establishment of the project company and a related joint-venture agreement.

Managing partner and head of corporate in Muscat, Nick Simpson advised on the project with associates Yasser Taqi, Riaz Haq and Yaqdhan Al Busaidi.

“We are delighted to have assisted Aflaj on this new and exciting venture and look forward to collaborating with them on future projects,” said Simpson.