By Samuel Kutty -
MUSCAT — Sales in the residential property market in Oman continue to be fluid with both buyers and owners playing a wait-and-watch game.
However, with new projected plans for housing scheduled to go online in 2012, real estate players are cautiously optimistic about the growth.
At the same time, the leasing market is showing the most interesting shift in balance between tenant and owners expectations, with many more property variables such as design, style, location, age and size, as well as superior facilities affecting pricing.
The integrated tourism complex market is the increased choice that will become available to investors as previously delayed developments are being re-master planned and tendered and will come to the market in the next couple of years. Lessons have been learnt over the economic cycle and there will still be great opportunities.
Hilal Ali al Sulaimani, General Manager of Hilal Properties, says: “the strength of Oman’s real estate stems mainly from both proactive government foresight and the nature of the market here”.
From the perspective of a real estate developer, who is seeking a safe investment option, Oman has all the potential to make a magnificent and sustainable destination.
“Ever since Oman formulated land ownership rules, the real estate scene in the Sultanate received a real fillip. Omani freehold has been making waves and is on the threshold of making a new yardstick for property development in the region the freehold way”, he adds.
According to Cluttons, the variable market is putting downward pressure on landlords, and is creating a shift from the ‘good times’ to a new residential phase.
“In 2012 landlords will have to work harder to compete and provide real value for money, by meeting tenants expectation”, says the real estate specialist.
The earlier part of 2011 signalled the start of a more stable and recovering housing market for Oman. “Buoyed by increased oil prices and a robust economy, demand in the residential housing market has never been stronger, but under the constraints of a continuing oversupplied market, buyers and tenants will be very much governing the real estate trends for 2012”, says Cluttons.
Muscat continues to yield strong demand but an increase is seen in demand for properties westwards out of the city. Expressway has opened making outlying areas more accessible.
When allied to the trend of Muscat to expand westwards due to topographical constraints, the result has been an increasing need for housing affordable in areas such as Al Khoud, Maabela and Seeb. The development of the western part of the capital has also received a significant boost from the opening of the Muscat Expressway which has increased the area’s accessibility, and significantly improved the travel woes.
At the same time, thanks to the increasing amount of supply, price-driven rents have dropped over the last few months. To add to this, tenants have now a wide range of choices with many new apartments and villas coming up in the city area. In contrast to the past, the new buildings have more quality and amenities.
“Rental values for office space will continue to soften as new office space enters the market, says Cluttons with demand in the capital area remaining relatively steady over the next 12 months. The majority of demand will remain, however, on smaller spaces. Flexibility in office space design to cater for smaller space occupiers will be vital” says Cluttons.
Suitable car parking facilities will remain a key feature in attracting office space tenants. While there is strong interest in Grade A office space, many tenants will continue to be unwilling to pay a significant premium in comparison to the rental values for Grade B space in the same area.
Continued growth of the industrial and logistics sector, with the on-going development of shipping ports, free-trade and industrial zones in Salalah and Sohar is expected in the coming months.
With greater certainty on the development of the new industrial city at Duqm, increased clarity from the government as to plans for the development of the industrial and logistics sectors, and continued investment in transport and power infrastructure will help to drive forward the development of the industrial and logistics sector.