It may not make the headlines, but that’s the way Oman likes it. With a population of just 3.2 million people, the economy has been quietly expanding and attracting fur-ther foreign investment. For the last three years, Oman has consecutively achieved real GDP growth of more than five per cent.

Focusing on diversification

OMAN

The Sultanate of Oman, the third-largest country in theArabian Peninsula, is blessed with the widest variety of

natural landscapes in the Gulf and overlooks three seas: theArabian Gulf, the Gulf of Oman, and the Arabian Sea. It bordersSaudi Arabia to the west, the UAE to the northeast, and Yemento the southwest.

Just like its neighbours, Oman is facing a future of dwindlingoil reserves, combined with a growing population of youngpeople. Currently around 15 per cent of Omanis are under 15,and this large labour force will need jobs in the years to come.

To deal with these challenges, Oman launched its Vision2020 economic development programme in 1995. It outlineshow the economy needs to diversify away from its reliance onoil, while simultaneously increasing privatisation and‘Omanisation’ – the training and employment of Omanis.

Vision 2020 wants to reduce the oil sector’scontribution to nine per cent by 2020, and raise the

Area: 119,500 square milesPopulation: 3,311,640 GDP per Capita: $24,000Language: Arabic (official)Capital: MuscatGovernment: MonarchyMonetary Unit: Rial Omani(RO)Imports: Machinery & trans-port equipment, manufacturedgoods, food & live animals, bev-erages & tobacco, chemicalsExports: Predominantly oil &gas exports.

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contribution made by the gas industry from 1.5 per centin 1995 to 10 per cent. Oman has an estimated 34.6trillion cubic feet of proven gas reserves, so there isplenty of opportunity here. The government isstimulating gas-related and energy-intensive industrieslike downstream petrochemicals, fertilisers andaluminium production, which is also helping to grow themanufacturing sector.

The government’s industrial strategy also focuses ondeveloping export-oriented and processing businesses, andprojects that will employ a large number of Omanis. Itencourages precision engineering industries, as well ascapital, technology and knowledge-intensive projects.

Paired with this is a carefully calibrated tourism strategy,aimed at the high net worth market. The government ismarketing Oman’s ecological and geographical diversity,and allowing a number of high quality real estate andtourism development projects.

At the heart of these plans is the need to attract foreigninvestment. The government is particularly keen towelcome companies that can offer technology transfer,and employment and training for Omanis. The Ministry ofCommerce opened the Omani Center for InvestmentPromotion and Export Development (OCIPED) in 1997.

The Sultanate places no restrictions on the flow ofcapital or the repatriation of profits. All registeredcompanies are taxed at a maximum of 12 per cent of netprofit, regardless of their percentage of foreignownership. Omani branches of foreign companies aretreated as foreign entities and taxed at a maximum 30 percent rate.

Oman joined the World Trade Organization in 2000,but continues to keep its currency, the Omani rial, peggedto the US dollar. The Sultanate recently announced that itwill not be joining the planned Gulf Cooperation Council(GCC) monetary union in 2010.

Natural attractions take centre stageIt has the best mix of scenery in the Gulf, an abundance of land, the lowest property prices in the region, and its own unique architectural style. And now, with a change

in property ownership laws aimed at attracting more foreign investors, Oman is experiencing a real estate boom.

Yet this is not a mini-Dubai of skyscrapers and mass tourism.Instead, Oman is building attractive developments that

reflect its own heritage – aimed mainly at the high-end market –and remaining true to environmental principles. In this way, itsreal estate sector is creating a sustainable, twenty-first centurymodel for development that is attracting global attention.

Unusual for the Middle East, Oman combines a mix ofdeserts, fjords, mountains ascending up to 9,000 feet withoccasional snow, and an unspoiled coastline of pristine beachesand coral reefs. Its capital city, Muscat, is a thriving metropolisthat still manages to maintain a distinct charm. Its whitewashedlow-rise buildings are located along white sand beaches, setagainst a mountain backdrop. And this is just one of severalprosperous cities in Oman.

In fact Oman has many ingredients that make it a developer’sdream. It has high oil and gas revenues, a 40 per cent expatpopulation in Muscat, rising income levels and a fast-growingprivate sector. Yet until the 1960s, it had only six miles of pavedroads. The current Sultan, in power since 1970, has worked toliberalise the economy and bring in foreign investors. The resultof this legacy is that Oman has great tracts of undeveloped land.

Change in property lawUnderlining its commitment to attracting investment, the

government has changed the law to open up property purchasesto foreigners. Gulf Cooperation Council (GCC) nationals havealready been able to buy property anywhere in Oman since 2004.

A major change came in 2006, when foreigners were allowedto buy property on a freehold basis in designated areas. The lawnow gives full rights of inheritance according to the laws of theinvestor’s country of origin, and residency status for propertyowners and their immediate family. Commercial real estate is stillthe exception in Oman, and cannot be owned by non-GCCnationals.

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The consequence of the change in law is sustained interest inreal estate investment from the UAE, Saudi Arabia, Qatar andKuwait, as well as the UK, India, Pakistan, Egypt, Jordan andLebanon.

Economic diversification The Vision 2020 strategy is designed to help Oman diversify

and develop its economy away from oil and gas. It sets out goalsto make Oman a global tourism and business hub, and this willbe partly facilitated through real estate development.

The current economic development plan, covering the yearsfrom 2006-2010, wants 46 per cent of investment in new projectsto come from the private sector. And the government hasestablished Omran, its wholly owned company, to facilitate realestate and tourism investment.

Another factor contributing to this boom is the availability ofnew mortgage products. Central Bank regulations now enablecommercial banks to make up to five per cent of their fundsavailable for residential loans, and there are competitivemortgage products available in the market.

Oman now has an estimated US$33 billion of public andprivate projects under construction, with more planned. Aselection of these projects is outlined below.

The Wave, MuscatAt a cost of US$805 million, The Wave, Muscat is set along 12

miles of beaches in Muscat. It will feature a Greg Norman-designed golf course, marina, luxury hotels (from Kempinskiand Fairmont Hotels and Resorts), shops and restaurants, andaround 4,000 residential units. The attraction is clear: where elsein the world can investors buy beach villas in a capital city?

There is already very strong demand for this development.When 70 new residences at The Wave, Muscat went on sale,priced on average at US$650,000 for a 3,500 square-foot beachvilla, they sold out in 90 minutes.

Blue CityA mega-project located 180 miles west of Muscat, Blue City –

also known as the Al Madina Al Zarqa development – is a US$20billion residential and tourism venture expected to attract up to

two million visitors each year. It will feature an 18-holechampionship golf course, three five-star hotels, a tourist village,heritage museum, waterfront amphitheatre, and a boutiquehotel run by British hotelier Gordon Campbell-Gray.

With more than 2,000 apartments and villas, Blue City willeventually be home to around 200,000 people. World-famousBritish architectural firm Foster + Partners is working withOman’s Ministry of Heritage and Culture to incorporate alocal design aesthetic on the project, combined with moderntouches.

The Malkai at BarkaOpening in 2010, the US$250 million Malkai at Barka

residential and resort complex will be set in 216 acres. Its countryclub, boutique hotel and homes will be built on just 10 per centof the total site, offering privacy and seclusion. Villas open toforeign buyers will include a private swimming pool and viewsonto the golf course.

Other projectsThe government’s Oman Tourism Development Company

and Orascom of Egypt are creating a US$600 million jointventure, called Muriya, which will showcase a six-star hotel, officespace and a retail area.

Located close to Seeb Airport – which itself is undergoingmodernisation – the Muscat Golf and Country Club includes an18-hole golf course and elegant residential units.

Salam Yiti is a US$1.7 billion development with everythingfrom its own marina and beachfront houses, to mountain villas.And the Barr Al Jissah resort was launched in 2006.

Looking to the futureThe government has brought in environmental protection

laws to guard Oman’s unique landscape. The majordevelopments are all showcasing green initiatives, such as thegolf course at The Wave being irrigated with recycled water.

Real estate sector investment is estimated to have grown five-fold in the last few years alone. With around 40 integratedtourism and residential projects already under construction,Oman is putting itself firmly on the international map.

Musandam

The Wave, Muscat

The Wave, Muscat: Leading the way in luxury realestate development

As the first integrated tourism development of its kind in Oman, The Wave, Muscat is groundbreaking in many ways. It also represents one of the first opportunitiesto own freehold real estate in the Sultanate. No wonder that buyers from 40 different nations have already snapped up property there.

As CEO Nick Smith points out, The Wave, Muscat is not justabout building and selling, it’s also about educating and setting

standards. “The Wave, Muscat has not only delivered on theexpectations of the investors in the region,” he says, “but has alsohelped put Oman on a regional platform as a country where thereal estate sector has boomed in the recent past.”

A lifestyle opportunityThe Wave enjoys a unique location on 4 miles of natural

beachfront, close to both Muscat city centre and the airport. Oncecompleted, the development will feature a Greg Norman Links 18-hole golf course, the only one of its kind in the region. A thrivingmarina village will offer guests and residents a 300-berth marina, aswell as luxurious dining and retail experiences, and there will bethree five-star hotels, including one from Fairmont Hotels.

The project will create a unique lifestyle opportunity forresidents and visitors alike. The concept is to create a “real place forreal people” where a multitude of cultures can live together in avibrant and exciting community. Attention to detail is being paid toevery aspect, particularly the architecture. The fusion of Europeanand Omani architectural designs is one of the most attractiveelements of The Wave, Muscat giving it a unique look and feelwhere tourists from around the world can instantly feel at home.

Diverse culturesMr Smith believes that the diversity of cultures in the Middle

East plays a big role in attracting foreign investment. “Oman has adeep-rooted culture and rich heritage, which made the idea ofhaving a mixed use community very unique and inspiring. Thefusion of Omani and European architectural design has drawnhuge interest among potential buyers, coupled with the freeholdownership legislation.”

Currently just over 50 per cent of buyers are Omanis, and theother three top nationalities are from Britain, India and the GulfCooperation Council (GCC) countries. The value of the residentialunits has increased significantly since launch, and the level of salesinterest suggests that the value of properties at The Wave willremain on an upward trend.

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Strong demandSo far a total of 900 properties have been sold in five launches,

generating sales to date of more than US$550 million. The saleshave been structured like this to provide maximum security tobuyers in terms of both payment structure and developmentcontrols.

Construction tenders worth US$500 million have been issuedso far, and with nearly 4,000 workers on site, the development israpidly taking shape. A total of 120 villas and townhouses will behanded over to their owners by the end of 2008.

By the end of May 2008, 190 villas, 191 townhouses and 114apartments were at various levels of completion. In totalconstruction had begun on 495 properties, versus a target of 336for that point in the construction schedule.

In July 2008 three show villas will open their doors, givingprospective buyers a taste of the stunning interiors they couldenjoy in this sophisticated world of luxury community living. Astate-of-the-art Selection Centre also opened its doors to customersin 2008, enabling them to select and personalise the finishes totheir homes.

Award-winning developmentWhat’s more, The Wave has recently won six regional and local

awards. It won four at the prestigious CNBC Arabian PropertyAwards ceremony in Dubai: Best Development, Best ApartmentDesign, Best Marina Design and Best Golf Course Design. HomesOverseas Magazine named The Wave, Muscat as Best LuxuryDevelopment in 2007, and The Wave, Muscat has also been therecipient of three awards for Best Website in the real estatecategory at the Oman Web Awards for the last three years.

Environmental concern Mr Smith is keen to emphasise that The Wave is pushing the

boundaries of construction within Oman. “That is an exciting taskwhich carries with it a great deal of responsibility towards thecommunity.”

“The goal has and always will be to exceed expectations anddeliver quality homes to our buyers and investors withoutcompromise to the environment. We understand the importance ofprotecting Oman’s immense natural beauty and culture, and havetaken proactive steps to limit the environmental impact of thedevelopment.”

When the project began, an extensive Environmental ImpactAssessment (EIA) was carried out to determine the impact of theconstruction on the flora and fauna of the ocean bed. This studyconcluded that construction would not be detrimental to theenvironment.

Pioneer developmentThe Wave, Muscat continues to lead the way in many areas. By

creating a new community in the capital city Muscat, it will in turnattract foreign investment into the local economy. And as the firstdevelopment to offer freehold living in Muscat, it has already sealedits place in the history books.

“This pioneering development at the heart of Muscat will bemore than a real estate development,” explains Mr Smith. “It is amulti-cultural community offering homeowners and visitors alikethe opportunity to fulfil their dreams and experience the wondersof the Sultanate of Oman.”

The Wave, Muscat

Jewel of the Gulf takes centre stage

The Sultanate of Oman is putting itself firmly on the map as a place to discover. A carefully executed tourism strategy aimed at high-end visitors is achieving results,with Oman gradually drawing attention as a premium holiday, eco-resort and honeymoon destination.

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“The future of tourism in Oman is promising, to say the least,”according to Minister of Tourism Dr Rajiha Bint Abdulameer BinAli. “I am optimistic about the future of tourism in the Sultanate,supported by the positive developments in the sector in recentyears.”

Unique in the GulfOman’s natural landscape, she points out, gives it an edge

compared to neighbouring states. The Sultanate has everythingfrom mountains and deepwater fjords, to sand dunes, salt flats,green hills and of course its stunning beaches. Visitors can enjoyscuba diving and other water sports, as well as turtle, dolphin andbird-watching – and the more active can try a desert safari,trekking, rock climbing, caving or cycling across mountains andwadis.

With more than 500 forts and castles, a number of UNESCOWorld Heritage Sites, great shopping and a rolling programmeof festivals, Oman really does offer something for everyone. Andwith its year-round sunshine, Oman is also ideal for the lucrativeconference and incentive market.

Developing the marketDr Rajiha points out that the Ministry of Tourism looked at

how to make the most of Oman’s advantages some years ago, andbegan to introduce a variety of tourism products.

“Among the new attractions is the Hota Cave, which wasopened for tourists at the end of 2006 as the first of its kind in theregion,” she says. “Plans are also underway to develop anothercave, which is the second-largest worldwide, as a new attractionfor tourists.”

UK a crucial marketMore than 200,000 British tourists already visit Oman each year,

making the UK the number one European market. Demonstratingthe importance of the UK market, the Sultanate has arepresentative office in London to help with marketing efforts.

The national carrier Oman Air has now separated from GulfAir, and introduced a direct London-Muscat flight. With thisavailable, the numbers of British visitors are set to rise further.

Dr Rajiha comments: “The UK market is very important to us inview of the comparatively large numbers of visits from UK nationals,including expatriates residing in Gulf states, in comparison with otherEuropeans. For this reason our marketing strategy will be intensifiedin this market to increase the inflow of this group.”

Private sector participationForeign participation is a key pillar of the government’s

tourism strategy. To help attract more investment, Dr Rajihaexplains, the government is revising laws and regulations, andimproving the incentives available.

“The role of the private sector, both domestic and foreign, isour main concern, because we would like it to assume a leadingand prominent role in tourism development in the Sultanate,”she says. “Our experience so far has been encouraging in termsof the considerable inflow of foreign investment, not to mentionthe active role played by the Omani private sector.”

To enhance the confidence of both developers and buyers inthe real estate sector, she adds, the Ministry of Tourism is closelyregulating this fast-growing sector. And in terms of the mega-projects now underway, the Ministry is ensuring proper regional

distribution so that the Muscat area does not becomeovercrowded with large-scale developments.

Five Year PlanOman is currently midway through its seventh Five Year

Development Plan (2006-2010), with a major focus ondeveloping the tourism industry. It sets out a number of goals forthe tourism sector, including achieving an annual averagegrowth rate of at least seven per cent, improving employmentopportunities for Omani nationals, and continuing withbalanced regional development.

The Plan also outlines how Oman will achieve maximumbenefits for local communities, activate domestic tourism,encourage the role of the private sector in tourism development,and commit to sustainable tourism development.

GDP contribution risingThe tourism sector’s current contribution to Oman’s GDP –

which includes hotels and restaurants only, but not travel agents,tour operators, airlines and car rentals – is around one per cent.That may seem a modest figure, but Oman is in the process ofrepositioning its economy away from oil and gas revenues, andtowards generating sources of revenue elsewhere.

And tourism is growing at a healthy rate. The sectorgenerated revenue of OMR 103.2 million in 2006, an increase of19 per cent on the 2005 figure. The goal is for tourism to accountfor five per cent of GDP by 2020. That means tourism numberswould rise from around 78,000 back in 1994, to over 728,000 in2020. For a high-end destination, this represents attractive,sustainable growth.

The Wave, Muscat