2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
FOREWORD Cavendish Maxwell is a highly respected independent firm of chartered surveyors and property consultants, focusing on property services throughout the Middle East and Africa. Established in 2008, Cavendish Maxwell is now one of the most influential property consultancies in the region. As a fully qualified member firm of the Royal Institution of Chartered Surveyors (RICS), and with extensive knowledge of the region, Cavendish Maxwell has the necessary experience, expertise and insight to deliver property advice of the highest standard. Our reports are used for loan security, audit, insurance reinstatement, dispute resolution, risk management, debt recovery, performance analysis, project financing, development strategy and government initiative implementation. We provide a comprehensive range of property services across all our departments, each of which is headed by highly skilled, experienced and fully qualified RICS chartered surveyors. Our various teams provide valuation, agency, advisory, management, capital investment, research and building consultancy services across all property types and sectors. Our 2018 Oman Market Report provides an analysis and summary of the residential, office, retail, industrial and hospitality property market sectors, in addition to an overview of upcoming projects, in particular, Integrated Tourism Complex (ITC) developments.
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Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
Oman Market Report
CONTENTS 5
Real Estate Activity
7
Tourism Overview
8
ITC Developments
10
Residential Market Overview
14
Office Market Overview
16
Retail Market Overview
18
Industrial Market Overview
22
Hospitality Market Overview
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2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
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Oman Market Report
Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
R E A L E S TAT E ACTIVITY
“
During 2018, the number of properties issued for GCC citizens increased by 15.3% compared to 2017. However, the total value of property traded in Oman increased by only 1.2% during the same period. In 2018, the government of Oman introduced new measures for economic diversification away from excessive reliance on hydrocarbon reserves. Among these is the Organisational Regulation of Real Estate Investment Funds (REIF) No. 2 of 2018 (REIF Regulations) issued by the Omani Capital Market Authority (CMA), which allows non-Omanis, subject to certain restrictions, to own interests in REIFs and consequently permitted to own real estate in Oman. The introduction of REIFs in Oman is expected to support the growth of the real estate and tourism sectors in the country by facilitating and encouraging the entry of foreign investors. A report issued by the Ministry of Housing’s real estate transactions in November 2018, revealed that the governorate of North Al Batinah witnessed the highest figures in real estate transactions for sales, donations, dividing, deed stampings and inheritance contracts at a governorate level, while Muscat had the highest figures for deeds issued, mortgages and mortgage redemption contracts. According to the Ministry of Housing, the value of real estate transactions reached OMR 2.64 billion in 2018, an increase of 1.2% compared to 2017. Traded value of barter contracts registered the steepest decline of 24.2%, from OMR 21 million in 2017, to OMR 16 million in 2018.
REAL ESTATE ACTIVITY IN OMAN 2017-2018
Key Indicators for Oman’s Real Estate Sector
Q4 2018
January-December
Oct
Nov
Dec
Total
2017
200
160
235
595
2,609
2,641
1.2%
7
5
8
20
79
85
8.1%
88
73
127
288
1,140
1,002
-12.1%
5,142
4,298
4,944
14,384
59,480
58,828
-1.1%
Traded value of mortgage contracts (OMR million)
110
86
107
304
1,448
1,623
12.1%
Number of mortgage contracts
1,394
1,026
1,186
3,606
18,619
16,027
-13.9%
1
1
1
3
21
16
-24.2%
124
94
146
364
1,079
1,527
41.5%
19,838
16,458
19,299
55,595
107
109
81
297
Traded value of property (OMR million) Fees collected for all legal documents (OMR million) Traded value of sales contracts (OMR million) Numbers of sales contracts
Traded value of barter contracts (OMR million) Number of barter contracts Number of properties issued Number of properties issued for GCC nationals
2018
225,468 223,492 1,211
1,396
% Change
-0.9% 15.3%
Source: National Centre for Statistics and Information (NCSI), Statistical Year Book, Ministry of Housing, Cavendish Maxwell 2019 5
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
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Oman Market Report
Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
TOURISM OVERVIEW
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Between 2013 and 2017, GCC nationals accounted for the highest growth in inbound tourists, with a positive CAGR of 16.2%, followed by Europeans with a CAGR of 15.3%. The travel and tourism sector’s contribution to Oman’s Gross Domestic Product (GDP) is forecasted to increase to USD 8.67 billion over the next nine years, representing 8.9% of GDP in 2028, according to the World Travel & Tourism Council (WTTC). According to the National Centre For Statistics and Information (NCSI), the total number of inbound visitors to Oman grew from 1.9 million in 2013 to 3.3 million in 2017, registering a Compound Annual Growth Rate (CAGR) of 14.1%, while outbound visitors grew at a CAGR of 10.3% during the same period. As of November 2018, GCC nationals accounted for 45.3% of visitors, followed by Asians and Europeans, at 21.8% and 20%, respectively. In recent years, Oman has taken steps to boost international tourist arrivals by relaxing its visa restrictions for more nationalities. In October 2017, more nationalities were added to the list of countries whose citizens qualify for unsponsored e-visas. Indians and Russians joined 25 other nationalities who are now eligible to travel to Oman, as long as their passport is valid for six months. Visitors can now also spend up to one month in Oman, as opposed to the prior three-week limitation, as a result of new regulations issued in 2017 on one-year multiple-entry visas. The one-month visa is more expensive than the 10-day visa, however, the new regulation is expected to have a positive impact on the market, as tourists often want to spend more time in the country. The new Muscat International Airport commercially opened to the public in March 2018, with an initial annual capacity of 20 million passengers. As a part of the tourism strategy, the Oman government aims to increase its national carrier, Oman Air’s passenger flow to 39 million by 2030.
HOTEL GUESTS JANUARY-NOVEMBER 2018
-2.8% From 2017
1,005,931
980,627
382,840
369,373
WORLD RANKING (OUT OF 185 COUNTRIES) POTENTIAL FOR TOURISM GROWTH
28
2018
2017 Omani
18
GROWTH 2018 FORECAST
LONG-TERM GROWTH 2018-2028 FORECAST
Non-Omani
Number of inbound tourists
INBOUND TOURISTS IN OMAN BY NATIONALITY 2013-NOVEMBER 2018 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 2013
2014 GCC
Other Arabs
2015
2016 Asians
2017 Europeans
Jan to Nov 2018 Other
Source: NCSI, WTTC, Cavendish Maxwell 2019 *Number of guests, hotel guests and occupancy rates are for the period of January 2018 to November 2018 7
Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
I N T E G R AT E D T O U R I S M COMPLEX (ITC) DEVELOPMENTS
KEY ITC DEVELOPMENTS IN OMAN BY SIZE (SQ M)
Al Nakheel Beach Resort 500,000 sq m
Omagine 1,000,000 sq m
Naseem A’sabah 400,000
Note: Key ITC developments not represented here include Janout Resort in Shlen and Hallaniyat Island (1,000,874 sq m), Salalah Beach Resort in Taqah (12,000,000 sq m), Ras al Hadd in Sur (1,971,823 sq m) and Quriyat Integrated Project in Quriyat (1,282,300 sq m) 8
Al Mouj Muscat 500,000 sq m
Muscat Hills Undisclosed
Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
In 2005, the first Integrated Tourism Complex (ITC) was launched in Oman with the aim of reducing the country’s reliance on oil and to diversify the economy. Under the ITC umbrella, the real estate sector opened up to investment from expatriates, constituting 43.7% of Oman’s total population in 2018. ITCs are freehold mixed-use developments featuring different asset classes including residential, hospitality, retail, leisure and offices. The government grants developers a usufruct right over the development site and once the development is complete, the developer is authorised to dispose of the residential units to third party purchasers, including non-GCC nationals. Under current laws, expatriate owners automatically get residency rights for themselves and their immediate families when they buy property in designated ITC developments. Between 2017 and 2018, the total number of GCC nationals who own real estate properties in Oman increased by 15.3%. This increase is due to multiple reasons, including high returns on real estate investment when compared to other GCC countries, and the desire to own holiday homes in popular tourist spots like Salalah, Masirah Island, and the eastern coastal towns.
Muscat Bay 2,200,000 sq m
Barr Al Jissah 450,000 sq m
Jebel Sifah 6,247,752 sq m
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Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
RESIDENTIAL MARKET OVERVIEW
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Muscat’s residential market continues to be oversupplied with apartment blocks, while there is still a gap for high-quality villas and townhouses. Rental declines continued during 2018 as overall demand remained subdued. The rental sector has remained relatively stable despite declines of 20-25% over the last three years. The pace of decline has slowed and during 2018 there were marginal declines of under 5% for prime stock. Residential property rents and prices continue to decline in Oman and adjust to muted economic growth in 2018. A combination of factors, including readjustment of salaries and job losses in key sectors, as well as new project handovers, continue to impact demand.
OMR 139,000 OMR 136,000 OMR 24,000
OMR 107,000
OMR 23,000 OMR 45,000
Ma’abela OMR 120,000 OMR 121,000
Al Khoudh
The Wave OMR 370,000
Athaiba
OMR 380,000 OMR 123,000
OMR 241,000 OMR 143,000 OMR 130,000 OMR 72,000
Muscat Hills OMR 369,000 OMR 465,000
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OMR 24,000
OMR 283,000 OMR 368,000
Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
RESIDENTIAL MARKET SEGMENTS
LEASING
ALL NATIONALITIES
DOMESTIC SALES INTEGRATED TOURISM COMPLEXES (ITCS)
OMANIS AND GCC NATIONALS
ALL NATIONALITIES
OMR 246,000 OMR 170,000
OMR 150,000
OMR 145,000
OMR 120,000 OMR 85,000
Qurum
Shatti Al Qurum OMR 250,000 OMR 500,000 OMR 55,000 OMR 60,000
OMR 52,000
OMR 43,000
Al Khuwayr
OMR 54,000 OMR 49,000
OMR 156,000
OMR 20,000
Ruwi
OMR 159,000
OMR 135,000 OMR 187,000 OMR 188,000 OMR 230,000
Bausher
OMR 51,000
Madinat Al Sultan Qaboos
OMR 53,000
OMR 52,000
OMR 100,000
ANNUAL PRICE BY BEDROOM LEVEL * Data as of December 2018 Apartment Apartments 1 BR
3 BR
2 BR
4 BR
3 BR
5 BR
OMR 217,000 OMR 123,000
Villa Villas
6 BR Source: Cavendish Maxwell
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Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
RENT PERFORMANCE Continuous declines in rent have given tenants a stronger position to negotiate terms with owners, who are consequently offering better rents and flexible lease terms. Housing demand is moving towards more affordable units, causing a stronger rental decline in premium locations. Tenants prefer to migrate to larger communities, with a broader array of existing infrastructure and amenities offered at better value. Rents and prices are expected to fall further with the addition of upcoming supply, as well as the impact of the ban on expatriate visas for 87 occupations. Improved market activity and recovery in performance will be linked to stable economic conditions and higher oil prices.
OMR 250
OMR 1,200
OMR 250
Al Hail
OMR 200
OMR 670
OMR 300
OMR 120
OMR 420
Ma’abela OMR 270 OMR 400 OMR 450
OMR 1,500
Al Khoudh
OMR 250 OMR 300
The Wave
OMR 450 OMR 550
OMR 150
OMR 500
OMR 600
OMR 800
OMR 520 OMR 440 OMR 340 OMR 250
Athaiba
OMR 1,200 OMR 1,470 OMR 1,770
OMR 540 OMR 810
OMR 900
OMR 1,0
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0
000
Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
ANNUAL RENT BY BEDROOM LEVEL * Data as of December 2018 Villas
Apartments 1 BR
2 BR
2 BR
3 BR
3 BR
4 BR
4 BR
5 BR 6 BR
Source: Cavendish Maxwell
OMR 450 OMR 350
OMR 500
OMR 300
Shatti Al Qurum OMR 1,500
Qurum OMR 700 OMR 800
OMR 550
OMR 200
OMR 400
Madinat Al Sultan Qaboos
OMR 490 OMR 700
Al Khuwayr
OMR 180
Ruwi
OMR 380
OMR 300
OMR 280
OMR 900
OMR 450
OMR 370
OMR 390
OMR 600
OMR 850 OMR 530 OMR 660 OMR 700 OMR 800
OMR 500
OMR 1,100
OMR 410 OMR 330 OMR 250
Bausher OMR 600 OMR 610 OMR 650
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2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
Oman Market Report
OFFICE MARKET OVERVIEW Lower oil prices have negatively impacted Oman’s office market, as hydrocarbon-linked firms are the major source of demand for commercial space. However, as a result of firms downsizing, the demand for business centres increased in 2018 to meet the requirements of companies seeking fitted offices at lower costs. The deteriorating quality of current office stock, along with lack of adequate parking has had a negative impact on offices with grade B/C classifications. Therefore, demand for grade A stock is expected to remain stable and developers can benefit from current market conditions and lower cost per sq m to build. The former Central Business District (CBD) has declined in popularity over the past decade, with many banks and companies moving westward, away from Ruwi. The area is suffering from a lack of comprehensive public transportation and congestion issues continue to grow, creating further pressure on rental rates. Few new businesses entered the market in 2017 and 2018, and as a result, competition is intensifying for existing stock, with instances of flight-to-quality as companies choose to downsize or consolidate their operations. According to ‘Invest Easy’, a Ministry of Commerce and Industry (MOCI) platform, the total number of registered enterprises by legal type decreased at a negative CAGR of 9.2% from 25,560 licenses in 2017, to 21,119 licenses in 2018.
OMR 5
ATHAIBA
OMR 5-6 per sq m/m
SEEB/AIRPORT HEIGHTS OMR 5-7 per sq m/month
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GHALA
OMR 5-6 per sq m/m
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
Oman Market Report
AVERAGE
OFFICE RENTS (By area, in Muscat)
QURUM
OMR 6-7 per sq m/month
RUWI/WATTAYA OMR 3-6 per sq m/month
SHATTI AL QURUM GHUBRAH
OMR 7-9 per sq m/month
5-7 per sq m/month
A
month
AL KHUWAYR/BAUSHER OMR 6-8 per sq m/month
month
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2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
R E TA I L MARKET OVERVIEW
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With considerable new mall supply added over the last 12 months and planned handovers over 2019-2020, in addition to the entry of more international brands, the retail sector in Muscat will be in wait-and-watch mode over the next 1824 months.
SEEB OMR 25-35 per sq m/month
MA’ABELA
OMR 8-15 per sq m/month
AL KHOUDH OMR 15-32 per sq m/month
MAWALEH SOUTH OMR 15-30 per sq m/month
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Oman Market Report
Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
Despite weaker consumer sentiment and declining retail sales due to sluggish market conditions, a significant amount of retail space is being added to existing stock in the country, with a focus on Muscat. In 2018, several new malls entered the market, including Landmark Group’s Oasis Malls in Sohar (33,000 sq m) and Salalah (35,000 sq m). Additionally, Al Araimi Boulevard is expected to open in Q1 2019, featuring 149,000 sq m of retail mall space, including over 10 movie screens, 220 retail stores and 3,000 parking spaces. Other under-construction developments include Mall of Oman, which will feature 350 outlets spread over 137,000 sq m, including a snow park and a Carrefour anchor store. Additionally, Mall of Muscat will include a Snow Village, a cinema complex of 12 screens with 4D cinemas, as well as a hotel offering 100 private suites connected with the main commercial centre. Meanwhile, older retail centres in areas like Qurum continue to fulfil the community’s retail needs. However, redevelopment opportunities are present as the market adjusts and moves into 2020 and beyond. Oman’s retail market, at OMR 1.7 billion (as of September 2018), contributed approximately 7% to the national GDP. In terms of size, this is driven more by population than by consumer spending. However, Oman’s population was relatively high in 2018 at 4.6 million. Other major factors driving Oman’s retail market are an increasing number of tourists, growing awareness of international trends and price point considerations from brand operators. A steady recovery is expected in the retail sector, where long-term fundamentals driven by population growth and a projected increase in disposable income are clear. However, developers and operators must focus on tenant mix and price points as development continues into 2020.
QURUM OMR 15-30 per sq m/month
RUWI OMR 6-12 per sq m/month
SHATTI AL QURUM OMR 8-15 per sq m/month
BAUSHER OMR 25-35 per sq m/month
MALL/GRADE A
RETAIL RENTS (By area, in Muscat)
Note: Turnover rents apply in main malls 17
Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
INDUSTRIAL MARKET OVERVIEW
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The current industrial sector focus is on the Ninth 5-Year Development Plan 2016-2020, which includes developments at Duqm and Sohar ports, presenting opportunities for institutional investors. Sohar Industrial Estate 21,237,225
Buraimi Industrial Estate 5,561,156
10,954,329 16,722,031 319
2,180,236 3,380,920 337
INDUSTRIAL ESTATE DISTRIBUTION Total sq m rented and available by governorate
Total area sq m Rented area sq m
3
Area available for investment/lease sq m Number of exisiting businesses Source: Cavendish Maxwell
Note: Industrial Estates not represented here include Raysut Industrial Estate (with a total area of 3,810,479 sq m) and Al-Mazyunah Industrial Estate (with a total area of 4,500,000 sq m) *Rented area of land is 246,915 sq m; land available for investment/lease is 277,936 sq m
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Nizwa Ind
Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
Name
Year established
Rusayl Industrial Estate
1983
OMR 1 per sq m annually. Common area maintenance service is provided
Chemicals, batteries, electrical and building materials, fiber optic cables, foodstuff, textiles, garments, stationery, paints
Sohar Industrial Estate
1992
OMR 1 per sq m annually. Common area maintenance service is provided
Marble, paper recycling, foodstuff, detergents, leather, furniture, toothpaste, beverages, ice cream, resins, glass, steel bars, engine oil
Raysut Industrial Estate
1992
OMR 1 per sq m annually. Common area maintenance service is provided
School stationery, box files, ice, fish processing, frozen chickens, PVC pipes, steel fabrication, medical supplies, solar heaters, flour, fertilizer
Sur Industrial Estate
1999
OMR 1 per sq m annually. Common area maintenance service is provided
Liquefied natural gas, urea, ammonia, cement bricks and tiles, marble factories, plastic bags, fishing industries, wooden furniture
Nizwa Industrial Estate
1994
OMR 1 per sq m annually
Ceramics, plastics, medical products, plywood, tea packaging, mineral water, water tanks, ferrous casting, oil services, foodstuff
Buraimi Industrial Estate
1998
OMR 1 per sq m annually. Common area aintenance service is provided
Al Mazyunah Industrial Estate
1999
Two types of leasing are available – commercial shops and land. Rent ranges from OMR 0.250OMR 37 per sq m
Undisclosed
Samail Industrial Estate
-
OMR 1 per sq m annually. Common area maintenance service is provided
Undisclosed
Knowledge Oasis Muscat
2003
Office space in the fourth building – OMR 7 per sq m/month (ready-to-invest areas), and OMR 7 per sq m/month for unequipped areas
Technology
Rent (OMR per sq m)
Industries
Furniture, cement, fiberglass, aluminium, food industries, pharmaceuticals, electrical industries, warehouses, workshops, spare parts
256 1,660* 44,109* 814,039
Knowledge Oasis Muscat
259 5,298,500 3,373,500 10,859,175
Rusayl Industrial Estate
Samail Industrial Estate 96
7,315,775
2,639,639
3,092,345
1,912,931
4,484,403
3,079,935
194
ustrial Estate
109 16,980,771 6,680,429 36,100,000
Sur Industrial Estate
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2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
INDUSTRIAL MARKET OVERVIEW Growth of the industrial sector was affected by reduced global prices and weaker consumer sentiment, resulting in reduced spending and companies in heavy industry forced to defer growth and investment programmes. However, following the blockage of trade with Qatar, Oman’s total merchandise exports rose by 30.9% during January to September 2018, compared to the same period in 2017. To encourage industrial investment in Oman, the government has established special economic zones where investors enjoy tax exemptions, trade facilitation, and competitive advantages on imports and customs duties. The country has four free-trade zones: Al-Mazyunah, Sohar, Salalah and Duqm – each at different stages of development and all designed for international companies. Buoyed by strong government support for new Foreign Direct Investment (FDI) initiatives and sustained investment in infrastructure, industrial contributions to GDP are expected to benefit from projects developed in the country’s free-trade zones. Investment in these zones is expected to create additional job opportunities for Omanis and local companies across a wide range of industries, creating strategic industrial hubs not only for Oman, but for all GCC countries. Oman also has nine ‘Industrial Estates’ offering low rental and energy prices, customs duties advantages and five-year corporate tax exemptions. One of the industrial estates in Oman, Knowledge Oasis Muscat, allows 100% foreign ownership for technology companies. The new Khazaen Economic City on the southern expressway, south of Barka, represents the future vision of industrial and logistics in Oman, connecting hubs with northern ports and airports with equivalent zones in Duqm and Salalah in the south. To diversify national income resources and fulfill the objectives of the Ninth 5-Year Development Plan 2016-2020, the government of Oman launched The National Program for Enhancing Economic Diversification (Tanfeedh), aimed at linking strategies of the vital sectors of manufacturing, tourism, transport and logistics, mining and fisheries. Despite the challenging operating environment from the decline in oil prices, the market remains relatively positive, supported by sustained government investment in infrastructure. The government is also aiming to create an even more diversified economic base to boost the GDP contribution of heavy industry, from 18.3% in 2018 to 29% in 2020. Headline industrial rents sit at OMR 3 to 4 per sq m per month. Grade A storage yard space rents range from 500 baisa to OMR 1 per sq m per month.
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Oman Market Report
Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
OMAN FREE ZONES AND INDUSTRY DISTRIBUTION
Incentive
Name
Main Industries
Sohar Free Trade Zone
Metal and steel, food, logistics
Tax exemption for up to 25 years; full exemption of customs duties on goods imported into the free zone and full foreign ownership of the business
The second phase expansion has been planned, developing an area of around 1,000 hectares.
Salalah Free Zone
Chemical and material processing, manufacturing and assembly, logistics
Income tax exemption for up to 30 years, full exemption of customs duties, no minimum capital, full foreign ownership and 10% Omanisation rate
Recently ranked as the fifth best port zone globally, reflecting its strong transport connectivity and developed infrastructure
Al-Mazyunah Free Zone (AMFZ)
Trading, light industry, assistant services
Income tax exemption for up to 30 years, full exemption of customs duties, no minimum capital, full foreign ownership and 10% Omanisation rate.
Yemeni nationals are allowed to work in the zone without visas or work permits
Duqm Special Economic Zone (DSEZ)
Port and the dry dock, fishing port and fisheries industries, industrial areas, logistics services, commercial business centre, tourism area and spas, educational town, filters and petrochemicals complex, new Duqm Town, Duqm Airport
Income tax exemption for up to 30 years; exemption of customs duties on goods imported into the free zone and full foreign ownership of the business
Although initially funded through public investment, the DSEZ is expected to attract large-scale foreign investment, and it is hoped that the town around it will be home to some 100,000 people by 2050
Remarks
Sohar Free Trade Zone
Al-Mazyunah Free Zone (AMFZ) Duqm Special Economic Zone (DSEZ)
Salalah Free Zone
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Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
H O S P I TA L I T Y MARKET OVERVIEW
“
From January to November 2018, Muscat’s three- to five-star hotels welcomed 1.4 million guests with a total revenue of OMR 189 million. There are currently 72 hotels under construction in Oman, amounting to a total of 6,604 rooms. By the end of 2019, 55 of those developments are expected to be completed, adding 4,763 rooms to the Sultanate’s hotel supply. Of the projects launched in 2018 and those expected to be completed in 2019, 12 are one-star hotels, 19 are two-star hotels, 16 are three-star, and five are four-star hotels. An additional three fivestar properties are to be developed at the end of the year. As of November 2018, in terms of guest nationalities, Europeans had the largest share of total hotel guests at 35.2%, followed by Omanis at 27.4% and GCC nationals at 13.4%. Oman is a favorable tourist destination with its heritage, coastline, beachfront and cultural attractions, along with the advantage of being placed as one of the key regional travel hubs. In order to boost tourism, Oman plans to build tourism infrastructure, which commenced with the new Muscat International Airport that opened in March 2018, and the expansion of the airport in Salalah. The main drivers for hotels in Oman include corporate demand, leisure, meetings and conferences, in addition to the Oman Convention and Exhibition Centre (OCEC), which was inaugurated in 2016 to attract a wide range of business travellers from across the globe.
Year to Date Dec 2018 vs Dec 2017
Year-On-Year Dec 2018 Vs Dec 2017
Hotel Sector
Occupancy % 2017
2018
ADR*
% Change From December 2017
2017
2018
Occ †
ADR
LUXURY
72.6
59.2
157.5
177.5
-18.40
12.7
UPPER-UPSCALE
62.3
63.3
54.8
53.8
1.7
-1.75
*Average Daily Rate
Occupancy % 2017 61.1 53.3
% Change From December 2017
2018
2017
2018
Occ
ADR
56.1
124.6
137.8
-8.10
10.6
53.0
51.3
52.3
-0.52
1.90
†Occupancy
8 1 1
Al Seeb 5
Al Khoudh
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ADR
Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
HOTEL GUESTS IN OMAN BY NATIONALITY (AS OF NOVEMBER 2018)
4.21%
7.33%
Europeans 12.41%
35.35%
Omanis GCC Nationals Asians Others
13.45%
Other Arabs
27.26%
2
1
1
Qurum
Shatti Al Qurum
8
10 1 3
8 1
Ghubrah
7
HOTELS IN MUSCAT Madinat Al Sultan Qaboos 1
Al Khuwayr
(as of March 2018) By type 3-star hotels 4-star hotels
Bausher
5-star hotels Hotel apartments
3 7
Source: NCSI, Ministry of Tourism, STR, Cavendish Maxwel
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Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
H O S P I TA L I T Y MARKET OVERVIEW UPCOMING SUPPLY LOCATION
NUMBERS OF ROOMS
COMPANY
BRAND
OPENING YEAR
W Muscat
Muscat - Shatti Al Qurum
279
Starwood Hotels & Resorts
W
2019
InterContinental Muscat Hills
Muscat - Airport Heights
250
IHG
InterContinental
2019
JW Marriott Muscat Convention Center
Muscat - Oman Convention and Exhibition Centre (OCEC) complex
320
Marriott International
JW Marriott
2019
Centro Hotels by Rotana
Muscat
200
Rotana
Centro
2019
Centro Hotels by Rotana
Salalah
200
Rotana
Centro
2019
Centro Hotels by Rotana
Sohar
200
Rotana
Centro
2019
Swiss-Belinn Airport Muscat
Muscat - Seeb
120
Swiss-Belhotel International
Swiss-Belinn
2019
NAMES
Note: This is not a comprehensive list of upcoming hotel projects in Oman
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Oman Market Report
2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
SOHAR
SALALAH
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2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019
Oman Market Report
STRATEGIC CONSULTING & RESEARCH Our consulting and research team includes experienced professionals with international advisory expertise offering customised and localised services. Through them, our clients gain timely access to our knowledgebase, technical expertise and highly skilled individuals, making us the development partner of choice. The team leverages their global expertise to offer tailored advice to clients in the MENA region covering all real estate classes including residential, office, hospitality, education, mixed-use developments, among others. The team partners with developers, investment companies, family offices and the government to deliver actionable development and real estate investment strategies aligned with prevailing and forecasted market conditions. Our reports are used internally for business planning purposes and to satisfy the criteria of external financiers and auditors.
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Disclaimer: The information and analysis contained in this report has been obtained from or is based on information from a variety of sources generally regarded to be reliable and assumptions which are considered reasonable, and which was current at the time of undertaking market research, but no representation is made as to their accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue the indices at any time, for regulatory or other reasons. The report and analysis does not purport to represent a formal valuation of any property interest and must not be construed as such. Such analysis including forward looking statements are opinions and estimates only and are based on a wide range of variables which may not be capable of being determined with accuracy. Variation in any one of these variables can have a material impact on the analysis and we draw your attention to this. Cavendish Maxwell does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this report.
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STRATEGIC CONSULTING & RESEARCH KEY SERVICES MARKET RESEARCH
PORTFOLIO STRATEGY
EDUCATION ADVISORY AND VALUATION
FEASIBILITY STUDIES
DEVELOPMENT RECOMMENDATIONS
PROPERTY DATA
HIGHEST AND BEST USE STUDIES
MARKET ENTRY STRATEGY
ADVISORY SERVICES
SITE ANALYSIS
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