2018 Oman Market Report A Year In Review

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

3

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: NCSI, The World Travel & Tourism Council (WTTC), Cavendish Maxwell 2019 *Number of guests, hotel guests and occupancy rates are for the period of January 2018 to November 2018 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

“

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

2017

WORLD RANKING (OUT OF 185 COUNTRIES) POTENTIAL FOR TOURISM GROWTH

28

2018

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

OMANIS AND GCC NATIONALS

INTEGRATED TOURISM COMPLEXES (ITCS)

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

12

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

“

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

2018 - A YEAR IN REVIEW AND LOOKING AHEAD TO 2019

Oman Market Report

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

“

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

22

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

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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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