Interview: Nasser Al Sheibani
To what extent is oversupply an issue, and what are the trends within the residential segment?
NASSER AL SHEIBANI: Oversupply is not the main issue per se; rather, the issue is the fact that real estate offerings do not correctly suit the market in terms of price points and style. For example, in Oman we are seeing an uptick in both young, married Omani couples and retirees who are looking for residential units in integrated tourism complexes (ITCs). Their respective needs must be matched with products that have the right amenities to reflect the buyer’s lifestyle, in order to appeal to prospective residents. Muscat is expanding and new areas are becoming popular, and as Oman’s population is quite young, we have seen demand in specific areas: younger people are taking up properties in Al Mabela and Bawshar, where significant construction activity and residential units are increasingly popping up.
This further reinforces the fact that real estate products need to be tailored to the market and developers should focus on areas in high demand. There have been increases in residential activity in Sohar and Duqm as well. As the economy grows and evolves, there will be more demand for residential real estate, even in the middle-high-luxury residential market.
How would you assess the progress of Oman’s ITCs?
AL SHEIBANI: ITCs have contributed positively to the real estate sector, and Oman has many ITC projects that are progressing well, particularly in Muscat and Salalah. ITC projects contribute to providing unique property to the market and creating opportunities for investment for non-Omanis. ITCs are set apart from typical real estate projects by their highly advanced approach to placemaking, crafting a complete and balanced community rather than just considering each home or building in isolation.
This more holistic approach – combining residential, commercial, leisure, retail and dining, and tourism facilities – is adding ongoing economic value. Each element within the project supports the others. The buzz created by the leisure options, from shops and restaurants to the beach and marina, attract residents and visitors, who generate footfall for local businesses, and so on. It all works together.
What impact is the proposed foreign ownership law expected to have on the industry?
AL SHEIBANI: It would be good to allow foreigners to own property outside of ITCs, but the rollout of such a policy has to be done in a systematic manner, with particular attention to the social elements. Initially, there should be designated areas in which foreigners would be allowed to own property, based on social factors. Downtown and more central areas would be a good starting point for non-Omanis to own property, as these areas are typically more diverse. This would also ensure we do not see skyrocketing property costs that would price out our youth, given that increased international demand would hike prices. Additionally, we have been working closely with local banks in finding lending solutions for keen investors and non-Omani investors in real estate.
In what ways have Oman’s retail and mixed-use segments shifted in recent years?
AL SHEIBANI: While malls are largely being disrupted by technology, the real potential for the retail segment lies within mixed-use developments that are more integrated with residential units. The Ministry of Housing has rolled out a pilot project to encourage the development of mixed-use buildings, including in rural areas. In the past the government allocated land to citizens, but now the focus is on building mixed-use developments where citizens can acquire property. This could also be an opportunity for small and medium-sized enterprises to start or expand their urban retail businesses in different areas of the country.
