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01 June 2016
Muscat - While lower government spending, higher interest rates and the general economic slowdown unleashed by the international oil price downturn are having a negative impact on Oman's real estate, the long-term outlook for the sector remains sound. This was the consensus emerging from a debate on the prognosis for the Sultanate's real estate industry organised as part of the 1st Real Estate Forum held earlier this week at Crowne Plaza Muscat.
The panel discussion saw four key industry leaders -- Salah bin Salim al Ghazali, Chief Investment Officer -- Omran; Hisham Moussa, CEO -- Alargan Towell Investment Co; Phil Taylor, Managing Director -- Team Leisure LLC; and Vikram Loomba, Director -- PwC Middle East -- articulating their thoughts on the challenges and opportunities surrounding Oman's real estate sector. The moderator was Hassan Mohammed Juma, Vice-Chairman of Oman Real Estate Association (ORA).
Al Ghazali of Omran acknowledged that the economic downturn brought on by low oil prices was having an impact on the residential and hospitality segments of the sector. Reduced government expenditure, higher lending costs, corporate downsizing, and waning investment appetite were contributory factors as well.
But he stressed that projects set around a good concept, location and product offering are bound to succeed even in a tough market environment. Omran's flagship projects -- Madinat Al Irfan and Port Sultan Qaboos Waterfront Investment schemes -- exemplify initiatives that have the potential to be success stories even in a challenging market, he noted.
According to Alargan Towell's Hisham, real estate developers currently find themselves in a "wait and see" mode as they ponder investment opportunities in the economic environment. Residential retail sales, while marginally lower in comparison with previous trends, are still "encouraging", he said, while expressing the hope that the recent uptick in oil prices would be sustained enough to aid the recovery of the real estate sector.
"We had good sales results early on this year, although there was a slight decline in numbers which is only a normal reaction to the current market sentiment. This is why the market needs positive inputs from people in the real estate business. The government also needs to send out positive messages to boost the real estate market, which is really a good investment opportunity," he remarked. Offering his take on the market outlook, Vikram Loomba of PwC said the Sultanate should consider diversifying its tourist offering to broaden its tourism market, which would bode well for the growth of the real estate industry. Despite the downturn, the core underlying strengths of the sector are still largely intact, he noted, while urging the industry to take a long-term view when investing in this key economic segment.
Phil Taylor of Team Leisure said Oman must capitalise on its "amazing natural assets" characterised by its unique mountain landscapes, wadis and other attributes to grow the tourism industry and thereby drive the growth of the real estate sector. He voiced strong optimism that Oman would to grow and evolve notwithstanding the current economic challenges.
Muscat - While lower government spending, higher interest rates and the general economic slowdown unleashed by the international oil price downturn are having a negative impact on Oman's real estate, the long-term outlook for the sector remains sound. This was the consensus emerging from a debate on the prognosis for the Sultanate's real estate industry organised as part of the 1st Real Estate Forum held earlier this week at Crowne Plaza Muscat.
The panel discussion saw four key industry leaders -- Salah bin Salim al Ghazali, Chief Investment Officer -- Omran; Hisham Moussa, CEO -- Alargan Towell Investment Co; Phil Taylor, Managing Director -- Team Leisure LLC; and Vikram Loomba, Director -- PwC Middle East -- articulating their thoughts on the challenges and opportunities surrounding Oman's real estate sector. The moderator was Hassan Mohammed Juma, Vice-Chairman of Oman Real Estate Association (ORA).
Al Ghazali of Omran acknowledged that the economic downturn brought on by low oil prices was having an impact on the residential and hospitality segments of the sector. Reduced government expenditure, higher lending costs, corporate downsizing, and waning investment appetite were contributory factors as well.
But he stressed that projects set around a good concept, location and product offering are bound to succeed even in a tough market environment. Omran's flagship projects -- Madinat Al Irfan and Port Sultan Qaboos Waterfront Investment schemes -- exemplify initiatives that have the potential to be success stories even in a challenging market, he noted.
According to Alargan Towell's Hisham, real estate developers currently find themselves in a "wait and see" mode as they ponder investment opportunities in the economic environment. Residential retail sales, while marginally lower in comparison with previous trends, are still "encouraging", he said, while expressing the hope that the recent uptick in oil prices would be sustained enough to aid the recovery of the real estate sector.
"We had good sales results early on this year, although there was a slight decline in numbers which is only a normal reaction to the current market sentiment. This is why the market needs positive inputs from people in the real estate business. The government also needs to send out positive messages to boost the real estate market, which is really a good investment opportunity," he remarked. Offering his take on the market outlook, Vikram Loomba of PwC said the Sultanate should consider diversifying its tourist offering to broaden its tourism market, which would bode well for the growth of the real estate industry. Despite the downturn, the core underlying strengths of the sector are still largely intact, he noted, while urging the industry to take a long-term view when investing in this key economic segment.
Phil Taylor of Team Leisure said Oman must capitalise on its "amazing natural assets" characterised by its unique mountain landscapes, wadis and other attributes to grow the tourism industry and thereby drive the growth of the real estate sector. He voiced strong optimism that Oman would to grow and evolve notwithstanding the current economic challenges.
© Oman Daily Observer 2016
