HOMES OF YOUR DREAMS

Oman 2016 | CONSTRUCTION & REAL ESTATE | FOCUS: ITCS

The popularity of the Integrated Tourism Complex (ITC) model has now spread, supporting real estate development throughout Oman.

Like the tourism sector, Oman's real estate successfully caters to the high-end demographic. A major part of this is due to the rise of the Integrated Tourism Complexes (ITCs) that have gained popularity among Omanis and expatriates alike. Success in Muscat has ensured that the idea has spread throughout Oman, covering the country's potential for real estate and increasing the demand for potential buyers.

According to the Ministry of Tourism, there are currently 13 ITCs in Oman that are either operational or in development. Al Mouj Muscat is one of the more famous ones, while Saraya Bandar Jissah, set to open in 2017, is catching the eye. Further afield, the new project at Ras Al Hadd will provide a new location for buyers near Sur, while Salalah Beach Resort is already attracting buyers to the increasingly popular tourist and business city.

The ITC model is attractive for a number of reasons. The pristine layout, combined with tranquility, is initially appealing, while families can feel secure in a private and safe environment. The design of many of the projects also encourages a community feel, with shared entertainment and retail facilities. According to a May 2015 report by Cluttons, the leading real estate developer and consultant in Oman, ITCs “continue to attract investors through their capital-gains potential, attractive residential yields, and community lifestyle offerings." Corporate buyers have also seen the potential as is demonstrated by Bank Muscat and Al Mouj Muscat's MoU to develop a property portfolio with a combined investment of OMR75 million.

It is the housing, however, that boosts each ITC. Recently-released CGI images of luxurious Saraya Bandar Jissah properties will make buyers restless to see the details for themselves. At Al Mouj Muscat, new properties continue to upgrade the facilities. David Stafford, Vice President of Marketing and Sales for Al Mouj Muscat, told TBY that the recent additions were redefining Al Mouj Muscat as a real estate location. Looking ahead to 2016, will be “the launch of a new premium product, not only the Zenara beach front villas, but also the release of the most premium land-holding, the Juma Precinct on the eastern arm of the marina." The ITC style ensures that luxury is continually enhanced to meet the high-end demand.

The ITC model might, however, need some altering. Although it continues to bring in a high level of investment, non-ITC properties continue to be popular for both Omani and Gulf buyers. Companies such as Zain and National Mass Housing have also started to offer much needed affordable housing. Although the target demographic is different from the ITC model, non-ITC competitors are growing in numbers. The Cluttons report also mentioned that some complexes are disadvantaged by their limited access to schools, meaning that potential family buyers are attracted to alternative locations.

This kind of issue is particularly pertinent when considering the ITCs being developed outside of Muscat. Saraya Bandar Jissah's location is even further from the center of Muscat than Al Mouj Muscat, which may also discourage family buyers. Salalah Beach Resort, by Muriya Tourism Development Company, has become increasingly popular as part of Salalah's seasonal tourism attraction, but the year-round demand is still lacking. The resort in Ras Al Hadd, although ideally located near Sur and on the coast, will also face an uphill task as less well-known locations could see less demand.

The long-term health of ITCs may be somewhat uncertain, but its current popularity and countrywide developments suggest that there is still confidence in the market. However, with Dubai as a comparison, it is clear that marketing in Oman needs a boost. Lessons can be learned from the widely successful advertising that has seen Dubai's real estate sector attract buyers from around the world. Luxury is one of the great strengths of the ITC model, and a stronger promotional element should allow it to remain an important part of the real estate industry.