HAND IN HAND

Oman 2017 | CONSTRUCTION & REAL ESTATE | INTERVIEW

TBY talks to Rashid Saleem Al Masalti, CEO of National Mass Housing (NMH), on building affordable housing and ways the public and private sectors can work together.

Rashid Saleem Al Masalti
BIOGRAPHY
Rashid Saleem Al Masalti has been the CEO of National Mass Housing since 2013. Prior to that, he was the Director of Business Development of Al Jazeera Investment Company, and from 2008 to 2012 he held different positions in the Al Madina Financial & Investment Company. Al Masalti holds a MBA from University of Strathclyed Business School (Glasgow, 2011) and a diploma in business administration from Modern College of Business & Science (Oman, 2007).

What are the affordable housing residential projects NMH has in its portfolio?

NMH uses the term affordable to refer to the middle-income segment of the housing market, which is the one we target. In Oman, these are people with a monthly income of between USD1,800 and USD5,000. These buyers will need between USD150,000 and USD200,000 to be able to buy a unit or villa. In terms of our projects we have completed Phase I of Areej Residential Community, which comprises 69 units. All units have already been sold up to a maximum of USD170,000, which is a very affordable option for middle-income buyers. Work on Phase II of the project has already begun and this will consist of another 69 units, and we have been very cautious and listened to the feedback from Phase I buyers. We have improved the size of the units from 226-234sqm and have added some services and facilities that are required to create a community, such as a central park, mosque, and so on. NMH has future ambitions to build small towns with a maximum of 200 units. This ensures the inhabitants will have easy access to services and a pleasant lifestyle. While Phase II of Areej Residential Community is already under construction, we are looking at building another project of a similar size that will also target the middle-income segment of the housing market.

How would you assess the current affordable housing options in Muscat?

When we established NMH, we conducted a study across Oman analyzing income per capita and people's housing requirements. The profile of the middle-income homebuyer in Oman is generally someone who has recently graduated from university and just got married or started a job. Most of this segment lives in Muscat; people have migrated from other parts of Oman to the capital, so renting a flat here is expensive. A two-bedroom apartment costs at least USD750-900 per month, and at the end of that property is not theirs. Muscat being a cosmopolitan city does not offer a great deal in terms of affordable housing, owning a house in Muscat generally requires a large amount of investment and the middle-income homebuyer may not be able to afford this. We understand that young couples want to have their own independent space and raise their kids hence what we are offering these people is the opportunity to own their property instead of paying rent. Furthermore, we are giving them a lifestyle where they can raise their family in a peaceful and spacious environment. The land we are buying is just outside the city in order to make it affordable. By doing so, we are ensuring both the quality and the cost when we build. In addition, we are also taking the risk away, as buyers will not have to deal with the building contractor and the hassles of construction. Having said that, we want to implement our projects in Muscat first; then we will study the options for expanding outside Muscat to centers like Duqm or Salalah and other areas all around the Sultanate.

In your view of sustainable development, what role would you like to see the private sector play in Oman within the real estate industry?

The private sector has a big role to play in this regard. Besides decent job creation the private sector can create long-term value in the tourism and real estate sectors. With regards to affordable housing, private-sector companies such as ours can strive to build future communities that bring a place to life and help it to gain its own particular identity. The current economic situation in the country, however, requires the government to join hands with the private sector to achieve this. The cost of land for these types of developments has gone up by 20% and the infrastructure costs by another 20-30%. Therefore, PPPs have to be implemented, with the government providing the land and some of the infrastructure. As a developer, I cannot afford to build 600 units and then wait for the government or someone else to buy them; the government should set up a pilot project whereby it gives land to a developer and tries this type of scheme.