Muscat: The hydrocarbon sector alone is expected to result in the relocation of hundreds of families to Muscat and the surrounding areas as gas fields in Khazzan are developed further.
Demand is also being driven by workers in the construction sector, as the government invests in upgrading Muscat International Airport and transport infrastructure projects and improvements, according to a report released by international real estate consultant Cluttons.
Two-bedroom apartments and four-bedroom villas remain the most sought after property type amongst the expatriate community. Sustained tenant demand in key sub-markets has seen the market stabilise and in some circumstances shows signs of strengthening. Monthly rents for four-bedroom villas on the other hand were largely unchanged, noted the Cluttons' Oman Winter Property Market Update report.
The overall impact of the government's heavy investment in the hydrocarbon industry in addition to the aviation sector is resulting in growing levels of both residential and office demand. The former is being underpinned by expatriate workers relocating to Oman to grasp the increasing number of job opportunities.
A shortage in supply of modern stock and facilities is putting upwards pressure on rents, however expatriate accommodation budgets are still well below historic levels and this is sustaining cost conscious tenants. Some landlords in less traditional submarkets are seizing the opportunity to capitalise on void periods and growing demand by refurbishing their properties to attract expatriate tenants.
The report also hints at a trend for office to residential conversions across Muscat, however the legal complications and costs for a change may curtail this.
Like the residential market, the office market is also benefiting from an upturn in occupier requirements, fuelled largely by the government's wide ranging infrastructure investments programme. This has led to a sharp upturn in job creation by the Sultanate's construction and hydrocarbon sectors, as evidenced by increased occupier demand for office space for these segments of the economy, according to the report.
Law firms and banks are contributing to overall demand, but the public sector continues to dominate requirements. Tenants are showing a growing interest in relocating to the emerging 'ministries district' to the south of Muscat International Airport.
The government's wide ranging infrastructure investments are leading to increased job creation, which is expected to underpin future economic growth, and has already led to a rise in confidence levels amongst builders.
Despite the sustained rise in demand for offices, rents have remained at steady levels and they continue to hover between OMR4 per square metre (Central Business District) and OMR8 per square metre (Azaiba) with the exception of Ghubarah (OMR7 per square metre) and Shatti Al Qurum (OMR9 per square metre), where rents are down by 6.7 per cent and 10 per cent.
The report indicates that the government's wide ranging investment programme will provide the manufacturing and industrial sectors with a OMR5 billion cash injection over the next few years, with the funds earmarked for the expansion and upgrade of factories across Oman.
Furthermore, OMR7.7 billion has been allocated towards improving transportation infrastructure including the fast tracking of a single phase rail network.