Few sectors have as central an impact, or are as transparent a measure of, the overall economy of a nation, as real estate. The performance statistics of the industry are usually an insightful indicator of purchasing power and the ease with which loans are being extended by financial institutions. In addition, a snapshot of real estate is an equally good measure of the health of the investor and manufacturing arms of an economy.

Following the post 2014 slump in crude oil and natural gas prices, the Sultanate of Oman has been forced to cut government spending on several occasions, because of a burgeoning fiscal deficit. These cuts have been further exacerbated by the COVID-19 pandemic⁽¹⁾. As expected, such cuts have a deflationary effect on public payrolls and jobs – a key driver of real estate demand. To offset these trends, the Sultanate of Oman has introduced several proactive measures, which aim to reinvigorate the nation’s real estate market.

Increasing transparency to boost investor confidence

Faced with the prospect of a sluggish real estate sector, the government of the Sultanate of Oman has taken several steps that are beginning to create positive outcomes. For instance, in the first quarter of 2017, 100% foreign owned entities were allowed to acquire usufruct rights to properties⁽²⁾. Around the same time, The Oman Real Estate Association lobbied for the creation of a real estate pricing index, which would provide investors a contextualized view of current prices, as well as the transaction histories of particular properties.

Following a series of regulatory reforms in recent years, The Real Estate Registry Secretariat, at Oman’s Ministry of Housing and Urban Planning, has recently announced that it will sign multiple contracts with stakeholders in the real estate brokerage sector, to establish indicative pricing of land and properties, every six months⁽³⁾. The initiative represents a focus on increasing market transparency, to give prospective investors – both within Oman and beyond its borders – greater confidence in settling on particular property purchase prices.

Launching Oman’s biggest ever REIT fund

The announcement by the Ministry of Housing and Urban Planning is not an isolated event. A large percentage of the population of the Sultanate of Oman is less than 25 years old. In conjunction with ongoing reforms, this represents the basis for virtually assured growth in demand, which can be leveraged to attract investment in the real estate sector. In the last few weeks, the Sultanate of Oman’s Capital Market Authority (CMA) has approved the prospectus of an Oman REIT Fund, as part of the Tanfeedh economic diversification initiative⁽⁴⁾.

According to sources cited by Bloomberg Quint, the Oman REIT Fund is aiming for a valuation of at least $170 million, and has plans to issue an annual dividend yield of about 7%⁽⁵⁾. As investors around the world look for assured returns, within the generally economically depressed global markets, the Oman REIT represents an attractive opportunity. It is in this context, that the Oman Real Estate Registry’s announcement should be seen. Verified and officially sanctioned valuation will play a huge role in bolstering investor confidence, and boosting the numbers and cumulative value of real estate transactions, in Oman.

1. https://gulfnews.com/business/oman-to-cut-2020-spending-by-further-5-1.1589369567403
2. https://www.tamimi.com/law-update-articles/foreigners-right-to-own-real-estate-in-oman/  
3. https://www.timesofoman.com/article/announcement-issued-regarding-real-estate-valuation  
4. https://timesofoman.com/article/cma-approves-prospectus-of-oman-real-estate-fund