Mixed-use development plans give boost to Omani construction sector

One facet of Oman’s continuing diversification drive is the construction of large, mixed-use developments that combine residential, commercial and office buildings. These spaces are set to support two of the five sectors targeted in the National Programme for Enhancing Economic Diversification, also known as Tanfeedh: tourism and manufacturing. The projects aligned with the tourism sector join residential and holiday properties with leisure and retail facilities, while the mixed-use spaces aimed towards manufacturing include large-scale greenfield works. Driven by a blend of international investment and government backing, the projects are providing a steady pipeline of activity for the construction sector.

Industrial Builds

Perhaps the largest mixed-use project currently under way is the Sino-Oman Industrial City in Duqm. Developed by an Omani-Chinese joint venture named Ningxia China-Arab Wanfang, the project is expected to cost a total of $10.7bn. Architects from Colliers International are designing the master plan of the city, which includes housing, schools, offices, a hospital, a sports centre, a five-star hotel, an oil refinery capable of processing 235,000 barrels per day, a petrochemical complex, a concrete plant, a steel smelter, a glass factory, an aluminium plant and a solar factory. The industrial city broke ground in April 2017, and the group aims to develop 30% of the project in the five years to 2022.

Khazaen Economic City is another major greenfield undertaking. Located near Barka in the Al Batinah North Governorate, about 60 km north of Muscat, the 51m-sq-metre site is envisioned to host industrial, commercial and residential zones, as well as the sultanate’s first dry port for land freight movement. Khazean is a subsidiary of Asyad Group, the holding company for the state’s investments in transport and logistics infrastructure. In March 2018 a joint venture between Oman Investment Corporation and Saudi Arabian engineering contractor Mohammed Ali Al Swailem Group was named the city’s master developer, while a memorandum of understanding was signed in July 2018 with another Asyad Group subsidiary, Marafi, to develop and operate the dry port. Infrastructure development under the project’s first phase will run for the 20 years to 2038 and is forecast to require an investment of approximately OR300m ($779.1m).

Tourism Developments

In the tourism sphere, strong interest from expatriates in purchasing property within integrated tourism complexes (ITCs) is ensuring that the market for newly developed ITCs continues to grow. To meet this demand, in August 2017 the government announced that it planned to invest OR4bn ($10.4bn) in building 5000 new housing units across five ITCs. Additionally, the Oman Tourism Development Company (Omran), established in 2005, is working on two large mixed-use developments in Muscat: the Madinat Al Irfan and the Mina Sultan Qaboos Waterfront. Madinat Al Irfan is a new district being built on a 624-ha site near Muscat International Airport. The eastern part of the area is being developed by Omran and encompasses a multi-use district adjoining the Oman Convention and Exhibition Centre, which opened in October 2016. The district’s western side is under the direction of Dubai-based real estate developer Majid Al Futtaim, following the announcement of an OR5bn ($13bn) joint venture with Omran in June 2018. Set to take approximately 20 years to complete, the first phase is expected to involve infrastructure works for completion by 2023.

The other undertaking planned for the capital is the $1bn Mina Sultan Qaboos Waterfront. This ambitious and extensive project will transform the port area of Muscat’s historic Muttrah district into a tourism-focused, mixed-use space. In June 2017 Omran signed a memorandum of understanding with Dubai’s Damac Properties to develop the master plan, with the state agency expecting initial construction works to give way to full project kick-off in the first quarter of 2019.