Making waves

By Diana Milne, Editor

Oman may not share the same glitzy reputation as its GCC neighbours but it is slowly emerging as the next tourism and real estate hot spot in the region. Diana Milne meets one of the pioneers behind its transformation, Nick Smith, CEO of The Wave.

“Combined with the natural beauty of the country, the big mountains, the desert and the culture, it is the jewel of Arabia. And we think that will really help to attract more buyers”
-Nick Smith

Artists' impressions of luxury property developments are a familiar sight in the GCC - with each claiming to offer a lifestyle more idyllic than any other. Outside, skyscrapers crowd the skylines of the region's cities as developers clamour to outdo each other with bigger and better towers as they pull out all the stops to attract customers. But, until recently, one corner of the GCC had remained relatively untouched by the property boom - Oman. Although it is just a three-hour drive from the UAE, the country has been insulated from the dramatic changes taking place in the neighbouring country and has retained a strong local flavour. Traditional fishing villages still dot the country's coastline and its roads, many of which wind through spectacular mountain ranges, remain refreshingly free of traffic jams. Gulf neighbours regard the country's capital Muscat as a peaceful weekend retreat, and even though it features a shopping mall, cinema and all the conveniences associated with a modern city - the main attraction remains the traditional covered souq.

The next big thing

These qualities have not escaped the attention of hotel and real estate developers, particularly since 2006 when a law was passed allowing foreigners to buy freehold properties in developments classed as Intergrated Tourism Complexes in Muscat and the Greater Muscat area. Oman is some way behind its Gulf neighbours when it come to the property boom - but already it is being heralded as the next big thing by developers - not least the creators of Oman's first luxury freehold development - The Wave. The project, which has won a string of awards, including Best Luxury Development by Homes Overseas magazine and four CNBC Arabian Property Awards, is being developed jointly by Oman's Waterfront Investments, representing the Government of the Sultanate of Oman, National Investment Funds Company and the UAE's Majid Al-Futtaim group. Situated in the heart of Muscat, it will feature 4000 homes, including apartments, villas and townhouses, two luxury hotels managed by the Kempinski and Fairmont groups, a marina, and a golf course designed by Greg Norman. And while all this may sound like a far cry from Oman's traditional values, The Wave CEO Nick Smith says the developers were determined to create a project in keeping with the more low key ambience of the area: "One of reasons why the project is so successful is because it is built on a human scale rather than being on a frighteningly huge scale. There are no towers. The tallest building is six-storeys high and most of the villas are just two storeys. We have used indigenous plants in the landscaping and worked hard to create a sense of community. Our first residents moved in  and have already shared Christmas and New Years Eve parties here. When they arrived we said the new heart of Muscat had started beating."

Smith says that of the residents that have purchased properties at The Wave, 75 percent are already living in Muscat - showing there is strong demand from the local market for such a development. The development has also attracted strong interest from golfers keen to live a stone's throw from one of the world's best golf courses: "I think the Middle East is becoming a golfing hub particularly in the winter time," he says. "There is one golf course under construction here and we have another one which should be starting construction next year. Both will attract not just property buyers but those that want a two-centre holiday in Dubai and Oman or Abu Dhabi and Oman. Being built around a marina, the development is also designed to attract boat owners."

Survival of the fittest

Not surprisingly, Smith says property sales have slowed down in recent months as a result of the global economic downturn. As a property developer however, he believes the current situation will result in long-term benefits for the industry and is already resulting in more serious long-term buyers of its properties at The Wave: "There is still a lot of interest here and people are still buying, albeit at a slower rate than they were last year. Prices have hardened. I think previously there was a lot of speculation in the market but has now largely disappeared. In other words, what you're getting now is genuine longer-term investors and genuine end users. People actually want to live in the properties they are buying." He goes on to say that the central location of the development has helped to make it attractive to prospective buyers: "The development sits within the boundaries of Muscat and it's just five minutes from the airport and ten minutes away from the major shopping centre." This also means that it has had minimum environmental impact on the surrounding area, he adds: "The fact that we're not stuck on a beach a million miles from anywhere means we don't have to worry too much about our effect on the environment."

The success of the project is also down largely to Oman's emergence as a tourist destination and to the development of property laws making it possible for foreigners to invest in properties in the country. Although the country's tourism industry has developed at a much slower rate than that of the neighbouring UAE, it is rapidly gaining a reputation as a high class holiday destination which was voted among the 10 best world tourist destinations for 2008 by Condé Nast Traveller for the second year running and has attracted several international luxury hotel operators. Also in the pipeline is the expansion of Muscat's airport, which will increase its annual handling capacity from three million passengers to 48 million by 2050. Work on the first phase, which will increase capacity to 12 million passengers will be complete in two years. Work is also underway to increase capacity at Salalah Airport in the south of the country from two million to 10 million passengers a year.

"Oman seems to be on most tour operators' radars now," says Smith. "Combined with the natural beauty of the country, the big mountains, the desert and the culture, it is the jewel of Arabia. And we think those attractions really help to attract more buyers."

Smith hopes the Wave will help tap into the burgeoning tourism industry with the two luxury hotels it will be featuring and a third which is in the planning stages: "The reason why we chose the Kempinski and Fairmont hotels is because they are extremely good five star luxury brands. Kempinski is actually the oldest hotel group in the world and the Fairmont is really well known for its brands, particularly in the US. We think both brands will help to bring in a US market and a European market and will increase links with those parts of the world. They are also new to Oman so their worldwide networks will help to bring additional tourism to the country. In the foreseeable future there will be another hotel but it's much further down the bill programme and we're not anticipating signing that deal for another year or two."

Healthy competition

Oman's emergence as a world-renowned tourist destination means that The Wave's developers could soon face competition from rival projects. Smith says, however, that he welcomes the competition as it can only mean good things for the residents of The Wave: "There have been a few other integrated tourism complexes that have now been given consent. That's of great benefit for us - it means our residents can pop out and use the facilities that are just down the road."

The first phase of The Wave has been finished on target with around 20 of the villas completed and if all goes to plan, another 200 residents will move in next year. The fact that the Wave is coming together and even boasts its own community of residents gives it the edge over similar Gulf developments that remain for now, just artists' impressions, says Smith: "There are a lot of schemes out here that are computer generated and are never really going to happen. Our customers are moving in, it's really happening."

This article was first published in Business Management Middle East in March 2009: www.busmanagementme.com/article/Issue-5/CRM/Making-waves.