Oman Economic Overview

• The Omani economy is on an upward trend with an average GDP growth of 6.6% p.a on the back of crude prices
   

• Under Vision 2020 formulated in 1995, the Government’s focus has been to develop the non-oil sector and hence there has been a policy shift towards economic diversification, privatization of state-owned assets and structural reforms. The tourism sector is a key aspect of this strategy
  
   

• The Government’s sound macroeconomic policy towards creating an increasingly market-friendly economic environment is bearing fruits e.g. the industrial belt in Sohar has been able to attract investments in excess of USD 15 bn over the last few years
   

• Oman is witnessing massive investment in sectors such as power, aluminum, fertilizers, petrochemicals, water etc.

Oman Real-estate overview

• Real estate sector contributes only around 3.8% of the country’s GDP and is still at an infancy stage
   

• Oman’s growing population (especially young demographics), inflow of expatriates, and lack of quality housing has combined to create a large demand for the real estate in the country
   

• With comparative low real estate prices, as compared to the GCC region, Oman offers an attractive real estate market for investment This has led to investments by GCC investors into Oman
   

• The real estate market has seen a positive trend in the lease rentals and property prices over the last 2-3 years. Even after this growth and the correction in the regional markets, Omani real estate is still attractive as compared to its peers

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Integrated tourism projects (ITPS) defining characteristics
 

• With more than 1700 km sea coast, mountains, wadis, forts, etc., Oman offers excellent tourism potential
   

• The creation of ITPs is the Government’s move to promote travel and tourism wherein mixed use facilities like residential, commercial, entertainment, Golf, theme parks etc. are developed at one location
   

• Under an ITP project, the Government enters into a concession agreement with a developer/investor based on a master plan. The Government provides land rights at concessional terms, freehold rights to investors in the residential properties, basic infrastructure facilities like roads, sewage and electricity at the site boundary and facilitation in obtaining various clearances
   

• ITPs offer an attractive exposure at a reasonable price to the real estate market in Oman
   

• On 1 March 2006, Royal Decree 12/2006 dated 19 February 2006 (the Foreign ownership of Lands Law) was published in the Oman Official Gazette. This Royal Decree promulgates the law in respect of the ownership of real estate in integrated tourism complexes in Oman. The FOLL allows a natural or juristic foreign person to acquire constructed properties or plots of land within an Integrated Tourist Complex for the purposes of residential use or investment and also grants a permanent residence visa for such owner.

Overview of the fund

• USD 250 mn, closed ended, 7 year, tax efficient structure
   

• The fund is promoted by the two largest banks in Oman, Bank Muscat and National Bank of Oman, reflecting the ability to manage the entire liability side of any of the projects and sound understanding of local market.
   

• The fund investor profile draws on the most respectable entities in Oman allowing the fund to lean on their relationships within the Government to assist in generating regular flow of ITP deals
  
  
   

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investment rationale

•  Early stage entry : the Omani real estate market is at an early stage of its development as compare to other GCC markets. Omani real estate is reasonably attractive as compared to its peers
   

• Growing sector : The OITPF sub-sector is a sunrise industry in Oman with inherent realizable value on signing of the concession agreement. The Fund is the first of its kind and would have the early mover advantage over other investors. The Government’s support for these projects is a key risk mitigating feature.
   

• Demographic dividend : Over 45% of the Omani population is aged between 20 years and 44 years, and average and median age is 22.4 and 16.6 years. The demographics will therefore drive the need for workspace, leisure and quality residential real estate.
   

• Recent success of an OITPF : Success of the first OITPF in Oman, the Wave would have a catalytic affect on the development of other OITPFs

Investment Strategy

• Participate in the early stage of development in OITPFs and other real estate projects with efficient deal structuring and entry at reasonable discount to market price
   

• Invest in the form of Equity and Quasi Equity instruments in the existing and upcoming OITPF’s and other real estate projects
   

• Jointly work with local/international developers to promote OITPF’s in Oman
   

• jointly work with the Government on the Government promoted OITPFs
   

• Acquire 25-49% stake in the projects alongside developers with strong track record exit from investments either before the retail development or completion of the retail development phase depending on the risk in the Project
  
  
   

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Partnering real estate developers

• Introduction to Omani tourism sector and real estate market;
   

• Access to the land-bank information of the Fund Manager and introduction to land owners;
   

• Ability to fund a range of transaction size by bringing to play co-investment commitments of fund investors;
   

• Assistance as financial partners through financial advisory services, provision of debt capital, mortgage finance and other services for investors.
   

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