MUSCAT : Poor parking, outdated infrastructure, and the lack of modern amenities are, apparently, pushing companies westward, towards newer developments boasting better facilities and a more contemporary feel. This raises questions about the future of Ruwi and the factors shaping Muscat’s evolving real estate landscape.
To understand the city’s evolving demographics and the factors influencing its real estate trends, The Arabian Stories spoke with property experts from Hamptons International, Savills Oman, and Al Habib & Co – all of who agree that Ruwi is, indeed, experiencing a downturn.
Michael O’ Connell, Head of Research at Hamptons International in Oman, pins the trend on aging infrastructure, as well as on poor parking provisions and a lack of versatility of building floor layouts. “Ruwi’s decline is mainly because of the aging buildings that have lacked investment in terms of refurbishments… and the lack of investment going into new developments,” he states.
This lack of investment is particularly glaring when compared to the significant amount of development on the west side of Muscat, he notes.
Ihsan Kharouf, Head of Savills Oman, affirms that Ruwi has been the traditional heart of the city and the seat of many of the original family conglomerates. However, he points out that there is a shift towards new areas, as evinced by the announcement most major schemes towards the west of the city.
“Granting planning permission for mid-rise buildings in Al Khuwair, Ghala, Ghubra, and Mabela accelerated the offering of affordable units, which further attracted residents from Wadi Kabir and Ruwi,” he maintains.
Several factors are drawing businesses westward. Ian Gladwin, Executive Director of Al Habib & Co, explains that businesses are migrating to new locations with better offerings. “There are still good deals to be secured in the old CBD, but the new developments offer positive and considerable redevelopment opportunities,” he states.
Demographic shifts in Muscat’s residences and offices:
Muscat’s demographics are also shifting westward. O’ Connell points to a study by the National Centre for Statistics and Information, showing a projection of significant growth in Muscat over the last 10 years. “The paradigm shift in demographics is moving away from the traditional locations of Ruwi, Qurum/Shatti Al Qurm. This is more noticeable towards the west side of the city in expanding urban locations such as Al Ghubrah, Al Khuwair, Airport Heights,” he explains.
These locations have seen the emergence of new mixed-use and residential complexes, headquarters, hospitality, shopping malls, and improved public sector infrastructure. “Expansion on the west side of Muscat does not stop just at Al Ghubrah, Al Khuwair but continues even further west towards Al Maabilah, and of course the sprawling 1,480 hectares of undeveloped land designated for Sultan Haitham City or ‘Smart City’ in what will be the Greater Muscat districts,” he adds.
Pointing out that there has been a rapid development of residential areas from 2010 towards the west of the city, especially Al Hail, Al Khoud, and Mabela, Kharouf draws attention to the noticeable shift in offices towards Qurum, Al Khuwair, and Baushar province, with banks and government entities leading the shift.
Gladwin notes that the end users of residential properties are more discerning, requiring add-on ancillary services at more competitive budget rates. The demand, he observes, is mainly for offices of between 200-400sqm. “There has been a lot of downsizing, and businesses are looking at their real estate operations in different ways going forward,” he points out.
Shift from CBD/MBD areas:
Kharouf maintains that this shift is mainly driven by employment areas relocating westwards, which are supported by major investments in new areas, both integrated tourism complexes (ITCs) and non-ITCs. Explaining further, he states: “The two major schemes to the west of the airport underpin the location of the new city direction (Al Mouj and Muscat Hills). While CBD historically suffered from some parking and access issues, these could have been addressed through additional multi-story car-parks and traffic management measures. There has been increased appeal in the new areas due to new infrastructure and a shift in demand drivers.”
Gladwin attributes this shift away from the CBD to businesses opting to migrate westwards towards mid-town and the airport heights.
Reasons for real estate trends:
A recent shift westward is transforming Muscat’s real estate landscape. Industry experts attribute this trend to several key factors:
According to Kharouf, while major development projects in western Muscat created a newer area with newer infrastructure, limited investments in Ruwi appeared to signal a shift in demand.
O’Connell attributes the appeal of western Muscat to the unpopulated areas, availability of land and lower land values; in addition to the new developments in locations such as Al Ghubrah and Al Khuwair offering residents’ modern amenities and higher quality living compared to districts like Ruwi.
Gladwin credits the shift to land availability and proximity to workplaces in the new western suburbs of Al Khoud, Marbella, and Barka.
The Greater Muscat Plan:
Although the Greater Muscat Plan (GMP) contains many promising ideas, its success will depend on public-private collaborations, maintains Kharouf. “We may see investors being reluctant to invest in Ruwi as much of their focus may continue to be on the new areas; however, there are some incentives and initiatives that can be used to attract such investment,” he states.
While old buildings are not versatile to adapt to changing demands, there is also a lack of land availability to expand in Ruwi, opines O’Connell. “One of the key concepts behind the GMP that will shape new developments will be the opportunity to implement modern-day public state-of-the-art services, community and recreational spaces, and infrastructure such as road networks and high-speed rail links for future generations to come,” he states.
Gladwin acknowledges the importance of GMP in providing guidance for investors and users alike. “Once understood by stakeholders and the wider market, it will enable strategic commitments to redevelop older sites as well as developing out new,” he states.
Residential trends away from Ruwi:
Not surprisingly, people are seeking residences away from the Ruwi area as the old residential buildings require a significant amount of renovation/refurbishment, maintains O’Connell. “Most of the buildings are not versatile to change, and rents for new buildings to the west side of Muscat are smarter, built to international standards, are more affordable, competitive, and surrounded by shopping malls, entertainment, and hospitality,” he lists.
Kharouf, however, believes that schools play a key role in the area. “We will see demand continue so long as there are popular schools and some employers based there. This would change if we see a further shift towards the west in the number of major employers currently in the area,” he states.
Emerging housing/office space trends:
“The prestigious Oman Business Gateway project on a Public-Private Partnership (PPP) basis at Airport Heights is one for the future,” opines O’Connell. “This is a site of approximately fifty acres (approx. 200,000 sq m) and will be a combination of private and public sector office occupation in addition to retail, F&B, hospitality. Sultan Haitham City in Al Seeb, Grand Blue City in Barka, Muscat Village (OMRAN) and Yiti Sustainable City are a few new projects to watch out for,” he points out.
Kharouf maintains that affordability and good design are key drivers for both residential and office spaces. “Supply and demand is moving closer to each other, but landlords remain under pressure to offer a wide range of units meeting different price points. Smaller-fitted units remain popular for offices, and well-designed and well-managed residential units focused on smaller family needs continue to be popular,” he adds.
According to Al Habib Property Report 2024, Muscat capital area has recently seen increases in demand from nationals for rentals. This demand has come from younger professional ‘out of town’ employees/professionals who are starting to reside in the city during the working week, before returning to home towns for weekends.
This has resulted in increasing demand for good quality apartments in certain locations in the Capital, including Bausher, Seeb, Mabella, and Al Khoud.
The report also points out that the residential villa market has continued to grow as demand levels for new build and existing stock increase in line with growth in the demographic. Omani families continue to favour villas rather than apartment living, and the new residential areas of Mabella, Al Khoud, Al Ansab, and Falaj Al Sham are seeing evidence of continued growth.
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