Omran's Newsletter 'Prospects'

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6 Investing in the future

14 Partnering with Omran

20 Case study: Saraya Bandar Jissah

October - December 2015 / A publication by Oman Tourism Development Company

Developing new horizons for a sustainable tomorrow

Issue 3 October - December 2015

Developing new horizons for a sustainable tomorrow

KNOW HOW . RESPECT . BEYOND

CONTENTS

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In line with Omran’s sustainability policy, the paper we have used for this publication is Lenza Top Recycling Super. It is recycled paper produced of 100 % recovered fibre.

Manufactured without optical brightening agents and chlorine bleaching.

High whiteness is achieved thanks to a special converting process for recovered fibre.

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Investing in the future

6

Where does Oman stand?

7

Why Oman?

12

Voices from the field

14

Partnering with Omran

16

Omran’s joint ventures

20

Case study: Saraya Bandar Jissah

Photography courtesy of Oman Ministry of Tourism & Omran

Issue 3 October - December 2015

Investing in the future Falling oil prices have provided added impetus for the drive towards economic diversification while underscoring the strategic importance for enhanced infrastructure and facilities in the Sultanate.

According to the International Monetary Fund (IMF), oil export losses in the GCC are expected to reach $300 billion or 21% of GDP by the end of 2015.1 Diversification is no longer a luxury, instead it is now a necessity that holds the key to the enduring prosperity of our nation. As such, economic diversification as outlined in the Government’s 2040 vision is a critical priority in the coming years. The rapidly growing tourism sector, with its emergence as a major employment and income generator, forms a key component of this plan.

The responsibility for development lies not only in the hands of the government. Private investment, both from at home and abroad is essential for building the infrastructure we need as a nation to diversify.

For this reason, Omran is increasingly looking to the Public Private Partnership model (PPP) when considering future developments in Oman.

Through this model, the public and private sectors work together to invest in - and share costs - of projects that will ultimately benefit investors and the national economy in the years to come.

For the tourism sector, engaging with local and foreign partners is key to developing world-class destinations.

Partnerships and joint ventures allow investors to capitalise on the great potential Oman has to offer, and at the same time enabling local SMEs to benefit from the international experience and expertise such companies bring to the market.

The tourism sector in Oman holds the potential for sustainable and enduring returns for both developers and the nation at large.

Eng. Ali Al Rasbi Acting CEO, Omran

Factors including political stability, low company tax, geographical location and proximity to Asian and African markets, repatriable profits and capital, and modern transport and logistics infrastructure, make Oman an especially attractive destination for foreign investment.

Source 1 IMF Regional Economic Outlook Update, http://www.imf.org/external/pubs/ft/reo/2015/mcd/eng/pdf/mreo0115.pdf, p6

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Issue 3 October - December 2015

Where does Oman stand?

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th

Ranked 9 out of 141 nations for tourism safety and security according to the World Economic Forum’s Travel and Tourism Competitiveness Report.4 th

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Why Oman?

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FDI Inflow 2015:

Free trade agreements and favorable foreign company ownership laws

$1.6 billion.2 Political stability

Ranked 6th out of 15 countries in the Middle East/ North Africa region and 56th out of 144 countries in the Economic Freedom Index with a score of 66.7 out of 100, higher than the regional and world average of 60.4.3

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th Ranked 18th out of 141 nations for business environment according to the World Economic Forum’s Travel and Tourism Competitiveness Report.5

Source 2 http://www.heritage.org/index/country/oman

Strategically placed ports

Geographical location and proximity to Asian and African markets – within 7 to 8 hours of key destinations in Europe and Asia

A NUMBER OF FACTORS GIVE OMAN GREAT POTENTIAL AS A DESTINATION FOR FOREIGN INVESTMENT.

A concerted drive towards privatization, industrialization, and economic diversification

Government leased land available at a concessional rate with good utilities

Low company tax rates

Burgeoning transport & logistics sectors infrastructure under development includes a 12 million capacity airport and railway

3 http://www.heritage.org/index/country/oman

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Travel and Tourism Competitiveness Report 2015, http://www.mmis.co/News/WEF-TT-2015/report.pdf?utm_source=MMIS+Mailout&utm_campaign=5596dae460-WEF_ Competitiveness_Report_20155_19_2015&utm_medium=email&utm_term=0_23e22f6e6e-5596dae460-112187677&mc_cid=5596dae460&mc_eid=3e2ab91397, p44

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http://reports.weforum.org/travel-and-tourism-competitiveness-report-2015/economy-rankings/

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Issue 3 October - December 2015

TRENDS AND OPPORTUNITIES Urbanization

Oman is experiencing rapid urbanization. The population of rural areas is growing at 0.9% per annum while the urban population is increasing at over 2%.6 Shifting demographics change the way people live, shop and conduct business and in turn provides new investment opportunities across a myriad of sectors including retail, real estate and hospitality.

Rural population growth per annum

Urban population growth per annum

+2.0%

Demographics

A notable demographic trend is a growing citizen population. The current population of the Sultanate including expatriates is over 4.271 million.7 The population of Omani citizens is projected to reach 4 million up from the current 2.37 million by 2040.8 The population of Omani youth (15-29yrs) currently stands at 710,454,9 comprising 52% of the Omani workforce.

5m

4.271m

4.0m 4.0m

Sultanate of Oman

Projected growth of Omani citizens by 2040

3m

2.37m

+0.9%

52%

4m

Current population including expatriates

Percentage of youth (15-29yrs) in Omani workforce

2m

Current Omani population

1m

2015

2025

2035

2045

Source Source 6

8

Oxford Business Group Oman 2015, p201

Map is for illustrative purposes only and should not be used for political and administrative boundaries.

7

https://www.ncsi.gov.om/Pages/NCSI.aspx

8

http://www.muscatdaily.com/Archive/Oman/Omani-population-likely-to-reach-4mn-by-2040-projects-NCSI-47bs

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https://www.ncsi.gov.om/Elibrary/LibraryContentDoc/bar_Demographic%20indicators%20and%20vitality%20_9916255f-1dd1-4550-b140-e1d8f49cf651.pdf 9

Issue 3 October - December 2015

4 & 5 STAR HOTELS IN THE PIPELINE

Real estate

Strong growth has been reflected in the real estate market, with the total traded value of real estate activities recorded until the end of June 2015 reached OMR 2.2 billion, up 45.9%, compared with figures recorded during the same period of 2014.

2.200

June 2015 1.098

June 2014 0 billion OMR

0.5

1.0

1.5

2.0

2.5

In terms of retail real estate opportunities, Muscat alone boasts 16 shopping malls with a number of projects currently under development including Panorama Mall and the Mall of Oman.

The Walk at Almouj

JW Marriott at OCEC

Source 10

NCSI Monthly Bulletin June 2015, p26

11 Oxford Business Group Oman 2015, p201

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Real estate hospitality is also developing at pace with a number of new hotels due to open by 2017, including the upcoming JW Marriott and Crowne Plaza at the Oman Convention and Exhibition Centre.

Crowne Plaza at OCEC

Source 12 Cluttons report for Omran (June 2015)

Hotel

Location

Star Rating

Keys

1

Radisson Blu

Sohar

4 star

178

2

Kempinski Hotel (Almouj)

Muscat

5 star

309

3

Copthorne Hotel

Muscat

4 star

180

4

Somerset

Muscat

Serviced Residences

285

5

Grand Millennium Hotel

Muscat

5 star

328

6

Coral Plaza

Muscat

Hotel Apartments

88

7

Sundus Rotana

Muscat

4 star

245

8

Jumeirah - 2 hotels (Saraya BJ)

Muscat

5 star

318

9

W Resort

Muscat

5 star

290

10

Fairmont (Almouj)

Muscat

5 star

300

11

Village Plaza Hotel

Muscat

4 star

190

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InterContinental Hotel (Muscat Hills)

Muscat

5 star

250

13

JW Marriot (OCEC)

Muscat

5 star

300

14

Crowne Plaza (OCEC)

Muscat

4 star

300

15

4 star hotel (OCEC)

Muscat

4 star

250

16

Serviced Apartment (OCEC)

Muscat

Serviced Apartment

150

17

3 star hotel (OCEC)

Muscat

3 star

200

18

Sodah Resort (Sodah)

Sodah Island

5 star

32

19

Anantara Hotel

Jabal Akhdar

5 star

115

20

Anantara Resort

Salalah

5 star

136

21

Agarwood (Millennium & Copthorne)

Salalah

4/5 star

286

22

Shaza Salalah

Salalah

4 star

280

23

Alila Salalah

Salalah

5 star

120 11

Issue 3 October - December 2015

Voices from the field “Jebel Sifah is an inspired community in an unrivalled location that promises to create new lifestyle experiences. Muriya Tourism Development is building a diversified destination, crafted as a contemporary expression of Oman’s ancient heritage and vibrant culture, while reflecting the stunning local surroundings. Whether selling properties, welcoming visitors and tourists to the Sifawy Boutique Hotel or introducing new leisure facilities, Jebel Sifah attracts long term investments to Oman and provides rewarding career opportunities for the local community.”

Ahmed H Dabbous Muriya CEO

“Ras Al Hadd Development represents a new model of joint venture projects in the Sultanate.

The development will offer more than accommodation and leisure facilities, instead providing guests and residents with distinctive natural and cultural experiences.”

“The Sultanate’s unique tourism offerings coupled with the Government’s focus on building and promoting travel and tourism provides significant investment opportunities within the sector. Together with our partner Omran, we are excited to be embarking on a project that marks a new era for developments, one that provides a holistic approach to holidaying and living while making the most of the natural treasures Oman has to offer.”

Hamad al Marri Qatari Diar Ras Al Hadd Development Company CEO

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“Oman, and in particular the expanding tourism sector, provides a plethora of investment opportunities.

Travel and tourism is one of the fastest growing sectors in Oman, with rising numbers of visitors arriving to Oman’s shores every year.”

“Omran invites international partners to join hands on large-scale projects, and tourism development - infrastructure that will accommodate visitors and ensure the Sultanate has the ability to capitalise on its growing position as one of the premier destinations in the region.”

Salah Al Ghazali Acting Chief investment Officer - Omran

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Issue 3 October - December 2015

Partnering with Omran Omran is tasked with driving the investment, growth and development of the rapidly growing tourism sector in the Sultanate of Oman. As the leading executive arm of the government for tourism development, Omran has a proven track record of delivering tourism and related projects to a world-class standard, due to the core philosophy of sustainability, transparency and partnering with renowned regional and international investors.

Partnerships form a key component of Omran’s business model. As such, the Public Private Partnership model (PPP) is an important focus for Omran when considering future projects. Currently, Omran collaborates with leading international developers to build iconic destinations and in doing so create healthy social and economic returns for partners and the residents of Oman.

MEANS OF PARTNERSHIPS 1

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3

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Ownership stake in existing operating Omran assets

Joint development on serviced land provided by Omran

Single asset developments within Omran’s master developments

Joint ventures on large scale integrated tourism schemes

AS THE SULTANATE’S MASTER DEVELOPER, OMRAN INVITES PRIVATE SECTOR TO PARTICIPATE AND PLAY A VITAL ROLE IN ENHANCING THE NATIONAL WEALTH.

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Issue 3 October - December 2015

Omran’s joint ventures Salalah Beach

An Orascom-Omran 70-30 percent joint venture, Salalah Beach is an integrated tourism complex comprising 1150 high-end luxury freehold apartments and villas, shopping and retail outlets, four hotels, a PGA-standard golf course and a 200-berth inland marina.

The Juweira Boutique Hotel is now operational and has been witnessing good occupancy, while the Rotana hotel, the largest in the Sultanate, was also opened in early 2014. Al Fanar Hotel and Residences, the third luxury hotel to be added to the precinct, is set to be completed in coming months.

Jebal Sifah

Jebel Sifah is a 6.2 million square metre Integrated Tourism Complex developed by Muriya Tourism Development Company, an Omran-Orascom joint venture.

The development encompasses a number of hotels and villas as well as retail outlets and a 200-berth in-land marina.

Hotels: Sifawy Boutique Hotel Keys: 94 Recreational features: PGA-standard golf course, marina, retail outlets

Hotel: Juweira Boutique Hotel, Rotana Hotel, Al Fanar Hotel and Residences Keys: Rotana: 399

Al Fanar: 220 Juweira: 65

Recreational features: Water Park, PGA-standard golf course, marina, retail outlet

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The official opening of both the Sifawy Boutique Hotel and Marina was held on May 1st 2012 and the hotel has received acclaim and good occupancy since this time. The latest addition to Jebel Sifah is a Harradine signature 18-hole PGA standard golf course.

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Issue 3 October - December 2015

Ras Al Hadd Development

The eco-themed project, located in Ras Al Hadd in the Governorate of Al Sharqiyah, is a joint venture between Omran (30%) and the Qatari Diar Group (70%). The project, located near a key nesting ground for the Green Turtle, delivers a number of unique tourist attractions within the master plan, including a wildlife conservation and observation park, a marine life park, and a heritage village. The development has significant growth potential as a destination for local, regional and international tourists to discover the stunning

Phase 1: • 100 room eco-themed resort • 50 hotel villas, • 150 residential villas Phase 2: • 100 5 Star hotel rooms to the resort • 196 residential villas, Phase 3: • 200 room 5 Star Resort • 50 hotel villas • 179 residential villas

wildlife of the region, and to experience the history and hospitality of Omani culture.

The development, with a total budget of close to OMR 100 million, is considered a fast track project with a total duration of 4 years for completion. It is anticipated that the project will provide many development and job opportunities for Ras Al Hadd and the Al Sharqiyah South Governorate.

Al Baleed Resort

A 50-50 joint venture between Omran and Musstir, Al Baleed Resort will provide visitors with easy access and comfortable accommodation adjacent to the ruins of the ancient port city of Al Baleed, an archaeological treasure and UNESCO World Heritage site. The hotel, due to be completed in Q3 2016, will be composed of private chalets, recreation facilities, spa, food & beverage outlets; themed restaurants and function areas. The resort will help to further develop the tourism potential of the Dhofar region and will complement the archeological site, the Museum of the Frankincense Land, in addition to numerous hospitality offerings under development in the area.

As of August 2015 the resort is 63.4% complete.

Hotel: Al Baleed Resort Hotel Keys: 106 Chalets

Recreational features: food and beverage outlets, specialty restaurant, function facilities

Duqm Frontier Town

Duqm Development Company SAOC (DDC), a 50-50 joint venture between OMRAN and Oman Drydock Company to develop and grow the Duqm Frontier Town.

The project will deliver residential units, shops and many other facilities in the fast developing Duqm dry dock area. Work on phase two of the project has been progressing steadily with planning for the construction of a Hypermarket well underway, while an MoU has been signed with Iskan Oman Investment Company to create a joint venture to establish a new health care facility. The MoU also involves leasing an education facility from Duqm Development Company for a proposed K-12 international school within the precinct.

Recently Duqm Development Company signed a contract with AECOM to develop the Feasibility Study, Master Plan and Detail Design for Duqm Frontier Town Phase II. AECOM is now in the process of finalizing the Concept Master and Feasibility Study.

Phase 4: • 150 room 5 Star Hotel • 50 hotel villas • 175 new residential villas

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Issue 3 October - December 2015

a

Case study SARAYA BANDAR JISSAH

b

Saraya Bandar Jissah, the Sultanate’s newest luxurious Integrated Tourism Complex is rapidly taking shape. The development, nestled in a valley between the Hajar Mountains just a short drive from Muscat, is a 50-50 joint venture between Omran and Saraya Oman, a subsidiary of the international developer Saraya Holdings.

Spanning a 2.2 sq km area, Saraya Bandar Jissah will offer high-end housing units, recreational facilities and two beachfront luxury hotels operated by the Dubai based luxury hotel chain Jumeriah Group. The unique mixed-use development will be home to 398 exclusive residential units, including spacious hilltop villas, stylish townhouses and luxury apartments spread over five zones: Wajd, Nameer, Zaha, Na’eem and Safa.

c

The project was also recently voted the World’s Best Mixed Use Development at the International Property Awards, showcasing the talent and expertise on offer in Oman.

Recently, Saraya Bandar Jissah announced the sale of 33 villas in the exclusive Nameer Island zone.

“Collectively, all the Integrated Tourism Complexes in the Sultanate offer different themes, but all now focus on lifestyle and community experiences as their top priority. Saraya Bandar Jissah will very much be a haven for residents, given the spacious and wide-open spaces design theme of the development. As a location surrounded by stunning natural beauty, it is a place to escape and relax.”

“As the only Integrated Tourism Complex launched since 2007, Saraya Bandar Jissah will be a benchmark for other tourism development projects. We believe that becoming successful in the market will encourage other developers, both outside and inside Oman, to invest in this potentially lucrative sector.”

Sheikh Hamood bin Sultan Al Hosni CEO Saraya Bandar Jissah

d

Images / a. Nameer Villa b. Wajd Residences c. Zaha Properties d. Sea View masterplan 20

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Omran’s role extends beyond that of a master developer. We also act as a catalyst for attracting and enabling national and international investors to take part in bringing our unique projects to life. In recent times, we have noticed an increasing appetite from investors to become involved in the nation’s rapidly growing tourism sector. Investors in the Sultanate are increasingly looking to position themselves in the tourism and urban development sectors due to the solid year-on-year gains shown across all indicators. Omran’s wide-ranging development portfolio is attracting local and international investors who are looking towards sustainable investment opportunities that provide healthy long-term returns.

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KNOW HOW . RESPECT . BEYOND

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