Omran's Newsletter 'Prospects'

October - D

ecember 2015 / A

publication by Om

an Tourism D

evelopment Com

pany

Developing new horizons for a sustainable tomorrow

6 Investing in the future

14Partnering with Omran

20Case study: Saraya Bandar Jissah

3

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. Photography courtesy of Oman Ministry of Tourism & Omran

Developing new horizons for a sustainable tomorrow CONTENTS

4 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

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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.

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.

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

Eng. Ali Al RasbiActing CEO, Omran

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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A concerted drive towards privatization, industrialization, and

economic diversification

Where does Oman stand?

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th

th6918

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

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

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

FDI Inflow 2015: $1.6 billion.2

Why Oman?

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

Political stability

Low company tax rates

Strategically placed ports

Government leased land available at a concessional rate

with good utilities

Geographical location and proximity to Asian and African markets – within 7 to 8 hours of

key destinations in Europe and Asia

Burgeoning transport & logistics sectors -

infrastructure under development includes a 12 million capacity airport and railway

Free trade agreements and favorable foreign

company ownership laws

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Source

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

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

4 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

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

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DemographicsA 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.

4.0m

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.

TRENDS AND OPPORTUNITIES

Source

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

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

Source

6 Oxford Business Group Oman 2015, p201 Map is for illustrative purposes only and should not be used for political and administrative boundaries.

Rural population growth per annum

+0.9%

Sultanate of Oman

Urban population growth per annum

+2.0%

52%

Percentage ofyouth (15-29yrs)

in Omaniworkforce

Projected growth of Omani citizensby 2040

Current populationincluding expatriates

Current Omanipopulation

2015 20452025 2035

2.37m

4.271m

1m

2m

3m

4m

5m

4.0m

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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

12 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

4 & 5 STAR HOTELS IN THE PIPELINE

Real estateStrong 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.

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

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.

Source

10 NCSI Monthly Bulletin June 2015, p26

11 Oxford Business Group Oman 2015, p201

Source 12 Cluttons report for Omran (June 2015)

1.098

2.200

0 billion OMR

June 2014

June 2015

1.50.5 2.0 2.51.0

JW Marriott at OCEC

The Walk at Almouj

Crowne Plaza at OCEC

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“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 DabbousMuriya CEO

“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 GhazaliActing Chief investment Officer - Omran

Voices from the field

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“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 MarriQatari Diar Ras Al Hadd Development Company CEO

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.

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

MEANS OF PARTNERSHIPS

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

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Omran’s joint ventures

Salalah BeachAn 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 inthe 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.

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

Jebal SifahJebel 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

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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Al Baleed ResortA 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.

Ras Al Hadd DevelopmentThe 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

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.

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

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

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Case study

SARAYA BANDAR JISSAHSaraya 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.

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 exclusiveNameer Island zone.

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

a

b

c

d

“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 HosniCEO Saraya Bandar Jissah

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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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