There has been a definite upturn in confidence in the real estate market, recently. This has led, in turn, to a steady increase in capital values and renewed interest in property as an investment, says Benjamin Cullum, General Manager, Hamptons Oman. Excerpts from an interview with Muhammed Nafie.
|Can you give us a brief on Hamptons International’s operation in Oman?
Hamptons International is a property services company. Its global reach is extensive, although its primary market remains the UK where it started life in 1869. Hamptons International commenced operations in Oman in mid 2000, spotting a gap in the market for quality real estate advisory services. Although much has happened within the business and particularly within Oman since then, our core business lines have not really changed – we have five divisions: sales; leasing; valuations; strategic consultancy; and property management. This consistency is key to our past successes: as the Oman market has grown in sophistication over the past 14 years, our clients have required core advice in these areas of the real estate market and keep choosing Hamptons as their go-to consultants for all their real estate needs. On the back of our success as a business in Muscat, we opened a branch office in Salalah in 2007. We remain the only international property company with a base in the Dhofar region. We see Salalah as a really important market for us in the coming years. What I think we are proud of as a business in Oman is that we have built a really strong team of expatriates and Omanis giving us a good blend of international and local experience. I believe this is what our clients respond to and why they keep coming back.
How was your performance during the last year? And what are the major milestones?
With consistent improvement in global economic conditions throughout 2013, the real estate market saw a gradual increase in demand and investment. As a company we noticed the same in our lines of service resulting in an excellent year for us. Transactional levels for sales remain lower than historic peaks, although there has been a noticeable upswing over the past 12 months. The leasing market picked up on the back of this as the population of Muscat continues to grow and age; the demand is therefore a fairly constant factor. In general, the market in Oman is growing in sophistication rapidly; as such, the desire for professional advice is also increasing. This was evidenced by the growth both in instructions for our valuation and consultancy arms and also from the number of property management instructions we receive. I believe that this will continue and is therefore a considerable focus of ours.
How is the real estate industry shaping up in Oman?
The real estate market in Oman is undergoing significant change, primarily as a result of the general economic growth in the country. The Sultanate has worked at creating the right climate for new investments by developing a free, competitive economy with equal opportunities for all, and shaping laws and regulations that encourage enterprise.
It is clear that the real estate market in Oman was affected in the same ways as many others in the region and globally over the last five years. However Oman’s innate conservatism has meant that the negative impacts of the global financial crisis were not as deeply felt as other regional countries, it has also led to a fairly stable growth pattern over the last couple of years.
As the general economy has steadily grown, some infrastructure projects are completing, others are under construction or have recently commenced, corporates are reporting good profit growth, the population continues to swell, so too, in recent months there has been a definite upturn in confidence within the real estate market. This has led, in turn, to a steady increase in capital values and renewed interest in property as an investment.
What are the major challenges facing the sector now?
There are of course several challenges ahead for the Sultanate’s real estate market, the biggest of which, like many of the GCC countries, is going to be the provision of affordable housing to its young population. Of course, as a real estate professional, I consider the challenge more of an opportunity than a potential problem going forward.
How is the competition in the market? Where do you position yourself in different segments?
There’s no denying that the real estate industry is competitive. Our competitive advantage lies in our team.
I am extremely proud of our team; we have a great mix of skilled expatriate and Omani employees, bringing international and local expertise together. In comparison to the market, our employee retention levels are very good and this tends to mean that our clients keep returning to us as there is a substantial body of retained knowledge within the company.
The team is adept at combining this knowledge, its varied experience and considerable expertise to look beyond individual client’s demands to discover possibilities where others see obstacles, and produce desired results with an exceptionally high degree of diligence and flexibility.
Do you think the market is well regulated?
Regulation of any market is a key driver of investment. The relatively straightforward regulatory framework in Oman has attracted investment into the country in the past and has been supported by the honesty and integrity of Omanis. As we continue to emerge from the global financial crisis, it is clear that a more complex regulatory framework is sought by investors. The Sultanate is in a strong position to further mould its regulations by using the experiences of its neighbours, particularly the UAE, and adopting elements which work and amending those which are falling behind expectations. This is a logical step going forward – we have already seen the changing and tightening of regulations in the banking industry and I feel it is only a matter of time before we experience the same in the real estate industry. This is to be welcomed and encouraged.
What is your outlook for the future?
Looking forward to the last quarter of 2014 and beyond, the prospects for the real estate market are good: the economy continues to grow, creating both residential and commercial based demand; the large infrastructure projects in the Sultanate are encouraging new migrants to the country and providing local employment; and the strategic geographic location of the Sultanate is attracting considerable foreign direct investment. Overall the future for the real estate market in Oman is bright and appealing.