Two things changed the conversation in Oman this year: a small but meaningful rate cut and real activity data that refused to slow. The Central Bank trimmed the policy rate to 4.75%, while headline inflation stayed near 0.5% and the housing/rents sub-index was flat. At the same time, the logistics engine fired—national container volumes rose double-digits in H1, Muscat’s airports moved more than eight million passengers year-to-date, and issuer-audited mall occupancies hovered in the 90s. If you’re underwriting the next six months, these are not footnotes—they are the context.
Our Oman 2025H2 Gap Scorecard ranks opportunities across city×sector pairs, and it does so with the investor’s decision in mind. As the scorecard below shows, Industrial & Logistics (I&L) leads in both Sohar and Muscat; prime retail in the capital is sturdier than the headlines suggest; and hospitality is quietly rebuilding operating leverage. This article explains why those scores look the way they do and how to act on them—so that when you view the chart, you already know what you’re looking for.
The composite blends six drivers that map to your outcomes: Demand (30%), Supply in the next 6–18 months (20%), Pricing Power (20%), Affordability (10%), Liquidity (10%), and Policy/Costs (10%). Each city×sector score is then risk-adjusted for data confidence (we downgrade where the market still relies on proxies, such as listing asks instead of achieved rents). In a market where cap rates move 25–50 bps on marginal news and absorption can hinge on a single handover cluster, you need that mix of speed and rigor. Think of the scorecard as your map; this guide is the legend.
The thesis here is straightforward: gateway cargo plus new localization. Sohar handled 388,680 TEU in H1 and announced six new projects worth over OMR 27m late summer. Industrial ground rent set by the regulator (OPAZ) is competitive, and the cost of debt is edging down with OMIBOR tracking policy. If you’re a developer, you can pencil a cross-dock or ambient warehouse at ~2.5 OMR/sqm/month asks and focus on speed-to-lease. If you’re an investor, you may be asking whether a 25 bps cap-rate compression is realistic—our view: yes, if TEUs stay resilient and you secure 50–60% pre-lets. Watch for any sustained loss of Sohar’s TEU share versus Salalah; that’s the first sign your upper-band rent case needs trimming.
Different engine, same destination. Muscat benefits from proximity to consumption and shorter drayage times to large retail nodes. Serviced shed supply is tight in established estates, while the policy backdrop (lower PPI, supportive land pricing elsewhere in the system) improves replacement economics. If you’re developing in Rusayl or Misfah, your risk is timing: a clump of handovers can flatten rents for a quarter. Mitigate by targeting user-specific specs (9–11m clear height, dock ratio tuned to use) and contracting power upgrades early. For core-plus buyers, the math is about stabilizing incentives—achieve <12 weeks of rent-free on five-year terms and you protect going-in yield even if headline rent growth cools.
Issuer-audited occupancy has stayed high—City Centre Muscat at 98%, Qurum at 92%, Mall of Oman at 99%. That does not mean every shop thrives; it means the landlord is winning the mix. The investable takeaway: base rents are more likely to be flat to modestly higher, while turnover top-ups carry the growth. If you’re negotiating fresh space, push for shorter fit-out holidays in exchange for a marketing contribution and a soft sales kicker threshold. If you’re underwriting, stress test tenant sales by category and assume -3% to +3% YoY; the portfolio can still deliver your IRR if you manage downtime between rotations.
City occupancy around the high-50s in H1, with air passengers trending up, sets the stage for rate discipline. The operators who outperform in the next two quarters will do it with mix: corporate and MICE midweek, leisure on shoulder weekends, and tactical event blocks. Developers considering branded residences or limited-service adjacencies should anchor pro formas on occupancy lifting 1–3 percentage points and ADR flat to +2%. If oil slides into the low-60s for a spell, expect corporate trips to manage costs; counter with offer design (length-of-stay and F&B bundles) rather than rate cuts that haunt your next RFP cycle.
This score reflects a quiet but important trend: fiber penetration and international bandwidth keep expanding, and enterprise IT is de-risking on-premise stacks. If you operate colo or edge nodes, the six-month window is about disciplined scale—add racks in 100–150 increments where you have line-of-sight demand from logistics, healthcare, or fintech. Power allocation and redundancy are the gating items; secure those early, and your utilization curve will pay for itself faster than headline GDP suggests.
The housing/rents CPI print is flat, and that matters: it removes one of the excuses for across-the-board increases. Achieved rents will be submarket-specific. Prime waterfront and master-planned districts can hold 0–2% growth if handovers remain orderly; middle-market areas with 2024 completions feeding into 2025H2–2026H1 will be more balanced. If you’re acquiring, underwrite to current NOI and treat growth as an upside scenario; if you’re developing, pre-sell or pre-lease to de-risk take-up and protect equity IRR.
The story is flight-to-quality. Grade-A nodal assets (Al Mouj, Madinat Al Irfan) hold 7–12 OMR/sqm/month asks, while secondary stock faces selective softness. In this segment, your best lever is product design: ready-to-move floors with credible ESG fit-outs and flexible subdivision capture tenants trading up from older stock. If you’re buying, assume a two-speed market—stable occupancy above 85% for Grade-A, and a longer leasing runway elsewhere—and make your cap-ex releases milestone-based to manage cash drag.
High occupancy, modest base-rent growth, and more turnover-linked deals. If you’re developing neighborhood centers, curate toward daily-needs anchors and F&B with experiential elements. If you’re a lender, underwrite revenue quality: look for tenant sales reporting, lease clauses that reset thresholds, and landlord analytics that predict churn before it shows up in vacancy. Your exit cap assumptions should be conservative in secondary high-street; in prime malls, the cap can grind tighter if footfall holds.
Both Muscat and Sohar are investable—for different reasons. Muscat gives you proximity to consumption; Sohar gives you trade lane optionality. In either case, your IRR sensitivity is exposure to volumes and the speed of fit-out. Use break-even occupancy metrics rather than headline rent growth to guide go/no-go decisions: if you can cover debt service at 70–75% occupancy on day 180 post-PC, the deal works even if rents plateau for a quarter.
The operating leverage is back, but it isn’t 2019. Manage the mix, defend ADR through value, and keep an eye on air passenger trends. If the next two monthly prints dip more than 5% YoY, revisit your Q1 promotional calendar early.
In I&L, the fastest path to value is pre-let discipline and spec tuned to user economics. Write specs around loading efficiency, clear heights, and power. In retail, design for rotation—demising flexibility and back-of-house capacity beat a point of headline rent when you’re trying to land the right brand. In residential, treat pricing power as earned, not given; your handover timing and community amenity will decide absorption, not CPI.
Expect cap-rates to bias flat to 25 bps tighter if rates ease again and activity stays firm. The edge is in asset selection and operations. In I&L, target assets with utility headroom and room for docks; in retail, focus on landlords with proven curation; in hospitality, back operators with revenue management discipline. Across all sectors, the simplest alpha may be governance: verify data room quality, insist on monthly KPI reporting, and reward teams that deliver it.
Calibrate covenants to the new cycle. Replace blunt pre-sales hurdles with pre-let thresholds and independent tenant-credit checks in I&L. For retail, tie revolvers to tenant-sales reporting compliance. In hospitality, link waivers to forward-bookings and channel mix. Your goal is not to slow deals—it’s to surface risk early.
As the scorecard below shows, Sohar I&L and Muscat I&L top the table, followed by prime Muscat retail, hospitality, and the digital-infrastructure niche. The macro context—policy easing, flat housing inflation, ports momentum, strong issuer occupancies—explains why. But the map is not the territory. Your next step is to overlay project-level realities: power and fiber for sheds and DCs; fit-out timings and category rotation for retail; event calendars and corporate mix for hotels; handover cadence and amenity for residential; ESG and plug-and-play floors for office.
If you’re developing in this cycle, build pre-let pipelines and power certainty before you pour concrete. If you’re buying, pay for information flow and asset agility, not just today’s yield. And if you want a deeper breakdown—submarket heat maps, achieved-rent panels, or sensitivity trees—contact us. We’ll bring the dataset; you bring the mandate.
Oman enters 2025 H2 with tame inflation, a small policy-rate cut, and firm trade and travel flows. Containers rose in H1, air passengers stayed strong, and prime malls are nearly full. That mix supports industrial and logistics, while retail and hospitality hold their ground.
This six-month outlook converts hard data into underwritable actions. Start with the Gap Scorecard to rank city×sector opportunities, then dive into sector tables for the “now” snapshot and the 6-month banded forecasts.
The composite blends Demand (30%), Supply over 6–18 months (20%), Pricing Power (20%), Affordability (10%), Liquidity (10%), and Policy/Costs (10%). Scores are then risk-adjusted for data confidence.
| Rank | City | Sector | Score (/5) | Why now |
|---|---|---|---|---|
| 1 | Sohar | Industrial & Logistics | 3.49 | Gateway flows and localized projects; supportive OPAZ land terms. |
| 2 | Muscat | Industrial & Logistics | 3.48 | Tight serviced sheds and easing cost of capital. |
| 3 | Muscat | Retail (prime malls) | 3.39 | Issuer-audited occupancy near full; controlled pipeline. |
| 4 | Muscat | Hospitality | 3.38 | Occupancy trending higher; air passengers supportive. |
| 5 | Muscat | Alt-Assets (Digital infra) | 3.25 | Network depth and steady enterprise migration. |
| Metric | Latest | As-of | Primary | Corroboration | Confidence |
|---|---|---|---|---|---|
| Policy rate (repo) | 4.75% · % | 2025-09-18 | ONA | Reuters | High |
| OMIBOR 3M | ~4.78% · % | 2025-09-02 | CBO | CBO ops | Medium |
| CPI headline YoY | 0.5% · % | 2025-08-31 | NCSI | NCSI news | High |
| CPI housing/rents YoY | 0.0% · % | 2025-08-31 | NCSI | NCSI CPI page | Medium |
| PPI YoY | −2.7% · % | 2025-06-30 | NCSI | TAS | Medium |
| Private-sector credit YoY | +4.6% · % | 2025-07-31 | CBO | Arab News | High |
| Ports — combined (H1) | 2,427,195 · TEU | 2025-06-30 | MTCIT | Muscat Daily | High |
| Port of Salalah (H1) | 2.03 · m TEU | 2025-06-30 | Issuer PDF | PortNews | High |
| Port of Sohar (H1) | 388,680 · TEU | 2025-06-30 | SOHAR PDF | MTCIT | High |
| Air passengers (YTD) | 8,366,273 · pax | 2025-07-31 | NCSI | Times of Oman | High |
| Hotels 3–5★ occupancy (H1) | 54.7% · % | 2025-06-30 | Oman Observer (NCSI) | Muscat Daily | High |
| Oman crude (avg, Aug) | 69.37 · USD/bbl | 2025-08-31 | ONA | S&P Global | Medium |
Read-through: Cost of capital eases, inflation is tame, and mobility/trade are firm. Expect flat-to-mild cap-rate compression and steady absorption, led by industrial/logistics and hospitality.
| Sector | Now | Inference (6m) | Drivers & Sensitivities | Confidence | Primary | Corroboration |
|---|---|---|---|---|---|---|
| Residential | 2BR Al Mouj ~709 · OMR/mo · 2025-06-30 | Prime 0%–+2%; Mid −1%–+1% | CPI-housing flat; handovers; OMIBOR ±50 bps → ±0.5pp | Medium | Observer (Savills) | Savills listings |
| Office | Grade-A nodes 7–12 · OMR/sqm/mo · 2025-06-30 | Prime 0%–+1%; Secondary −1%–0% | Flight-to-quality; limited new A; rate sensitivity | High | Hamptons H1-2025 | Observer |
| Retail | City Centre Muscat 98% · % · 2025-09-01 | Prime 0%–+2%; Street −1%–+1% | High occupancy; category mix; footfall | High | MAF Sep-2025 | MAF Mar-2025 |
| Industrial & Logistics | Prime shed ask ~2.5 · OMR/sqm/mo · 2025-09-01 | +1% to +3% | TEUs strength; OPAZ land 0.250–0.500 /sqm/yr | High-Medium | Listing | OPAZ |
| Hospitality | Muscat occ 59% · % · 2025-06-30 | +1pp to +3pp; ADR 0%–+2% | Air-pax ±5% → ±1pp occ | High | Hamptons H1-2025 | NCSI pax |
| Alt-Assets (DC) | Fixed-broadband ~64% · % households · 2025-Q1 | Colo take-up flat to +5% | Fibre/backhaul depth; power allocations | High | TRA Open Data | TRA indicators |
Sector logs (Muscat): Residential · Office · Retail · Industrial & Logistics · Hospitality · Education · Alt Assets
| Sector | Now | Inference (6m) | Drivers & Sensitivities | Confidence | Primary | Corroboration |
|---|---|---|---|---|---|---|
| Residential | 2BR ask 100–260 · OMR/mo · 2025-09-21 | −1% to +1% (2BR); villas 0%–+2% | CPI-housing flat; completions cadence | Medium | Dubizzle | Bayut |
| Office | Shell/core ~3.3 · OMR/sqm/mo · 2025-09-14 | Grade-B 0%–+1%; serviced 0%–+2% | SME demand from port/freezone; TEU sensitivity | Medium | Bayut | Bayut feed |
| Retail | City Centre Suhar 92% · % · 2025-09-01 | Prime 0%–+2%; street −1%–+1% | High occupancy; local spend elasticity | High | MAF Sep-2025 | MAF Mar-2025 |
| Industrial & Logistics | Freezone shed ask ~2.5 · OMR/sqm/mo · 2025-09-15 | +1% to +3% | SOHAR TEUs; OPAZ land 0.250–0.500 /sqm/yr | High-Medium | Tamlik | MTCIT |
| Hospitality | Nat. occ 54.7% · % · 2025-06-30; SOH pax 6,831 · pax · 2025-07-31 | Occ 0–+2pp; ADR 0%–+1% | Events; industrial travel; low base | High | Observer (NCSI) | NCSI pax |
Sector logs (Sohar): Residential · Office · Retail · Industrial & Logistics · Hospitality · Education · Alt Assets
Test: National TEUs, port splits, and Sohar localization cadence.
Evidence: H1-2025 TEUs 2,427,195 · TEU · 2025-06-30 (+11.7% YoY) (MTCIT; Muscat Daily). Salalah 2.03 · m TEU · 2025-06-30 (+21% YoY) (issuer; PortNews). Sohar 388,680 · TEU · 2025-06-30 (SOHAR; MTCIT).
Finding: System momentum is intact; mix skews toward Salalah transshipment.
Implication: Keep shed-rent band at +1% to +3% (6m). Trim by 1pp if national TEUs soften <+5% YoY and Sohar drops <−10% YoY.
Test: Issuer-audited occupancies plus mobility proxies.
Evidence: CC Muscat 98%, CC Qurum 92%, CC Suhar 92%, Mall of Oman 99% · % · 2025-09-01 (MAF Sep-2025; MAF Mar-2025). Air-pax 8,366,273 · pax · 2025-07-31 (NCSI; Times of Oman).
Finding: Prime malls remain tight; demand steady.
Implication: Base rents 0% to +2% (6m); cap to 0–1% if air-pax falls >−5% YoY.
| Rank | City | Sector | Score | Why now | Download |
|---|---|---|---|---|---|
| 1 | Sohar | Industrial & Logistics | 3.49 | Gateway cargo plus new projects; low ground rent. | HBU notes |
| 2 | Muscat | Industrial & Logistics | 3.48 | Tight serviced stock; easing rates. | HBU notes |
| 3 | Muscat | Retail (prime malls) | 3.39 | Occupancy near full; controlled pipeline. | HBU notes |
| 4 | Muscat | Hospitality | 3.38 | Occupancy rising; pax momentum. | HBU notes |
| 5 | Muscat | Alt-Assets (DC) | 3.25 | Fibre depth; enterprise IT migration. | HBU notes |
Two-Source Rule on decisive metrics: a primary authority plus an independent Tier-1 or audited issuer. Freshness Guard is 12 months; proxies are labeled Medium with upgrade paths. Forecasts are clear Inferences with drivers and ± sensitivities. Currency is OMR primary; USD only where the market quotes the series (e.g., crude). Reuse is allowed with attribution and working links.
Upgrade paths: MoHUP tenancy registry CSV; municipal e-permits monthly CSV; NCSI hotel KPIs by governorate; daily OMIBOR CSV from CBO; operator leasing panels for achieved rents.
Top of the scorecard: Sohar Industrial & Logistics and Muscat Industrial & Logistics. Sohar benefits from gateway cargo and newly localized projects; Muscat benefits from proximity to demand and a tight supply of serviced sheds. Prime Muscat retail is next—issuer-audited occupancy is high, followed by hospitality and digital infrastructure. If you’re allocating Oman real estate capital this half, start with I&L, then selective prime retail.
The policy rate sits around 4.75%, and the 3M OMIBOR is around 4.8%. Our base case for Oman real estate is cap rates flat to −25 bps if rates ease another notch and operating KPIs hold. Sensitize +50 bps on funding and a 5–10% swing on NOI to check IRR resilience.
Design for 9–11 m clear height, 10–12 docks for cross-dock, and secure power early. Target ~2.5 OMR/sqm/month asks, 5-year lease terms, 8–12 weeks rent-free, and 50–60% pre-lets before pouring concrete. That hits most Omani real estate investors’ IRR hurdles while protecting downside if rents plateau for a quarter.
Two must-haves for Omani residential real estate:
Omani real estate office demand is flight-to-quality. Grade-A nodes (Al Mouj, Madinat Al Irfan) clear around 7–12 OMR/sqm/month; secondary stock needs incentives and ESG-credible fit-outs. Developers should deliver plug-and-play floors with divisible plates; buyers should structure cap-ex releases to milestones and underwrite a two-speed market (A vs. non-A).
Prime-mall real estate in Oman is tight but selective. Asset-level occupancy in flagship malls is in the 90s; expect base rents to be flat to +2%, with growth coming from turnover top-ups. For neighborhood or street retail, carefully underwrite micro-locations and assume wider downtime. If you’re negotiating new leases, trade short fit-out holidays for stronger data rights (tenant sales reporting) to de-risk cash flow.
City occupancy is rebuilding (Muscat in the high 50s in H1). We model +1–3 pp in occupancy and 0–2% in ADR over six months if air passenger volumes remain firm. For Oman real estate hotels, protect ADR with value (LOS offers, event blocks) rather than blanket discounts; your next RFP cycle depends on it.
Three things:
Adopt a two-source rule (authority + Tier-1) and demand monthly KPI feeds: achieved rents, incentives, vacancy, tenant sales (retail), pax/occ (hotels). For industrial Oman real estate, require as-built specs, power letters, and dock counts in the data room; for residential, insist on lease-level panels rather than listing asks.
Swap blunt pre-sale hurdles for pre-let thresholds in I&L; tie retail revolvers to tenant-sales reporting; link hospitality waivers to forward bookings. Build DSCR tests off stabilized NOI with a conservative 70–75% occupancy break-even for sheds—high-signal for Oman real estate credit.
Lead with risk-adjusted scores, then show sensitivity trees (rates ±50 bps, TEUs ±5 pp, pax ±5%). Frame each Oman real estate bet as “pre-let discipline + spec that clears + KPI visibility.” Close with upgrade paths (MoHUP CSVs, issuer tenant-sales feeds) to turn Medium-confidence inputs into High.
Need the underlying CSVs, evidence cards, or city/sector logs for your Oman real estate model? Use the download pack referenced in the article or ask for a submarket drill-down and achieved-rent panel.
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