The real estate sector in Muscat is facing a transitional crisis due to several factors, including changing demographics, supply-demand imbalance, emergence of new suburbs and preference for customised commercial properties.
As property owners are looking for a solution, one of them told the Observer, “The authorities should have a clear policy while allowing new permits in areas where there are already a surplus or vacant properties.” He said that most of his tenants — both old and existing — refuse to sign agreements for a year.
“They prefer a short-term agreement which could be renewed for a similar duration if they wish to extend for various reasons,” said Moshin, an executive for a company that owns and manages several buildings in Ruwi, CBD and Wadi Kabir, Muttrah, Muscat and other areas.
With tenants looking for cheaper alternative accommodation and a large number of flats remaining vacant, property owners are left with limited options except to accept the terms of the existing customers.
“Expatriates with families prefer apartments near schools for the convenience of their children. Young Omani families do not mind the distance and prefer new suburbs of Amerat, Bausher and Ghala where new properties are available at lower rates. These places also offer an easy exit to their family homes during the weekends,” he said.
Srikant who ran a stationery business from a residential apartment building, said, “The preferences of commercial establishments have changed over the past few years. Earlier, it was common for apartments to have both residential flats and businesses.” Today, energy requirements for a commercial establishment have changed with heavy duty computers, servers and air conditioners. Utility tariffs are not the same anymore and the authorities want businesses to be away from residential areas,” he said, adding “this could be reasons for several vacant apartments in erstwhile commercial districts”.
One of the main reasons for businesses to prefer customized commercial buildings has been the parking facility.
Employees face difficulty in finding parking spaces and would lose precious morning working hours in the process.
Similarly, residents of these areas faced had parking issues near homes on return from work.
“That used to be a nightmare as our employees either reported too early to grab a parking space or too late after finding a place in a remote location,” said Fatma, an HR manager of a financial company, which now moved from the Ruwi area.
“We used to warn employees who repeatedly came late to work but most of them, including myself had problems finding a parking lot,” she said.
While that has changed with companies moving — other than retailers, clinics and restaurants — moving away, that has affected landlords who are finding to fill those places residential or family tenants.
“Many of our existing tenants have moved away to new locations, closer to their companies while the new ones do not come as we are located away from their place of work,” said Mohammed al Balsuhi, who manages several buildings owned by his father.
Also, Muscat Municipality has been working on shifting single expatriate workers in residential neighbourhoods to new townships near industrial areas in the future.
One of the main problems is workers’ housing in residential areas or sharing of accommodation.
This often lead to exceeding the actual capacity of the apartments, a report by Muscat Municipality said.
Accommodation of single expatriate workers in such areas leads to problems such as overcrowding and disturbances, the report said. “I hope there is more clarity on this subject because of not all single expatriates in sharing accommodation. Some of them prefer to stay in residential areas with families joining them occasionally,” said al Balushi.