Public-private partnerships could drive infrastructure investment
Oman’s removal of fuel subsidies and other measures to tighten spending could boost public-private partnerships (PPPs) in the sultanate’s real estate market, says Cluttons.
The Omani government’s spending cuts could lead to a rise in the number of PPPs by attracting additional foreign investment, the real estate consultancy said.
“For a country as reliant on hydrocarbon income as Oman, the continuing slide in crude prices is driving the need for additional income streams. Cluttons believes this move could be beneficial to international investors that want to engage in projects,” said Faisal Durrani, head of research at Cluttons.
Oman has thus far seen limited PPPs as its market is still fairly small compared to some neighbouring countries, said Philip Paul, head of Cluttons Oman.
“International interest in Oman’s real estate development has mainly come from a handful of Gulf developers. However, large scale projects such as Port Sultan Qaboos Waterfront could open the market for foreign investors to gain a foothold in a highly attractive market that has a good track record.”
Oman’s property market has been supported by the relative stability in job creation levels, as the country continues to boost oil production, Cluttons said. Continued infrastructure spending has also boosted business confidence and has contributed to stability in the country’s residential and commercial markets.
“Private-public partnerships offer a good alternative solution to the government to continue driving major infrastructure projects and boost job opportunities that will support economic growth, particularly when credit availability is low,” Paul said.