Muscat: Real estate investment in Oman has been opened up for all Omani residents, regulators in the Sultanate have announced.
New regulations for Real Estate Investment Trusts (REITs) have also been announced by the Capital Markets Authority (CMA) in Oman.
REITs are collective investment schemes in the real estate sector. They will allow residents, both Omanis and expats, to purchase a part of a real estate development in the Muscat Securities Market, similar to purchasing shares in the stock market. This was one of the 120 initiatives proposed by Tanfeedh, the National Plan for Economic Diversification, in November 2016.
Regarding the new scheme, Sheikh Abdullah bin Salem Al Salemi, Chief Executive Officer of the General Authority of CMA, said: “The regulation of real estate investment funds will contribute to the activation of an important financing tool that will open the way for a large segment of the community to contribute to, and benefit from, the real estate activity in the Sultanate.”
Real estate investment funds will be available to the public on the basis that a part of the fund’s capital will be offered for public or private placement, as listed in the regulation, and its investment units can be traded through the Muscat Securities Market.
“The issuance of the regulation will attract more foreign funds for the benefit and stimulation of the real estate sector. Real estate investment funds will be available to the public by offering part of the capital for subscription,” HE Sheikh Abdullah Salim Al Salmi, Executive President of CMA, said.
The minimum capital required to form this fund will be OMR10 million and investors will receive 90 per cent of the annual profits of the funds, depending on the number of units they hold. The funds will be exempt from income tax.
REITs will be managed by professional entities licensed by the CMA, and also regulated and supervised by the body, according to the stock market’s rules and regulations. “There are several positive impacts on the market due to this. One is certainly creating liquidity in the market, and also providing a way to diversify investments, especially for real estate fans. Apart from this, there will be different types of projects developed and the standard of real estate services will improve substantially,” Hassan Mohammed Juma, MD at Al Osool Real Estate and Deputy Chairman of the Oman Real Estate Association, said.
In the rules for ownership of properties, the decision states that the property should be existing and in the form of commercial, residential, industrial and tourist. The decision allows the ownership of existing residential complexes of an area not less than 10,000 square metres, but not agricultural or empty lands.