Oman Telecommunications Company (Omantel) and Oman Investment Authority (OIA) have collaborated to launch a new real estate investment fund (REIF) in the sultanate.
The fund is called Pearl REIF, a special purpose REIF company approved by the Capital Market Authority (CMA), Omantel said.
The share capital of the Pearl REIF Fund is $110 million. Omantel stated that its contribution to Pearl REIF is in-kind and to this effect, the company has entered into a definitive agreement with Pearl REIF for the sale and leaseback of its headquarters building located in Madinat Al Irfan.
Omantel will receive 279,086,867 units of 100bz each in the Pearl REIF Fund and a cash amount of $70.2 million for the total value of its in-kind contribution. According to Omantel’s filing, this transaction is part of the company’s asset-light strategy, which is expected to help it deleverage its existing loans.
According to reports, Oman’s commercial real estate market is expected to grow at a CAGR of more than 11 percent over the next five years. COVID-19 had a significant impact on Oman’s commercial real estate market since the demand for office space in Muscat fell owing to pandemic restrictions. Despite the disturbance, the market is currently recovering.
Under the Oman Vision 2040, the government is pushing more investment flows into the real estate sector. Furthermore, investment opportunities are growing in the hospitality and industrial sector and attracting developers with tax breaks, reduced rent, fast‑tracked licenses and duty waivers.
Recently, Saudi Arabia’s Dar Al Arkan entered Oman’s flourishing real estate market, to develop ‘AIDA’ one of the largest premium, mixed-use real estate projects located in the Yiti area in Muscat.