Table of Contents
- Executive Summary: Key Insights & Market Overview
- Macroeconomic Drivers and Policy Updates in Oman
- Current Supply, Demand & Vacancy Trends (2025)
- Major Commercial Real Estate Segments: Office, Retail, Industrial, Hospitality
- Key Legal, Tax, and Regulatory Considerations (Ministry of Housing and Urban Planning, taxauthority.gov.om)
- Foreign Investment Rules, Compliance & Ownership Structures
- Notable Projects, Developments, and Infrastructure Initiatives (oman.om, madayn.om)
- Statistical Overview: Pricing, Yields, and Market Performance
- Future Outlook: Forecasts, Risks & Opportunities (2025–2030)
- Resources & Official Contacts for Investors and Stakeholders
- Sources & References
Executive Summary: Key Insights & Market Overview
The commercial real estate market in Oman is navigating a period of transformation in 2025, shaped by regulatory reforms, evolving demand, and economic diversification efforts. The government’s Vision 2040 roadmap continues to drive significant investment in infrastructure, logistics, and tourism, directly impacting the commercial property landscape. Key urban centers—Muscat, Sohar, and Duqm—remain focal points for office, retail, and industrial developments, with notable growth in logistics hubs and free zones.
Recent legal reforms have sought to enhance transparency and investor confidence. The promulgation of the Foreign Capital Investment Law (Royal Decree No. 50/2019) continues to enable 100% foreign ownership in most sectors, stimulating international participation in commercial real estate projects. The Ministry of Housing and Urban Planning has accelerated digitalization of land and property registration, aiming to reduce transaction times and strengthen due diligence processes (Ministry of Housing and Urban Planning).
Compliance with building codes and environmental standards has tightened, especially for Grade A office and industrial assets. The implementation of the new Real Estate Development Law (Royal Decree No. 30/2018) requires developers to register large-scale projects and comply with escrow requirements, safeguarding buyers and tenants (Ministry of Justice and Legal Affairs). The Oman Real Estate Association, in collaboration with the Ministry, has also introduced continuing professional development requirements for licensed brokers and property managers to enhance market professionalism (Oman Real Estate Association).
- Average office vacancy rates in Muscat remain elevated at approximately 20%, with downward pressure on rents observed since 2023, though stabilization is expected in prime assets by late 2025.
- The industrial and logistics segment is buoyed by ongoing expansion in the Sohar and Duqm free zones, with warehouse demand rising in response to e-commerce and regional trade growth (Public Authority for Special Economic Zones and Free Zones).
- Retail real estate faces a mixed outlook, as new supply in large malls contrasts with increased demand for community and mixed-use developments.
Looking ahead, the outlook for Oman’s commercial real estate market in 2025 and beyond is cautiously optimistic. Structural reforms, growing foreign investment, and strategic infrastructure projects are set to underpin gradual recovery and innovation, while ongoing regulatory enhancements aim to ensure compliance, transparency, and sustainable market growth.
Macroeconomic Drivers and Policy Updates in Oman
The commercial real estate sector in Oman is closely linked to the country’s evolving macroeconomic landscape and regulatory framework. After a period of pandemic-related slowdown, Oman’s economic rebound—driven by fiscal reforms, diversification, and improved oil revenues—has provided renewed impetus for commercial property demand. According to the Ministry of Finance, Oman’s GDP is projected to maintain steady growth through 2025, supported by robust public investments under Vision 2040 and continued government spending on infrastructure, logistics, and tourism development. The non-oil sector, which includes trade, services, and manufacturing, is expected to be a key growth engine, directly impacting demand for offices, industrial parks, and retail spaces.
From a policy perspective, significant updates have shaped the sector’s legal and compliance environment. In 2023, the government amended the Foreign Capital Investment Law to facilitate greater foreign ownership and streamline licensing for commercial real estate activities. The Ministry of Commerce, Industry and Investment Promotion has expanded the list of activities open to 100% foreign investment, including certain commercial real estate and property management services. These reforms aim to attract international capital and expertise, particularly in special economic zones (SEZs) such as Duqm, Salalah, and Sohar, where large-scale commercial and industrial projects are underway (Public Authority for Special Economic Zones and Free Zones).
Land use and development compliance remain governed by the Ministry of Housing and Urban Planning, which has introduced digital land registration and e-permitting to streamline transactions and enhance transparency. The ministry’s recent initiatives focus on urban expansion, mixed-use zoning, and the introduction of green building standards, aligning with sustainability goals. Compliance with anti-money laundering (AML) and counter-terrorism financing regulations, as overseen by the Capital Market Authority and Central Bank of Oman, has also tightened, particularly for property developers and brokerage firms.
Key statistics point to a cautiously optimistic outlook for Oman’s commercial real estate market in 2025. The National Centre for Statistics and Information reported a gradual increase in real estate transaction values since 2022, with commercial property registrations and building permits showing modest year-on-year growth. However, supply-demand imbalances persist in some office and retail segments, pressing operators to adapt through flexible leasing and mixed-use concepts. Looking ahead, Oman’s commercial real estate sector is expected to benefit from ongoing reforms, demographic growth, and infrastructure projects, while remaining sensitive to global economic shifts and local regulatory changes.
Current Supply, Demand & Vacancy Trends (2025)
The commercial real estate sector in Oman is navigating a period of transformation in 2025, shaped by evolving demand patterns, a recalibrated supply pipeline, and regulatory initiatives. The office market in Muscat, Oman’s commercial hub, continues to see a tenant-friendly environment with steady supply and cautious demand. Latest data from the National Centre for Statistics and Information indicates that total office stock in Muscat surpassed 1.2 million square meters gross leasable area (GLA) in late 2024, with an average vacancy rate hovering around 25%—a slight improvement from previous years due to limited new completions and moderate absorption by government and financial sector tenants.
Retail supply remains substantial, with the Ministry of Commerce, Industry and Investment Promotion reporting over 800,000 sqm of retail GLA in Muscat as of Q1 2025. However, demand is polarized: established malls and community centers in prime locations maintain healthy occupancy (above 85%), while secondary and peripheral projects face higher vacancies, occasionally exceeding 30%. The sector is adjusting to shifts in consumer behaviour and rising e-commerce penetration, leading to a focus on experiential retail and food & beverage-driven formats.
Within the logistics and industrial segment, the government’s drive to diversify Oman’s economy under Vision 2040 has fueled new supply, especially in special economic zones such as Duqm and Sohar. According to the Public Authority for Special Economic Zones and Free Zones, over 350,000 sqm of new warehousing and light industrial space came online in 2024 alone. Demand remains resilient, underpinned by trade, manufacturing, and growth in the non-oil sectors, keeping vacancy rates in key logistics hubs below 15%.
On the legislative front, reforms enacted by the Ministry of Justice and Legal Affairs in late 2023—clarifying commercial lease renewal rights and mandating electronic registration of contracts—are supporting market transparency and landlord-tenant compliance. Local authorities continue to monitor building permits and occupancy certificates to manage oversupply risks, particularly in the office and retail segments.
Looking ahead, the balance of supply and demand in Oman’s commercial real estate market is expected to improve gradually through 2025 and beyond. Developers are exercising restraint in launching new projects, and the government’s pro-business reforms are expected to support occupier demand and stabilize vacancy rates, especially in well-located and high-quality assets.
Major Commercial Real Estate Segments: Office, Retail, Industrial, Hospitality
The commercial real estate landscape in Oman is marked by evolving trends across its major segments: office, retail, industrial, and hospitality. As the Sultanate pursues economic diversification under Oman Vision 2040, the sector is experiencing both challenges and new opportunities, particularly in the context of regulatory changes and shifting market demands.
- Office Segment: The office market in Muscat and other key cities remains affected by hybrid work patterns and a cautious approach to expansion among multinational and domestic firms. Vacancy rates have remained elevated in prime business districts, with landlords offering incentives to attract and retain tenants. Notably, the introduction of the Foreign Capital Investment Law (FCIL)—permitting 100% foreign ownership in most sectors—has encouraged international interest, albeit with a gradual impact on office space demand. Compliance with Omani labor and company registration laws is crucial for foreign investors entering the market.
- Retail Segment: Retail real estate is adapting to a rise in e-commerce and changing consumer preferences. New mall developments are limited, with focus shifting towards refurbishment and mixed-use projects. The Ministry of Transport, Communications and Information Technology has supported digital transformation in retail, impacting physical space requirements. Retailers must comply with consumer protection and licensing regulations, enforced by the Public Authority for Consumer Protection.
- Industrial Segment: The industrial and logistics sector remains a bright spot, supported by government investment in free zones and ports such as Madayn (Public Establishment for Industrial Estates) and Sohar Port and Freezone. These zones offer streamlined customs procedures, tax incentives, and infrastructure tailored for manufacturing, warehousing, and distribution. Oman’s accession to international trade conventions and ongoing regulatory updates have enhanced compliance requirements regarding environmental standards and labor laws.
- Hospitality Segment: The hospitality sector is recovering steadily, driven by government tourism initiatives and international events. According to Oman Ministry of Heritage and Tourism, hotel occupancy rates are expected to rise through 2025, aided by increasing visitor arrivals and new luxury and eco-friendly developments. Compliance with health, safety, and licensing requirements remains stringent.
Looking ahead to 2025 and beyond, commercial real estate in Oman is projected to benefit from continued regulatory reforms, foreign investment incentives, and infrastructure developments. The sector’s outlook is cautiously optimistic, contingent on sustained economic growth and effective implementation of policy frameworks.
Key Legal, Tax, and Regulatory Considerations (Ministry of Housing and Urban Planning, taxauthority.gov.om)
The legal and regulatory landscape for commercial real estate in Oman is shaped by a series of statutes, ministerial decisions, and ongoing reforms, with notable developments in 2024 and anticipated changes into 2025. The Ministry of Housing and Urban Planning (MHUP) is the principal authority for land allocation, registration, and planning permissions, while the Tax Authority oversees the fiscal obligations associated with property transactions and ownership.
A key legislative framework is the Royal Decree No. 5/81 (Land Law), which outlines the procedures for acquisition, registration, and transfer of land. Amendments in recent years—especially Royal Decree No. 29/2023—have further clarified the rights and restrictions for foreign investment in commercial property, including specific zones where non-Omanis and GCC nationals may own land on a freehold or usufruct basis. Notably, the “Integrated Tourism Complexes” (ITCs) and certain economic free zones allow greater foreign participation, under the supervision of MHUP.
Compliance with urban planning regulations is mandatory for all commercial developments. Developers must obtain a no-objection certificate and detailed site approval from MHUP, followed by environmental and municipal clearances. In 2024, digitalization initiatives were introduced to streamline approvals, with the “Tatweer” platform enhancing transparency and reducing processing times (Ministry of Housing and Urban Planning).
From a tax perspective, Oman imposes a 5% value-added tax (VAT) on most commercial property transactions, including sales and leasing, as enforced since April 2021 by the Tax Authority. Corporate income tax applies to rental income and capital gains generated from commercial property, currently at a standard rate of 15%. However, there are exemptions and incentives available for projects within designated economic zones and ITCs, subject to compliance with local rules and investment thresholds.
Statistically, the Ministry’s 2024 annual report noted a moderate 6% increase in registered commercial real estate transactions year-on-year, with Muscat and Sohar as the leading cities. The government continues to prioritize regulatory stability to attract foreign direct investment, and further legal refinements—especially concerning public-private partnerships and REIT structures—are expected by 2025 (Ministry of Housing and Urban Planning).
Looking ahead, Oman’s Vision 2040 and National Urban Development Strategy underpin ongoing legal modernization and infrastructure investment. Stakeholders should anticipate further digitalization of land registries, enhanced due diligence requirements, and evolving tax compliance obligations, reinforcing Oman’s ambition to be a regional hub for commercial real estate investment.
Foreign Investment Rules, Compliance & Ownership Structures
Oman’s regulatory framework for foreign investment in commercial real estate has evolved significantly in recent years, aiming to balance the attraction of international capital with safeguarding national interests. The current laws are guided by the Ministry of Commerce, Industry and Investment Promotion, which oversees the implementation of the Foreign Capital Investment Law (Royal Decree No. 50/2019). This law permits foreign investors to own up to 100% of companies in most sectors, including those involved in commercial real estate development, subject to specific licensing and sectoral restrictions.
Foreign ownership of land itself, however, remains tightly regulated. The Ministry of Justice and Legal Affairs stipulates under Royal Decree 29/2018 that non-GCC nationals can own property only within designated Integrated Tourism Complexes (ITCs) or as part of projects specifically approved by royal decree. Outside ITCs, foreign entities may generally lease, but not own, commercial properties for up to 50 years, renewable once, as outlined in the Land Law and its amendments.
Structurally, foreign investors often enter the market through Omani-registered companies, including Limited Liability Companies (LLCs) or joint ventures with local partners, to comply with sectoral and land ownership requirements. Compliance obligations include obtaining foreign investment licenses, adhering to anti-money laundering protocols enforced by the Capital Market Authority for real estate funds and REITs, and meeting building and operational regulations set by municipal authorities.
Key recent events include the 2023 update to the Usufruct Law, facilitating longer-term leases and greater flexibility for foreign investors in logistics and industrial zones, such as those managed by Public Establishment for Industrial Estates (Madayn). The government’s Vision 2040 strategy continues to prioritize real estate as a driver of economic diversification, with foreign direct investment in the sector reaching OMR 1.5 billion by late 2024 according to data from the National Centre for Statistics and Information.
Looking ahead to 2025 and beyond, Oman is expected to further liberalize commercial real estate investment rules, especially in special economic and free zones, to attract international capital. However, ongoing compliance with anti-money laundering, beneficial ownership disclosure, and zoning regulations will remain critical. Potential investors should also monitor forthcoming amendments anticipated under the ongoing review of the Foreign Capital Investment Law and real estate-related decrees, as the government signals greater openness balanced by regulatory oversight.
Notable Projects, Developments, and Infrastructure Initiatives (oman.om, madayn.om)
Oman’s commercial real estate sector is witnessing significant momentum in 2025, driven by a robust pipeline of large-scale projects and strategic infrastructure initiatives. Government-backed development remains a cornerstone, with the continued expansion of Special Economic Zones (SEZs), industrial estates, and integrated tourism complexes that foster foreign investment and economic diversification.
One of the flagship initiatives is the Duqm Special Economic Zone, managed by the Public Authority for Special Economic Zones and Free Zones. The zone spans over 2,000 square kilometers and integrates commercial, industrial, and logistics facilities. Recent years have seen the completion of landmark projects such as the Duqm Port and the Duqm Refinery, which have spurred demand for office spaces, warehouses, and hospitality units. In 2025, additional logistics parks and commercial centers are under development to accommodate growing business activity and international tenants.
Another key player is the Public Establishment for Industrial Estates (Madayn), which oversees the development of industrial cities across Oman. Madayn is actively expanding its network, with new phases in Sohar, Salalah, and Samail Industrial Cities. These estates offer ready-built factories, business centers, and commercial plots designed to attract SMEs and multinational corporations. Recent statistics from Madayn report cumulative investments exceeding OMR 7 billion and the creation of more than 60,000 jobs within its estates.
Urban mixed-use developments are also reshaping the commercial property landscape. The Knowledge Oasis Muscat (KOM), an initiative of Madayn, continues to attract technology firms and startups, providing modern office spaces and business incubation facilities. Meanwhile, integrated tourism complexes like Al Mouj Muscat have introduced retail, hospitality, and Grade-A office components, enhancing the capital’s commercial real estate profile.
In terms of infrastructure, Oman’s government is making strategic investments in transport and utilities to underpin commercial growth. The expansion of Muscat and Salalah airports, alongside upgrades to highway networks and digital infrastructure, are directly supporting real estate activity by improving business connectivity and accessibility (Oman E-Government Portal).
Looking ahead, Oman’s Vision 2040 and the National Urban Development Strategy prioritize sustainable and smart-city projects, ensuring that future commercial real estate developments align with international best practices in environmental compliance and urban planning. These efforts are expected to further catalyze investment and diversify commercial property offerings across the Sultanate.
Statistical Overview: Pricing, Yields, and Market Performance
Oman’s commercial real estate sector in 2025 continues to reflect the nation’s broader economic trends and diversification ambitions. After a period of subdued performance in the late 2010s and early 2020s, recent government initiatives and regulatory reforms have contributed to stabilizing key market metrics.
According to the National Centre for Statistics and Information, the total value of real estate transactions in Oman reached OMR 2.9 billion in 2023, showing a modest annual growth rate as the market recovers from pandemic-era lows. Commercial property transactions accounted for approximately 18% of this figure, with Muscat, Seeb, and Salalah remaining key hubs. While detailed 2025 data is pending, preliminary results suggest a continued upward trajectory, supported by ongoing infrastructure investment and regulatory stability.
Rental yields for prime office and retail assets in Muscat have hovered between 7% and 9% in early 2025, according to data published by the Ministry of Commerce, Industry and Investment Promotion. These yields are among the highest in the Gulf Cooperation Council (GCC), reflecting both relative affordability and persistent demand for Grade A space. However, secondary locations and older stock have seen yields soften, in part due to oversupply and evolving business requirements post-pandemic.
Pricing for commercial assets remains competitive. As per the Ministry of Justice and Legal Affairs, the average transaction price per square meter for commercial properties in Muscat ranged from OMR 700 to OMR 1,200 in 2024, with marginal increases forecast for 2025 as business confidence improves and new entrants, particularly in logistics and technology, drive demand.
Vacancy rates for Grade A office space in Muscat have stabilized at around 15% in 2025, down from highs of over 20% in 2021. This trend is attributed to consolidation in the financial and energy sectors, as well as government-driven incentives to attract foreign investment. Retail vacancy remains higher, particularly in non-prime locations, but is expected to gradually decline as consumer demand recovers and new formats such as mixed-use developments gain traction (National Centre for Statistics and Information).
Looking ahead, forecasts indicate that commercial real estate in Oman will benefit from the government’s Vision 2040, which prioritizes economic diversification, foreign direct investment, and regulatory modernization. These factors are expected to support moderate but steady growth in prices, yields, and transaction volumes through 2025 and beyond.
Future Outlook: Forecasts, Risks & Opportunities (2025–2030)
The future outlook for commercial real estate in Oman between 2025 and 2030 is shaped by a combination of economic diversification efforts, regulatory reforms, and evolving market dynamics. The government’s commitment to Vision 2040 aims to reduce reliance on hydrocarbons, stimulate foreign direct investment, and promote private sector development, all of which have direct implications for commercial property demand and supply.
Recent amendments to real estate laws, such as those enabling non-Omani investors to own properties in designated Integrated Tourism Complexes (ITCs) and usufruct rights in commercial zones, are expected to broaden the investor base and stimulate new project launches. The Ministry of Housing and Urban Planning continues to refine compliance guidelines, focusing on transparency, registration, and anti-money laundering controls in real estate transactions, in line with international standards (Ministry of Housing and Urban Planning).
- Key Forecasts: The Central Bank of Oman projects non-oil sector GDP growth to average 2.5–3% annually through 2030, with real estate and construction among the primary beneficiaries (Central Bank of Oman). This is expected to drive demand for office, retail, and industrial spaces, particularly in Muscat, Sohar, and Duqm.
- Risks: The sector faces risks from global economic volatility, potential oversupply in specific segments (notably office space), and regulatory adaptation to new ownership structures. Effective enforcement of compliance, especially in anti-money laundering and beneficial ownership transparency, will remain critical to maintaining investor confidence (Capital Market Authority).
- Opportunities: Growth prospects are strongest in logistics and warehousing, supported by investments in free zones and port infrastructure, as well as in hospitality and mixed-use developments driven by tourism initiatives. The introduction of Real Estate Investment Trusts (REITs) and digital land registry systems offer further avenues for institutional investment and operational efficiency (Ministry of Economy).
In summary, Oman’s commercial real estate market is anticipated to benefit from structural reforms, economic diversification, and improved regulatory compliance between 2025 and 2030. While market risks persist, proactive legal and policy adjustments position the sector to attract a broader spectrum of investors and occupiers, with particular momentum expected in logistics, tourism-related assets, and technology-driven property solutions.
Resources & Official Contacts for Investors and Stakeholders
Investors and stakeholders exploring opportunities in Oman’s commercial real estate sector benefit from a robust ecosystem of official resources, regulatory frameworks, and governmental support. Below is a curated list of essential contacts and resources to facilitate informed decision-making and ensure legal and regulatory compliance.
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Ministry of Housing and Urban Planning:
Ministry of Housing and Urban Planning is the primary authority overseeing land use, property registration, and urban development. Investors can access information on land allocation, building permits, and regulatory guidelines for commercial projects. -
Ministry of Commerce, Industry and Investment Promotion:
Ministry of Commerce, Industry and Investment Promotion serves as the gateway for foreign direct investment (FDI), business licensing, and investment incentives in Oman. The “Invest Easy” portal simplifies company registration and commercial licensing processes. -
Public Authority for Special Economic Zones and Free Zones (OPAZ):
Public Authority for Special Economic Zones and Free Zones regulates investment and real estate activities within designated economic and free zones, offering unique incentives and streamlined procedures for commercial property development and leasing. -
Muscat Municipality:
Muscat Municipality is responsible for issuing building permits, enforcing zoning regulations, and overseeing commercial property compliance within the capital region. -
Oman Real Estate Association:
Oman Real Estate Association acts as a professional body for licensed real estate brokers and developers, offering guidance on market practices, ethical standards, and dispute resolution. -
Capital Market Authority (CMA):
Capital Market Authority regulates real estate investment funds (REITs) and public offerings related to real estate, ensuring compliance with investment and disclosure laws. -
Oman Chamber of Commerce and Industry (OCCI):
Oman Chamber of Commerce and Industry provides advocacy, networking, and support services for businesses engaged in commercial real estate activities. -
Royal Oman Police – Directorate General of Civil Status:
Royal Oman Police facilitates property registration and verification processes essential for legal real estate transactions.
For the latest regulatory updates, permit procedures, and investment incentives, stakeholders should consult these official channels and consider engaging with registered legal firms for compliance with Omani property and commercial laws.
