Oman Commercial Construction Market By Sector (Healthcare & Medical Facilities, Educational Institutions, Hospitality, Retail Outlets, Corporate Offices, Others), By Construction Type (New Construction, Renovation, Repair & Maintenance), By End-User (Private, Public), By Region, Competition Forecast & Opportunities, 2020-2030F

Market Overview

Oman Commercial Construction Market was valued at USD 21.5 Billion in 2024 and is expected to reach at USD 26.82 Billion in 2030 and project robust growth in the forecast period with a CAGR of 3.6% through 2030. The Oman Commercial Construction Market is experiencing steady growth, driven by government initiatives focused on economic diversification and infrastructure development under the Oman Vision 2040. As the country shifts away from oil dependency, significant investments are being made in sectors such as tourism, retail, and industrial infrastructure, contributing to the rise of commercial construction activities. Key projects include the development of office spaces, shopping malls, hotels, and transportation hubs, as the demand for modern commercial spaces continues to grow.

Oman's strategic location and its efforts to position itself as a regional business and tourism hub further fuel the market's expansion. The government's commitment to enhancing the country’s infrastructure is evident through large-scale projects, such as new airports, road networks, and logistics facilities, all of which support the commercial real estate sector. Additionally, public-private partnerships (PPP) are playing a critical role in accelerating development in both urban and rural areas. The market is also benefiting from increasing foreign direct investments, which are further driving demand for commercial spaces. As Oman moves towards greater economic diversification and sustainable development, the commercial construction market is expected to continue to grow, offering ample opportunities for investors and developers alike.

Key Market Drivers

Economic Diversification under Vision 2040

Oman’s Vision 2040 is a key driver of the commercial construction market, as the government aims to reduce its reliance on oil revenues and diversify the economy. Vision 2040 outlines a comprehensive plan to develop sectors like tourism, manufacturing, logistics, and agriculture, all of which require substantial infrastructure development. As part of this diversification strategy, Oman is investing in various commercial construction projects, including office buildings, retail spaces, hotels, and industrial zones. The development of commercial real estate is essential to attract foreign investments, create jobs, and improve the overall business environment. With these initiatives, Oman is positioning itself as a regional hub for commerce and trade. As new business sectors emerge and existing ones expand, the demand for modern, flexible office spaces and commercial properties continues to rise, contributing to a sustained growth trajectory in the commercial construction sector. The government’s emphasis on creating a business-friendly environment, such as streamlining regulations and enhancing connectivity, also plays a pivotal role in boosting investor confidence, further driving the construction market forward. In this context, construction firms are increasingly involved in large-scale projects, ranging from mixed-use developments to state-of-the-art commercial facilities that cater to the evolving needs of businesses and residents alike. Vision 2040 is a strategic blueprint that aims to achieve a diversified GDP, with non-oil sectors expected to account for 80% of Oman’s GDP by 2040.

Government Infrastructure Projects

The Omani government's focus on infrastructure development is another crucial driver behind the growth of the commercial construction market. With substantial investments in transportation, energy, and utilities, Oman is enhancing its infrastructure to support the country’s economic diversification goals. Major projects include the construction of new airports, seaports, road networks, and public transport systems, all of which play an integral role in improving connectivity and facilitating business operations. As infrastructure development accelerates, the need for commercial properties such as office buildings, retail outlets, and logistics centers rises to support the growing population and increasing business activities. These infrastructure projects also attract foreign direct investment, which in turn boosts demand for high-quality commercial real estate. Additionally, the expansion of Oman’s tourism sector requires the development of hotels, resorts, and related facilities, further driving the commercial construction market. The government's emphasis on smart city initiatives, such as the development of sustainable and technologically advanced urban spaces, also contributes to the demand for innovative commercial properties. With a strong focus on modernization and future-proofing, these infrastructure developments create a favorable environment for commercial construction, driving growth in both urban and peripheral areas. Oman is targeting to increase the contribution of tourism to GDP, aiming to attract 11 million tourists annually by 2040. This will drive the demand for commercial infrastructure like hotels, resorts, and leisure facilities.

Growth of the Tourism Sector

Oman’s tourism sector has witnessed significant growth, and it is poised to be a major contributor to the commercial construction market. The country’s rich cultural heritage, diverse landscapes, and commitment to sustainable tourism have made it an attractive destination for international tourists. The government has recognized the potential of tourism as a key sector in its Vision 2040 and has therefore allocated substantial resources toward its development. This includes the construction of hotels, resorts, and leisure facilities, all of which are driving demand for commercial construction. Furthermore, Oman is focusing on the development of infrastructure that enhances the tourism experience, such as airports, roads, and recreational centers. The development of mixed-use projects that combine retail, hospitality, and entertainment facilities is also gaining traction, responding to the changing preferences of tourists who seek integrated, all-in-one spaces. As the tourism sector grows, both foreign and domestic investments in commercial properties will continue to increase, creating opportunities for developers to capitalize on this expanding market. The government’s efforts to promote tourism are expected to attract more international investors and construction companies, further fueling the demand for high-end commercial developments, and establishing Oman as a key player in the regional tourism landscape. Oman aims to expand its manufacturing and industrial base, increasing the sector’s contribution to GDP from 10% to 20% by 2040.

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Key Market Challenges

Fluctuating Oil Prices and Economic Volatility

One of the primary challenges facing the Oman Commercial Construction Market is the country's vulnerability to fluctuating oil prices, which significantly impact the national economy. As a major oil producer, Oman heavily relies on oil revenues, and any downturn in global oil prices can lead to budgetary constraints, delays in government-funded projects, and reduced investments in infrastructure and commercial construction. This volatility often leads to uncertainty in project financing and cash flows, particularly for large-scale developments that require substantial upfront capital. Additionally, global economic conditions, such as recessions or trade disruptions, can exacerbate the situation, leading to reduced demand for commercial properties. Developers and investors may become more cautious, and financing may become more difficult to secure, resulting in stalled or postponed projects. To mitigate this challenge, the Omani government has been focusing on economic diversification under its Vision 2040, aiming to reduce dependency on oil by promoting sectors like tourism, manufacturing, and logistics. While these efforts are ongoing, the market remains susceptible to oil price swings, and developers must adopt flexible strategies to manage costs, seek alternative financing models, and ensure that their projects align with the country’s long-term economic goals to navigate this challenge effectively.

Regulatory and Bureaucratic Challenges

Another significant challenge in the Oman Commercial Construction Market is the complex regulatory environment and bureaucratic processes that developers must navigate. While the government has made efforts to streamline regulations, the approval process for commercial construction projects remains time-consuming and often subject to multiple layers of permits and inspections. Developers face delays in obtaining building permits, land-use clearances, and environmental approvals, which can increase costs and extend project timelines. Additionally, the lack of clear and consistent guidelines on certain aspects of construction, such as zoning laws and building codes, can cause confusion and inconsistency in project execution. These regulatory hurdles often discourage foreign investors and developers, as the unpredictability in timelines and requirements can deter capital investment. Furthermore, the administrative burden, especially when dealing with various government departments, adds a layer of complexity to project management. To overcome these challenges, there is a need for further regulatory reforms that simplify the process and provide clearer guidelines for developers, enhancing transparency and reducing delays. In recent years, Oman has taken steps to address these issues by implementing digital platforms for permit applications and improving coordination between various government entities, but progress remains slow. Therefore, a more efficient and streamlined regulatory environment is critical for sustaining the growth of the commercial construction market in Oman.

Skilled Labor Shortage

The shortage of skilled labor is another key challenge affecting the Oman Commercial Construction Market. While the country has seen an influx of workers from neighboring countries, the demand for specialized skills, particularly in modern construction technologies and high-end building materials, often exceeds the available workforce. Many construction projects, particularly in commercial real estate, require highly skilled workers, including architects, engineers, and project managers, to ensure that the development meets international standards for quality and safety. The lack of local skilled labor further exacerbates the reliance on foreign workers, which can lead to higher costs and potential delays, especially if geopolitical or economic factors disrupt the flow of expatriate labor into the country. Furthermore, training and upskilling programs are not always aligned with the fast-evolving needs of the commercial construction sector, leaving a gap between industry requirements and the available workforce. To address this challenge, Oman needs to focus on developing a robust domestic talent pool through educational and vocational programs, while also attracting skilled foreign labor. Additionally, the adoption of automation and construction technologies could help mitigate labor shortages by reducing dependency on manual labor. While Oman has made progress in improving its educational infrastructure, the commercial construction market still faces significant challenges in bridging the skills gap and ensuring a steady, qualified workforce for ongoing and future projects.

Key Market Trends

Increasing Demand for Mixed-Use Developments

One of the most prominent trends in the Oman Commercial Construction Market is the growing demand for mixed-use developments, driven by urbanization and changing consumer preferences. Mixed-use projects that combine residential, commercial, retail, and leisure spaces are gaining traction, as they provide convenience and efficiency for both businesses and residents. The government's focus on sustainable development, coupled with a rising population in cities like Muscat, has created a demand for integrated communities where people can live, work, and play within the same vicinity. These developments cater to the needs of modern lifestyles, offering everything from office spaces to entertainment venues and retail shops in a single location. This trend is further supported by Vision 2040, which emphasizes urban development and infrastructure improvement to enhance the quality of life. The demand for such developments is not only driven by local needs but also by foreign investors seeking to capitalize on the country’s stable economic environment and strategic location. As more businesses expand and tourism continues to grow, mixed-use developments are becoming a preferred choice for developers, as they offer higher returns on investment and a more diversified revenue stream. Additionally, these developments align with the global trend of creating smart cities, integrating sustainable design and advanced technologies to meet the needs of the modern urban population. The rise of mixed-use developments is expected to continue as Oman further invests in modern infrastructure and adapts to evolving urban needs. The Omani government is expected to invest around USD 20 billion over the next decade in sectors like logistics, manufacturing, and tourism to diversify the economy and create new opportunities for commercial construction.

Focus on Sustainable and Green Building Practices

Sustainability has become a key trend shaping the Oman Commercial Construction Market, with an increasing focus on green building practices and eco-friendly construction methods. The growing awareness of environmental issues, coupled with the Omani government’s commitment to reducing the country’s carbon footprint as part of its Vision 2040 objectives, has driven the adoption of sustainable construction techniques. Green buildings, which are designed to minimize energy consumption, reduce water usage, and incorporate renewable energy sources, are becoming more prevalent across commercial developments. The demand for such buildings is largely driven by both government regulations and the private sector's growing awareness of corporate social responsibility (CSR) and environmental stewardship. Oman’s regulatory framework, which includes building codes that promote energy efficiency and sustainability, is encouraging developers to adopt green building standards. This includes the use of sustainable materials, energy-efficient systems, and waste reduction strategies, making construction projects more cost-effective in the long term by lowering operational costs. Additionally, the international trend toward environmental sustainability is influencing investor and tenant preferences, as businesses increasingly prioritize eco-friendly office spaces that align with their sustainability goals. As part of Vision 2040, Oman aims to increase the share of renewable energy in the country’s energy mix, which further supports the integration of green building practices in commercial real estate. The trend towards sustainable construction is expected to intensify in the coming years, as developers recognize the long-term benefits of reducing environmental impact and meeting the growing demand for energy-efficient buildings.

Growth of the Hospitality and Tourism Sector

The growth of Oman’s hospitality and tourism sector is another key trend driving the commercial construction market. Oman has been positioning itself as a leading regional destination for both leisure and business tourism, making it an attractive market for the construction of hotels, resorts, and other hospitality-related commercial properties. The government’s efforts to diversify the economy under Vision 2040 include promoting tourism as a key pillar of growth, with initiatives designed to attract both international visitors and investment. Large-scale hospitality projects, including luxury hotels, boutique resorts, and convention centers, are being developed to cater to the increasing number of tourists flocking to Oman for its rich cultural heritage, scenic landscapes, and growing event tourism industry. The rise in international and regional business tourism has also spurred demand for high-quality office spaces and conference facilities, further expanding the commercial real estate market. In particular, the Oman Convention and Exhibition Centre in Muscat is one of the country’s flagship projects, reflecting the government’s commitment to expanding the tourism and business tourism infrastructure. As Oman continues to strengthen its position as a tourism hub, the demand for commercial construction in the hospitality sector is expected to grow, providing significant opportunities for developers and investors in both the short and long term. The combination of favorable government policies, ongoing infrastructure projects, and increasing visitor numbers will continue to fuel growth in the hospitality and tourism-related commercial construction market.

Rise of Technology and Smart Building Solutions

Technology and smart building solutions are becoming an essential trend in Oman’s commercial construction market, driven by the need for increased efficiency, safety, and sustainability. As global trends shift towards the incorporation of advanced technologies in building design and construction, Oman is following suit by integrating smart building features into new commercial developments. These smart buildings incorporate Internet of Things (IoT) technologies, which enable automated control of lighting, heating, air conditioning, and security systems, resulting in more energy-efficient and sustainable buildings. The rise of technology in commercial construction is particularly relevant in the context of Oman’s economic diversification efforts, as the country seeks to attract international businesses and investors who expect modern, technologically advanced office spaces. Additionally, the government’s focus on creating “smart cities” as part of its Vision 2040 plan is pushing for the incorporation of digital infrastructure, such as high-speed internet connectivity and real-time data monitoring, into new commercial properties. As businesses look to reduce operational costs and improve sustainability, demand for these intelligent solutions is expected to increase. Furthermore, the use of technology in construction processes, such as Building Information Modeling (BIM), has enhanced project management, reducing costs and improving efficiency. As these technological trends continue to gain momentum, the Oman Commercial Construction Market will see greater innovation and modernization, creating more competitive, future-proof commercial spaces that meet the demands of a tech-savvy, environmentally conscious workforce.

Segmental Insights

Sector Insights

In 2024, the Corporate Offices segment dominated the Oman Commercial Construction Market and is expected to maintain its dominance throughout the forecast period. The increasing demand for modern office spaces, driven by the country’s ongoing economic diversification under Vision 2040, is a primary factor contributing to the prominence of this segment. As Oman continues to shift its focus away from oil dependency, various sectors such as finance, technology, and services are experiencing significant growth, creating an increased need for high-quality commercial office spaces. Muscat, being the business hub of Oman, is seeing a surge in demand for Grade A office buildings with advanced infrastructure and amenities, catering to both local and international businesses looking to establish a presence in the country. The demand is further driven by the rise of start-ups, multinational corporations, and SMEs, all of which require flexible office environments. Additionally, the government's focus on creating a business-friendly environment, coupled with various incentives for foreign investors, supports the need for modern office developments. As businesses require flexible, scalable, and technology-driven spaces, developers are focusing on incorporating smart building technologies and sustainable designs in office spaces, making them more attractive to businesses looking to enhance operational efficiency and reduce long-term costs. While other segments such as Hospitality and Healthcare & Medical Facilities are also growing, particularly with the increase in tourism and the expansion of healthcare services under Vision 2040, the corporate office market remains the largest contributor to the commercial construction market. Given the steady growth of Oman’s non-oil economy, coupled with an increasing number of international businesses setting up operations in the country, the Corporate Offices segment is set to maintain its dominant position, driving substantial market growth over the coming years.

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Regional Insights

In 2024, Muscat dominated the Oman Commercial Construction Market and is expected to maintain its dominance throughout the forecast period. As the capital and economic hub of the country, Muscat accounts for the largest share of the commercial construction market due to its concentration of business activities, infrastructure development, and growing demand for commercial properties. The city’s strategic location, robust economic growth, and ongoing efforts to diversify its economy under Vision 2040 make it the focal point for both local and international businesses. Muscat is home to a significant number of multinational corporations, government offices, and service-oriented businesses, which drives the demand for modern office spaces, retail outlets, and hospitality developments. Additionally, the city’s infrastructure projects, such as the expansion of Muscat International Airport, new commercial and residential complexes, and road networks, continue to stimulate the construction market. Furthermore, with the government's focus on sustainable development and creating business-friendly environments, Muscat sees consistent investment in high-quality office spaces, mixed-use developments, and green building projects. While other regions such as **Dhofar**, **Musandam**, and **North Batinah** are witnessing growth, particularly in sectors like tourism and logistics, Muscat's continued dominance is attributed to its role as the primary center for economic activities, foreign investments, and government projects. The increasing population, expanding tourism sector, and rise in both domestic and international business ventures further support Muscat's position as the leader in the commercial construction market. Given the ongoing infrastructural developments, urbanization, and focus on economic diversification, Muscat will likely maintain its leadership role in the market, driving demand for commercial construction projects well into the forecast period.

Recent Developments

• In Dec 2024, Sarooj Construction Company in Oman has been awarded construction contracts worth a total of $234 million (RO 90.22 million). The new contracts include key infrastructure projects aimed at enhancing the country's development. These projects align with Oman’s ongoing efforts to diversify its economy and strengthen its infrastructure. The awards reflect growing confidence in Sarooj’s capabilities and further solidify its position as a leading player in Oman’s construction sector, contributing to the country's economic growth and expansion.
• In August 2024, Galfar Engineering & Contracting has secured a RO 117 million contract from Nama Water Services. The contract involves critical infrastructure development to enhance water supply systems across Oman. This project aligns with the government's efforts to improve national utilities and strengthen the water distribution network. The award underscores Galfar's strong market position and expertise in large-scale infrastructure projects, contributing to Oman’s broader economic growth and sustainable development objectives.
• In June 2024, Galfar Engineering & Contracting has won a RO 35 million contract for a major infrastructure project in Oman. The contract involves the construction and development of critical utilities and facilities, further strengthening Galfar’s position in the country’s growing infrastructure sector. This award highlights the company’s ongoing success in securing large-scale projects and its capability in delivering high-quality construction solutions. The contract supports Oman’s economic development and infrastructure enhancement goals, particularly in the utilities sector.
• In Feb 2024, Galfar Engineering & Contracting has secured a RO 100 million contract for the PDO’s Qarn Al Alam project in Oman. The contract involves significant infrastructure development and facilities construction to support oil and gas operations. This award reinforces Galfar’s expertise in delivering large-scale projects in the energy sector and strengthens its role in Oman’s industrial growth. The project aligns with the country's strategic objectives to enhance its energy infrastructure and support economic diversification.

Key Market Players

• Galfar Engineering & Contracting SAOG
• Sarooj Construction Company
• Atlantic Construction LLC
• Abrar Middle East LLC
• Oman Gulf Company
• Al Arkan Construction LLC
• Dawood Contracting LLC
• Al Rawahi International Co. LLC
• Al Nab’a Infrastructure LLC
• MNT Construction Company LLC

Report Scope:

In this report, the Oman Commercial Construction Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Oman Commercial Construction Market, By Construction Type:

o   New Construction

o   Renovation

o   Repair & Maintenance

• Oman Commercial Construction Market, By Sector:

o   Healthcare & Medical Facilities

o   Educational Institutions

o   Hospitality

o   Retail Outlets

o   Corporate Offices

o   Others

• Oman Commercial Construction Market, By End-User:

o   Private

o   Public

• Oman Commercial Construction Market, By Region:

o   Muscat

o   Dhofar

o   Musandam

o   Buraymi

o   Dakhiliyah

o   North Batinah

o   South Batinah

o   Rest of Oman

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Oman Commercial Construction Market.

Available Customizations:

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Company Information

• Detailed analysis and profiling of additional market players (up to five).

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