Located on a natural peninsula, Al Madina A’Zarqa (Blue City) is a 32 square kilometre (12.36 square mile) waterfront city being built along 16 kilometres (9.95 miles) of shoreline adjacent to the crystal blue waters of the Gulf of Oman.

According to the developers, Al Madina A’Zarqa is more than just a resort real estate development; the city is being designed and built to include all the elements needed for a thriving metropolitan community. When complete, the city will be home to 200,000 people who will live, learn, work, relax and play in surroundings that are harmonious with the existing Omani landscape, architecture and culture. The organization behind this farsighted project is Al Sawadi Investment & Tourism Company (ASIT) which has the endorsement of the government of Oman to bring this massive urban development to life.

The project which is conceptualized according to the highest international standards and applies the principles of sustainable development and eco friendly design, aims to attract direct foreign investment and some of the top global players as operators for the facilities. 

Key to the development of Al Madina A’Zarqa will be its sensitivity for Omani culture, Arabian architecture and the environment. Whilst the architecture may favour traditional Arabian designs and themes, this will be married with up-to-the-minute technology and will be built with the environment top-of-mind.  Oman Vistas spoke to Richard Russell, Managing Director & CEO to get the latest update.

What is the current status of Blue City1?
Blue City adopted the Arabic version of its name, Al Madina A’Zarqa earlier this year and construction of phase one of the city is on schedule.
Phase one is a significant element of the twelve phases that make up the city and constitutes 2.2 square kilometers of the entire project, which is slightly larger than the Principality of Monaco. Phase one features more than 5,500 dwellings and will be home to approximately 27,000 residents living in neighborhood communities with schools, retail outlets, doctors’ surgeries, libraries, hotels, restaurants, mosques and other ancillary public services.
To date, three residential districts of the first phase have been offered for sale; Al Murjan, Al Na’man and the luxury  golf villas, all of which have been well received by investors both in Oman and throughout the GCC.

When will the first lot of allotments be made?
The first property handovers will take place during the third quarter of 2010 with completion of the entire phase one by 2012.

How would you differentiate Al Madina A’Zarqa from other integrated tourism projects in the Oman market?
Al Madina A’Zarqa is simply an entirely different scale, scope and offering to other developments in the Sultanate. We are designing and building an entire city; to put this in perspective, the footprint of the project is approximately twice the size of Gibraltar.
 Al Madina A’Zarqa is not a resort; it is a fully functioning metropolis that will draw on six key driving economies of trade, healthcare and medicine, sports and wellness, education, entertainment and tourism. The city will be home to a population of 200,000 people and will create employment opportunities for up to 120,000.  It is a long-term development envisioned to be realized over an approximate 20-year period.

Are people buying properties from an investment point or actually planning to stay?
Both. Property investors in Al Madina A’Zarqa are making decisions that are a combination of planning to live in the city and the long-term investment return on that decision.
 How favorable are the government policies as far as real estate market is concerned in Oman?

Probably the most favourable in the Gulf; the Oman government’s legislation on 100 percent freehold ownership is very transparent and comprehensive. One of the key factors that makes property investment in Oman attractive is the inheritance clause in the statute that ensures the inheritance laws of property owners’ country of domicile apply. We should also mention

 residence visa policy here…, most notably since others are stalling.

How is the Integrated Tourism Real Estate market in Oman, compared to Dubai or other parts in the Gulf?
Oman is a very different proposition to other Gulf countries. Oman is blessed with areas of outstanding natural beauty that stretches from the dramatic Mussandam peninsula to the golden sands of Ash-Sharqiyah. The tourism infrastructure in Oman is not as well developed as say Dubai and this is where Oman’s advantage really lies. We have the opportunity to develop a considered tourism offering that uses the natural environment to its best advantage.

What measures has Al Madina A’Zarqa taken to check any unforeseen calamities like Gonu?
What is important to consider here is that unusual weather patterns and unnatural events are few and far between in Oman. Building and infrastructure design has taken into consideration these extreme events to mitigate adverse impacts.

Do you have any plan in place to protect the environment?
We have numerous policies related to the environment and firmly advocate sustainable best practice in all aspects of the building and functions of Al Madina A’Zarqa.

How much is the price of these properties, how much it has appreciated since it started?
Our experience so far is that Al Madina A’Zarqa has not attracted short-term speculators and people are placing far more intrinsic value to the investment they have made in property rather than purely financial gain. Shouldn’t we add here that our properties are very competitively priced and provide a real value opportunity for our customers.
Will the global meltdown have any affect on the real estate market in Oman?
I cannot speak for the entire property market but what I can tell you is there is no doubt that the current global economic slow down is something that everyone is paying close attention to in the Middle East, particularly within the real estate industry. While it isn’t reasonable to expect the region to be totally immune to the current global financial shock, for Oman, the risks to the economy and financial system appear to be manageable. Current indicators suggest that the Omani national economy will be able to weather this downturn and that there will not be a significant impact on the performance of the Sultanate’s overall economy. Indeed, a recent report published last month by UAE based investment bank Rasmala suggested that despite the relative illiquidity and increased volatility of the Omani market, the sultanate continues to trade at a premium to its peers, with a price to earnings multiple of 14 times 2008 earnings, compared with the GCC average of 10.
Oman continues to benefit from the long term vision of His Majesty Sultan Qaboos Bin Said and the Oman 2020 plan which outlines guidelines to diversify the economy and attract non-tradition business, commerce and tourism to the Gulf state. Al Madina A’Zarqa supports this vision, directly contributing to the sustained economic development of Oman by attracting value enhancing seed investments and making it a catalyst for commercial investment and tourism. The city will be an important component of Oman’s 21st century economy.