Tide starts to change as buyers catch The Wave

While one huge Omani project has stalled, another looks set to be finished as planned. But both have been afflicted by the global economic downturn.

MUSCAT - 29MAR2011 - Abdulla Khamis al Shidi, deputy chief executive officer of The Wave showing an artist impression of the wave project in Muscat. Ravindranath K / The National

There is a roundabout just before the entrance to the Shangri-La Hotel in Muscat.

If you turn right rather than continuing up the hill, and carry along a road carved out of the rocks for five minutes, you finally reach a left turn.

The road is rutted, but if you can face the shaking you drive along honeycombed sandstone cliffs before eventually reaching the sea.

In front of you is an enormous empty marina, bigger than a football pitch, built out of concrete and paving slabs. It's the sort of place where you could hide a battleship.

Stretching down the coast are more signs of construction and earthworks, large boulders stacked together to keep the sea from washing it away. There is nothing else apart from a seagull flying overhead, the remains of a barbecue and a couple of empty cans that rattle in the wind.

It is rather like the ruins of an abandoned civilisation.

This is Salam Yiti, the site of an ambitious holiday and housing complex, a joint venture between the Oman government and Sama Dubai, that may never be completed. Tens of millions of dollars must have been spent on the earthworks, but for the moment at least, the project is stalled.

Across the other side of the capital, near the airport, another project appears to be progressing as planned.

According to Abdulla bin Khamis al Shidi, the deputy chief executive of The Wave Muscat, the development has withstood the tests of time. Launched in 2005, it was conceived as an ambitious project comprising a marina, a golf course to be designed by Greg Norman, the Australian golfer, with villas, townhouses, apartments and three 5-star hotels and one 4-star hotel.

In 2009, in the wake of the economic crisis, there were no sales. But last year things picked up again.

"I think we were one of only a few projects selling off-plan in the region last year," says Mr al Shidi. The project is now more than 40 per cent completed, although the final work will not finish until 2017 or 2018.

He admits the masterplan was adjusted to the new reality of the market, with designs tweaked to be more "efficient". In other words, smaller. And homes are selling, mainly to Omanis and expatriates living in Oman, along with a smattering of foreign buyers.

One-bedroom apartments are selling for 90,000 Omani rials (Dh858,260), with three-bedroom ones fetching 150,000 rials. Townhouses range from 120,000 rials to 180,000 rials.

Because The Wave is in what has been designed as an "integrated tourism complex" - as Salam Yiti would have been, as well as Blue City, another project along the coast that has also stalled - foreigners are not only allowed to buy but are granted an immediate two-year renewable visa.

The Kempinski Grouphas signed an agreement to manage one of the hotels, as has the Fairmont Group. Mr al Shidi says the golf course will open this year, along with the first phase of the marina. There are already 600 families living in the complex, that will also boast shops and entertainment facilities.

And something good came out of the downturn. "Our construction costs are down by 15 to 25 per cent," he says. "The price of steel has halved."

The Wave is a joint venture between the Omani government, National Investment Funds, and the Al-Futtaim Group, a conglomerate based in Dubai. Mr al Shidi may be happy his project is progressing, but he is not complacent.

"Oman is impacted by what is happening in the region," he says. "But the country has much to offer and there is good potential for real estate in Oman. The secret of our success has been that the shareholders are very clear about the need to deliver what we promised."

Elsewhere in the country, the government is also acting on its promises.

Yesterday the police cleared the roundabout in the city of Sohar, the scene of an Egyptian Tahrir Square-style sit-in. The road had been blocked and traffic flow disrupted. According to the state-run Oman News Agency, a number of people were arrested and anyone suspected of involvement in the riots and vandalism at the end of last month would be put on trial.

As to his own stake at The Wave, Mr al Shidi is still considering that. "I have not bought yet but am thinking of getting something near the marina. I love being on the water."