In sync with nature

Cyril Piaia, CEO, Muriya Tourism Development, talks to OER’s Mayank Singh about the company’s projects, expected returns and Oman’s emergence as a destination of choice for property buyers. Excerpts:

Tell us about the projects that Muriya Tourism Development is working on in Oman?

Muriya Tourism Development is a joint venture between Omran, a company owned by the government of Oman, and Orascom Hotels and Development of Egypt. Omran holds a 30 per cent stake in the company while Orascom holds the rest. We are the single-largest tourism development company in Oman and will be investing US$900 million in the Sultanate over the next five years. Unlike some other developments in Oman, Muriya is not just building a resort but also a township with facilities like hotels, villas, golf courses and a marina. We are not reinventing the wheel−Orascom has a similar project called Al Guna in Egypt, on which our Jebel Sifah and Salalah Beach projects will be based.

Al Guna is Orascom’s flagship project. It was built out of nothing and now has 12,000-odd people residing there. There are shops, restaurants, three schools, a private airport, a hospital, one mosque and a church in Al Guna.

We are working on four major projects in Oman. Jebel Sifah is 45 kilometres from Muscat and is spread over six million sq. metres. Salalah Beach will be spread over 15 million sq. metres. Sifah has two categories and is priced at US$3,000 per sq. metre and US$ 2,700 per sq. metre, respectively. Salalah prices will be 15 per cent less than this.

Our third project will be in Al Sodah island, which can be reached by speedboat in two hours from Salalah. It is located in the middle of the ocean. It is a pristine location with small beaches and natural surroundings. Sperm whales can also be seen here. We plan to build 40-42 upscale villas there. Each of these villas will have a private beach and will be secluded from adjacent villas. We are working on a new model for the project. The idea is to sell these villas to high networth individuals and to operate them as a hotel in the absence of the owner. This will also help us to maintain the property. These high-end villas will be sold for US$ 4-5 million each. We also have planned a city complex in Muscat.

What is the status of these projects as on date and what kind of timelines are you looking at for their completion?

We have got all the legal permits and environmental clearances for our projects. We have sold some properties in Sifah and Salalah, where we have already started mobilisation work for construction. Mobilisation work entails creating attendant facilities before actual work can start on the project. These include building a sewage system, a power and desalination facility, etc. We have started a permanent housing facility for workers in Sifah and Salalah and hope to set up a big batching plant at Sifah in a month’s time. This plant will provide us with all the concrete required for construction. We expect the construction to start just before June this year.

At Al Sodah, we are working on a soft mobilisation. People need to realise that these are going to be long-drawn projects. To draw a parallel, Al Guna is a project in which work on different phases has been going on for the last 20 years. Similarly, we expect development work in Sifah and Salalah to go on for the next 20 years.

We will be building 62 villas in Sifah and 63 villas in Salalah in the first phase along with 300 to 350 apartments in two years. Both these projects are integrated tourism complexes with a 100-per cent freehold clause.

Sodoh island is relatively less developed. The city complex in Muscat will be spread over 312,000 square metres. The complex was initially planned in Qurm but after Gonu we shifted the site beyond Muscat airport. Since the initial design was planned for Qurm, it is being redesigned to suit our new location. We expect the new design to be ready in the next two months. Since we want to ensure quality, we will concentrate on building phase one before we start selling properties for phase two.

How has the response been to your projects and how do you see Oman shaping up as a tourist destination?

Muriya will be completing a year’s time in Oman in just a couple of days and our experience has been tremendous. Our properties at Sifah were sold off within 48 hours of their official launch. We started with 12 people and our staff strength now stands at 70 people. We expect this number to go up to 100 in a few months. We believe that in our business, people are the real value creators. From tourism point of view, Oman has a number of things going for it. It has natural beauty, great beaches and a lot of options for outdoor sports. The country is safe and stable and we are sure that Oman has a great future. The government’s efforts coupled with projects like The Wave has raised awareness about Oman, particularly in Europe.

What kind of returns can investors look forward to on their investments?

We expect a capital appreciation of 50-60 per cent in all our projects over the next five years. Having land in today’s world is not easy and Oman is such a virgin place that in the next five years there be little land left in Oman.

What kind of returns on investment are you expecting from these projects?

As a company, we are not looking at immediate returns. The philosophy of Naguib Sawiris, Orascom’s Chairman, is to look at long-term returns. The model on which we operate is not about making money by selling land or properties but by operating brands over a period of time. It is more about doing destination management rather than just making money by selling a property. To give you an example, we operate 14 hotels in Al Guna and charge a management fee for doing this. We actually have an Orascom Mayor to look after the town. We will be following a similar revenue model in Oman.

What are the synergies that your tie-up with Omran brings to the table?

We tied up with Omran as we cannot execute projects of this magnitude without the help of the government. Overall, we are working on developing over 32 million sq. metres and this is sure to impact people and the attending infrastructure so we need the backing of the government.

There are a number of integrated tourism complexes coming up in Oman. What would your sales pitch be to a buyer interested in investing his money?

Our projects are superior to anything that is on offer in the market. Let’s take a few comparative examples. At The Wave, the land to built-up ratio is as high as 80 to 90 per cent, while at Sifah and Salalah we will ensure that this ratio is not more than 25 per cent. We are offering villas which will have 75 per cent open area and are 100 per cent freehold. Also, our projects offer more diversity. The Wave has three kinds of villas to choose from while Muriya is giving buyers a choice of 12 types of villas.

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