Published on and written by Cyril Jarnias
For the past few years, Oman’s urban landscape has been transforming at an unprecedented pace. Driven by Oman Vision 2040, the country has embarked on a series of large-scale projects touching everything: new cities, reinvented neighborhoods, public transport, redesigned coastlines, and experimental sustainable towns. The goal is twofold: to accommodate rapid population growth while moving away from an economic model based on hydrocarbons.
Behind the ambitious architectural projects, urban development in Oman pursues strategic objectives: attracting investment, generating employment, preserving local cultural identity, and adapting to climate challenges. These projects are reshaping the sultanate’s economic and social landscape.
An Urban Strategy Anchored in Oman Vision 2040
The starting point is Oman Vision 2040, the national roadmap guiding all public policies between 2021 and 2040. The document emphasizes several key ideas that directly inform urban projects: economic diversification, environmental sustainability, empowering the private sector, and territorial rebalancing among governorates.
Complementing this overarching vision are more technical tools, such as the Oman National Spatial Strategy (ONSS), the National Urban Development Strategy, and the Greater Muscat Structural Plan. These frameworks provide the blueprint: where to build, at what density, for which uses (logistics, residential, tourism, industrial), and how to connect roads, ports, special economic zones, and new cities.
The country currently has about 5.3 million inhabitants, with an ambitious population growth target.
The real estate market is following suit: the value of transactions reached over OMR 3.1 billion by the end of November 2024, representing an increase of more than 28% year-on-year, while mortgage contracts surged by nearly 45%. The construction sector, valued at OMR 3.9 billion in 2024, is expected to grow at a steady pace until around 2028.
In this context, several urban projects have become showcases for Vision 2040. Three in particular are drawing significant attention: Sultan Haitham City, the redevelopment of Al Khuwair in Muscat, and new central hubs like Yiti or the future city of Salalah.
Sultan Haitham City, Showcase of the Omani “Smart City”
Sultan Haitham City holds a unique place in the country’s urban project landscape. Located in Al-Seeb, west of Muscat, this new 14.8 km² city is conceived as the sultanate’s first fully planned, integrated “smart city”.
A City for 100,000 Residents, Designed from the Start to Be Sustainable
The master plan, designed by Skidmore, Owings & Merrill (SOM) and funded by the Oman Investment Authority, aims to host 100,000 residents in 20,000 housing units. The city is divided into 19 integrated neighborhoods, connected by a network of height-limited streets: most buildings would be six stories or less, to remain in line with Muscat’s relatively low-rise character, which authorities do not want to transform into a “new Dubai.”
One of its strong features is the city’s green spine: a 7.5 km dry wadi transformed into a central park, covering 1.64 million m², serving both as a recreational space and a natural flood management system. In total, 2.9 million m² of green spaces are planned.
Around this park, you find all the facilities of a complete city: 39 schools, 11 healthcare facilities, 25 mosques, a 1,200-bed hospital, a university campus, innovation centers, sports zones, and commercial hubs. The goal is to create a dynamic urban center, not a dormitory town, capable of attracting businesses and high-value-added services.
Phasing, Funding, and Project Progress
The development is spread over four major phases, each with its own demographic and land-use targets.
| Phase | Indicative Period | Area (m²) | Housing Units | Target Population |
|---|---|---|---|---|
| 1 | until ~2030 | 5,000,000 | 6,743 | ~? (tens of thousands) |
| 2 | ~2028–2035 | 2,600,000 | 4,200 | > 23,000 |
| 3 | ~2033–2040 | 2,300,000 | 3,500 | > 21,000 |
| 4 | ~2038–2045 | 5,500,000 | 4,500 | > 26,000 |
From the first phase alone, over OMR 1.9 billion in partnership agreements have been signed for the residential neighborhoods, and more than 67% of the units placed on the market have already been sold. Oman Arab Bank offers competitive housing loans, enhancing the project’s accessibility for Omani households.
On the ground, earthworks and leveling are complete. Main road axes, underpasses, utility networks, and bridges are advancing, as are the power plant (about 30% complete) and the city’s smart control center, reported to be over 85% complete.
A Smart City with an Omani Flavor
The project aims to be a local response to the “smart city” trend. This translates into a network of sensors to monitor air quality, traffic flow, and consumption, as well as mobility choices: a 3.4 km boulevard prioritizing pedestrians and public transport, 32 km of primary roads, 150 km of bike paths, and a planned mass transit system to link the new city to old Muscat.
Environmentally, the city relies on solar energy, wastewater treatment and reuse, and waste-to-energy. The urban planning optimizes building orientation to create natural shade and capture breezes. The architecture, described as “culturally sensitive,” draws inspiration from Omani forms and materials while adapting to contemporary energy constraints.
On Oman’s scale, Sultan Haitham City is also a testing ground for more compact, better-serviced, and less car-dependent urbanism, in a country where the share of public transport trips remains very low and where private cars account for 60% of the transport sector’s emissions.
Muscat Reinvents Itself: From the Ruwi Business District to Al Khuwair’s New Waterfront
If Sultan Haitham City illustrates the creation of a new city ex nihilo, Muscat is also seeing some of its historic or central districts undergo a more radical modernization. This is the case for the Ruwi business district and, especially, the ambitious Al Khuwair Downtown project, designed by Zaha Hadid Architects.
Ruwi Business District: Modernizing the Historic Commercial Heart
Long considered the commercial heart of Muscat, the Ruwi area suffers from aging buildings, pedestrian-unfriendly roadways, and a lack of public spaces. Muscat Municipality has launched a redevelopment project covering about 360,000 m², awarded to a contractor via a tender.
The planned interventions are significant: over 100,000 m² of pedestrian pathways, 6,500 m² of planted green spaces, new shaded and rest areas, and nearly 2,458 new parking spots. Service kiosks, modern sanitation facilities, and “smart” infrastructure are meant to improve daily use of the area while enhancing its commercial appeal.
| Key Indicators – Ruwi Business District | Approximate Value |
|---|---|
| Project Area | 360,000 m² |
| Pedestrian Paths | 101,806 m² |
| Green Spaces | 6,500 m² |
| New Parking Spaces | 2,458 |
| Execution Duration | 16 months |
The municipality’s stated goal is to improve infrastructure and services, but also to revive Ruwi’s role as a business hub in a landscape where new centers (Madinat Al Irfan, Al Mouj, Sultan Haitham City) are gaining prominence.
Al Khuwair Downtown: When Muscat Allows Some Skyscrapers
A different scale, a different logic at Al Khuwair. Here, the Ministry of Housing and Urban Planning (MoHUP) has tasked Zaha Hadid Architects with the complete reconfiguration of this strategic waterfront area of the capital. Announced budget: around $1.3 billion for about 3.6 million m², with a capacity for 64,500 residents.
The project’s originality lies in combining intense vertical densification (35 to 40-story towers) with the restoration and integration of natural infrastructure. Old wadis are recomposed into canals and promenades, and a highway is transformed into a landscaped corridor.
The plan includes five major sectors: a marina, recreational promenade, pedestrian pathway along a canal, cultural quarter, and a ministerial campus. Existing government buildings are to be rehabilitated with a strong emphasis on material reuse, stormwater management, reduction of heat islands, and integration of rooftop solar.
The project integrates a multimodal strategy to become an essential link in Muscat’s future transport system.
Integration of tram or light rail lines for efficient urban mobility.
Development of rapid buses and Bus Rapid Transit corridors.
Implementation of water taxis for an original transport alternative.
Creation of a comprehensive network of bike lanes and pedestrian streets.
Designed to integrate with the future Muscat Metro and overall transport system.
| Al Khuwair Downtown – Key Components | Main Data |
|---|---|
| Total Area | ~3.6 million m² |
| Target Population | ~64,500 residents |
| Maximum Tower Height | 150 m (35–40 stories) |
| Estimated Cost | ~$1.3 billion |
| Planned Functions | Residential, offices, ministries, culture, leisure, marina |
Along the way, the project symbolically transgresses a strong rule of Muscat: height limitations. Authorities have always defended the idea of an “anti-Dubai” capital, dominated by low-rise buildings and local architecture. Al Khuwair becomes a deliberate exception here, justified by the concentration of jobs and services, but also by the need to accommodate part of Muscat’s population growth without endlessly encroaching on the coastline and mountains.
Yiti and Sustainable Cities: An Open-Air Climate Lab
Among the major urban projects, the Yiti cluster, south of Muscat, holds a singular place. It combines a pioneering sustainable city project, The Sustainable City – Yiti, with high-end tourism and residential developments, like AIDA or Marriott residences.
The Sustainable City – Yiti: Towards a Low-Carbon Community
The Sustainable City – Yiti (TSC Yiti) is presented as Oman’s first “net zero” city and ultimately the largest operating sustainable community in the Middle East. Developed jointly by OMRAN Group (the public tourism arm) and Diamond Developers via the SDIC company, the project covers about 11 km² some thirty kilometers south of Muscat.
The first phase, with a cost close to $1 billion, spans 1.43 km² and includes 1,657 housing units (300 villas, 1,225 apartments, 132 serviced residences). The entire community is ultimately meant to offer over 3,000 units, for about 10,000 residents and visitors.
Beyond the number of homes, it’s the depth of the environmental commitment that stands out. TSC Yiti aims for:
Reduction in per capita carbon footprint compared to a typical Omani neighborhood thanks to near-total reliance on solar energy and decarbonized mobility.
The city incorporates a vegetated “spine” with biodomes and community gardens, an equestrian center, a “green” mosque, schools, clinics, hotels, and a mall. This model is directly inspired by the Sustainable City established in Dubai in 2016, but adapted to Oman’s topographic and climatic context.
Number of jobs created during the project’s construction phase, illustrating its immediate economic impact.
AIDA, Marriott, Trump: The High-End Showcase of Yiti’s Coastline
A few kilometers away, another project draws attention: AIDA by Dar Global, a luxury residential and golf development, located 130 m above sea level, facing the Gulf of Oman. With an estimated investment of $2.4 billion, AIDA plans villas and mansions with 3 to 7 bedrooms, a Trump International Golf Club, and several ultra-high-end components, including Marriott residences and a Trump-branded hotel-residences.
These projects fall under Oman’s model of Integrated Tourism Complexes (ITC), zones where foreigners can acquire property with full ownership. For the government, they serve as magnets for international capital and tourists, while injecting demand into the construction and real estate sectors. The advertised prices — often starting at $200,000 for apartments and more for villas — reflect this positioning.
From an urban perspective, the challenge is to avoid juxtaposing isolated luxury enclaves disconnected from the wider territory. The Yiti masterplan precisely attempts to link these pockets to a broader urban framework, in terms of roads, public beaches, and shared infrastructure.
Salalah, Dhofar, and the Rise of New Central Hubs
While Muscat concentrates a large share of major projects, Oman Vision 2040 bets on a “geographically balanced” development. Several regional cities, chief among them Salalah, are seeing large-scale urban programs emerge.
New City Salalah Waterfront: A Coastal City for 60,000 Inhabitants
In the Dhofar Governorate, New City Salalah illustrates this shift. Developed by Sasaki Associates for the Ministry of Housing and Urban Planning, the master plan covers 7.3 km² and aims to create over 12,000 housing units for about 60,000 residents, under the Greater Salalah Structural Plan.
The city is divided into four pedestrian-friendly neighborhoods designed so each resident can walk to essential services in minimal time. It offers 3.5 million m² of green spaces, 200,000 m² of retail, 100,000 m² of cultural facilities, two hospitals, and a pedestrian marina. A major feature is its continuous six-kilometer public beach, responding to the demand for better free access to the coastline.
| New City Salalah – Key Parameters | Value |
|---|---|
| Total Area | 7.3 km² |
| Target Residents | ~60,000 |
| Housing (Phase 1) | 5,827 |
| Green Spaces & Parks | 3.5 million m² |
| Public Beach | 6 km |
| Retail | 200,000 m² |
| Cultural & Public Facilities | 100,000 m² |
The site, located by the sea, is subject to the khareef monsoon and potential sea-level rise. The project therefore incorporates a suite of coastal resilience solutions: wetland parks, natural protection structures (revetments, vegetated dikes), stormwater and flood management, to limit the impact of storms on the city. Here too, the link with Oman Vision 2040 is clear: to show that future coastal developments can reconcile urbanization and climate adaptation.
Salalah, the country’s second city, already welcomes over one million visitors annually, especially during the khareef. Projects like Spray Boulevard — a 470,000 m² development with markets, botanical gardens, and suspended walkways, for over $100 million in investment — complement this strategy by enhancing the leisure and retail offering.
Jabal al Akhdar and Al Jabal Al Aali: Mountain Towns as New Hubs
The urban diversification movement is not limited to coastlines. On the Jabal al Akhdar plateau, a massive $2.4 billion project is set to create a mountain community capable of hosting 8,000 permanent residents and over 4,000 visitors per day, with a wellness village and hotel structures. The altitude (2,400 m) makes it a natural climate refuge, in a country where summers are becoming increasingly extreme.
This is the amount, in millions of OMR, of aggregated investments for the Al Jabal Al Aali City project in the Al Dakhiliyah region.
A’Thuraya City, Madinat Al Irfan, and the New Integrated Districts
Alongside the iconic megaprojects, a constellation of integrated towns and districts is taking shape, often less publicized but essential for absorbing the demand for housing and jobs.
A’Thuraya City: An Intermediate Town in Bausher
In the Bausher wilayat, within the Muscat Governorate, A’Thuraya City embodies the idea of a planned “intermediate” town. The first phase covers over 3 million m² and is meant to house more than 8,000 residents spread across eight integrated neighborhoods. The level of detail is already advanced: 20% of site preparations are complete, and over OMR 38.2 million is committed to infrastructure, including OMR 25 million for Neighborhood 8 and over OMR 240 million for Neighborhood 6, supplemented by OMR 6 million in consulting services.
The A’Thuraya project aims to create a complete district (housing, services, roads, green spaces) on a modest scale, directly connected to Bausher’s existing fabric. It offers an attractive alternative between the city center and the distant periphery, thus helping to decongest Muscat.
Madinat Al Irfan: “City of Knowledge” and Next-Generation CBD
Near Muscat International Airport, Madinat Al Irfan illustrates the rise of new integrated business centers. Spanning over 7.4 million m², this future CBD will mix offices, residential quarters, shopping malls (including the already operational Mall of Oman), hotels, and public spaces.
This hub is set to host 280,000 residents and generate 90,000 jobs, making it one of the most structuring urban projects for the Muscat metropolitan area.
Madinat Al Irfan (City of Knowledge)
A National Transport Network to Support the New Cities
No massive urban development holds without a solid transport system. Here too, Oman has revised its approach, adopting a National Transport Strategy for the horizon 2040 and a specific Transport & Logistics Strategy 2021–2025. The idea: to move from a car-dominated country to a much richer multimodal system.
Muscat Metro and Bus Rapid Transit Networks
One symbol of this transition is the Muscat Metro project, a mass transit system of 50 to 55 km, planned to link Sultan Haitham City to Ruwi via the airport, Seeb, and Muttrah. The route would have between 36 and 42 stations, at an estimated cost of $2.6 billion. The project is still in the feasibility study phase, with a dedicated team since 2023 and the prospect of hiring a project management consultant.
Authorities plan a gradual ramp-up of public transport. The public operator Mwasalat, which already has over 100 city buses and 320 minibuses, will first densify bus lines. Then, Bus Rapid Transit corridors will be implemented in Muscat, Sohar, and Salalah. Metro or tram-type solutions will only be introduced as a final step, in line with the 2015-2040 plan.
The goals are ambitious: to increase the public transport market share from 5% to 16%, reach one million passengers per day on the networks, dedicate 25% of main arteries to collective modes, and reserve 40% of street space for pedestrians. In the background is the climate challenge: transport accounts for 18% of the country’s CO₂ emissions, and the state wants to green its fleets (biofuels, electric buses, hydrogen for long distances).
A Rail Network to Connect Cities, Ports, and Borders
Beyond Muscat, Oman plans a national rail network of over 2,100 km, designed for passenger trains capable of speeds up to 350 km/h and freight trains up to 200 km/h. This network would link Sohar, Muscat, Duqm, Salalah, and the borders with the UAE and Yemen, with 46 stations, eight marshaling yards, and nine intermodal terminals.
Length in kilometers of the Oman–UAE Railway project (Hafeet Rail) linking Sohar to Al Ain and Abu Dhabi.
On the road, infrastructure like the Batinah Expressway (256 km, eight lanes, over $2.5 billion investment) complements this network, connecting Muscat to the Emirati border while traversing regions where new neighborhoods, industrial zones, and new towns are emerging.
Cities as Levers for Economic Diversification
It would be tempting to read these projects solely through the prism of urban planning. But they are also key pieces in the economic diversification strategy.
Real Estate, Tourism, Industry: Cities as Platforms
The residential real estate market is already worth nearly $5 billion in 2025 and could reach over $6.7 billion by 2030, according to several analyses, with an average annual growth around 7%. The commercial sector (offices, retail, logistics, hotels) follows a comparable trajectory. Projects like Sultan Haitham City, Al Khuwair Downtown, or Madinat Al Irfan create the office, retail, and housing supply needed for the non-oil sectors that Vision 2040 aims to develop: tourism, services, digital economy, and processing industry.
The investment volume in integrated tourism complexes in Oman is approximately $11.4 billion.
| Examples of ITCs / Major Developments | Main Functions |
|---|---|
| Al Mouj Muscat | Residential, marina, golf, hotels, retail |
| Jebel Sifah | Residential, golf, marina, hotels |
| Hawana Salalah | Residential, resorts, marinas, leisure |
| Muscat Bay | Residential, resorts, nature, beach |
| Yiti / AIDA / TSC Yiti | Sustainable city, luxury resorts, golf, marina |
On the industrial and logistics side, zones like the Special Economic Zone at Duqm (SEZAD) — 2,000 km², several billion dollars invested in a 230,000 barrel/day refinery, a $550 million port expansion, a Sino-Omani industrial city of over 1,100 hectares — or the Sohar Free Zone (with the $1.6 billion United Solar Polysilicon plant) in turn generate needs for towns and districts to house workers, managers, and service providers.
International Attractiveness and Regulatory Reforms
To finance these transformations, Oman is relying on legal and fiscal reforms. The Foreign Capital Investment Law allows 100% foreign ownership in many sectors, abolished the mandatory minimum capital, and simplified procedures. A new specific framework for real estate is being prepared, while a long-term residency visa scheme linked to real estate investment (starting from OMR 250,000 for certain schemes) is now in place.
Over OMR 600 million in foreign investments were mobilized in the first wave of projects supported by the Future Fund Oman.
Rating agencies have praised this trajectory: Oman regained an investment-grade status from S&P (BBB–), while Fitch and Moody’s have raised their ratings since 2020. The economic freedom index, environmental performance, and e-government scores all show significant improvements between 2021 and 2024.
Greener Cities in a Country Committed to Net Zero
Underlying all these urban projects is a clear climate commitment: to achieve carbon neutrality by 2050, with an interim target of 30% of electricity from renewable sources by 2030, and a massive effort on green hydrogen.
Urban Planning, Energy, and Resource Management
Urban development is becoming a privileged testing ground for these priorities. Projects like TSC Yiti or Sultan Haitham City incorporate from the design stage district cooling systems, rooftop solar, smart grids, water recycling, and material reuse streams.
Oman has planned 212 projects and initiatives to reach its carbon neutrality goal by 2025.
Urban transport is not forgotten: development of electric buses, metro and BRT projects, promotion of cycling, multiplication of charging stations (over 80 public stations recorded), tax exemptions for “green” vehicles. In Muscat, over 13,000 smart LED streetlights have been installed, reducing public lighting consumption by up to 85%.
A Diplomacy of Sustainability
Finally, these sustainable cities and districts are part of an image strategy. Oman is multiplying cooperation with international institutions (World Bank, IFC, MIGA), hosting events like Oman Sustainability Week, and showcasing its progress in rankings like the Smart City Index (Muscat moved from 96th to 88th place) or the Environmental Performance Index (34th globally with a score of 64.5).
Estimated investments in green hydrogen via the public entity Hydrom as part of energy partnerships.
Between Promise and Challenges: Succeeding in the Urban Transition
Faced with the scale of these transformations, several challenges nevertheless remain present.
First, the question of occupancy of the existing housing stock: estimates put the number of vacant homes in Muscat at about 87,000, or nearly 20% of the supply. The challenge is to avoid a speculative spiral where more and more is built further away and higher without resolving current market imbalances.
Oman’s economic diversification is progressing slowly, hindered by governance weaknesses, policy fragmentation, and hydrocarbon-linked budgetary constraints. The realization of ambitious urban plans requires enhanced coordination between ministries, governorates, operators, and investors.
Finally, the social dimension: while Oman boasts a very high homeownership rate among its citizens and a system of free land plots, the wait can be long and these plots are often far from central hubs. The bet of new towns and integrated districts is to offer attractive alternatives, including for middle and lower-income classes, via affordable housing programs, public-private partnerships for popular neighborhoods (a PPP “envelope” of $1.3 billion is planned for low- and middle-income communities), and strengthening specialized banks like Oman Housing Bank.
Despite these challenges, one thing is clear: Oman has chosen to make the city one of the main instruments of its economic and environmental transformation. From Sultan Haitham City to the reinvented waterfronts of Muscat and Salalah, through the sustainable communities of Yiti or the mountain hubs of Jabal al Akhdar, the sultanate is testing new urban models on a large scale. The success of these experiments, in the next fifteen years, will say much about the country’s ability to succeed in its Vision 2040 and find its own path among the Gulf’s metropolitan areas.
Disclaimer: The information provided on this website is for informational purposes only and does not constitute financial, legal, or professional advice. We encourage you to consult qualified experts before making any investment, real estate, or expatriation decisions. Although we strive to maintain up-to-date and accurate information, we do not guarantee the completeness, accuracy, or timeliness of the proposed content. As investment and expatriation involve risks, we disclaim any liability for potential losses or damages arising from the use of this site. Your use of this site confirms your acceptance of these terms and your understanding of the associated risks.
Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
