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Muscat, Oman

Hotel*****

The offering

Co-Own, through an exclusive agreement with ..... the exclusive listing broker for the owner, has been retained to offer for sale the fee-simple interest in the 251-room Hotel (the “Hotel” or “Property”)

The project is completed and the hospitality management company needs to be appointed as the operator of the asset.

Positioned close to a prominent thoroughfare on 18th November St in the northern Al Mouj area in Muscat, Sultanate of Oman, the Hotel enjoys proximity to the prestigious St Regis Hotel and Residences, Muscat Airport and Al Mouj Golf course as well as several exciting developments

Opportunity

Offering entity                                  ABC Capital

Property type                                       Hospitality

Location                          Al Mouj, Muscat, Oman

Purchase                                                 Freehold

Strategy                                          Opportunistic

Objective                                           High-growth

Target hold period                                   10 years

  • Well-built, high-quality asset offered below replacement cost

  • Strategic location proximate to diversified demand drivers such as Muscat Intl. airport, golf course, marina and attractions

  • Premier events facilities onsite with high potential of driving strong demand and F&B revenues

  • Market share upside potential through extensive amenities offerings

  • Opportunity to position the property through the selection of a suitable hotel operator before opening

  • Oman recorded 4 million tourists in 2023, and 2.1 million guests in (3 to 5 star) hotels *

Project valuation

NET asset value                        36.7 mil RO ~ 95.3 mil USD

Price/key                                                              146,215 RO

Price/sqm                                                                 1,278 RO

Aquisition costs                                                  734,000 RO

Annualized gross income*                                    5.3 mil RO

Gross Yield (Gross income/NET value)*                    14.4%

NET Yield (NOI/Gross value)*                                     12.29%

Gross value                               37.4 mil RO ~ 97.2 mil USD

Annualized NOI*                                                     4.6 mil RO

Capital stack

17.175 mil RO

25.762 mil RO

Investor equity

40%

Senior Debt

60%

TOTAL                                                    42.938 mil RO

                                                               100%

Source of funds
Amount
% of Total
Senior loan
25,762,800
60%
GP Equity
3,435,040
8%
LP Equity
13,740,160
32%
TOTAL
42,938,000
100%
LP Equity represents 80% of the total equity amount, while GP will contribute 20% of the total equity amount  
Use of funds
Amount
% of Total
Purchase price
36,700,000
85%
Aquisition fees
3,670,000
9%
Closing costs
1,468,000
3%
CAPEX + Other expenses
1,100,000
3%
TOTAL
42,938,000
100%

Cash returns

NET exit value                                                        40 mil RO

Disposal fees                                                       840,000 RO

NET Exit receipt                                             39,160,000 RO

NET Operating Income                                    4,600,000 RO

Ungeared profit                                                2,300,000 RO

Project returns

Target IRR                                                    16.5%

Target Cash-on-Cash                                    8.1%

Target Cap Rate                                          8.23%

Target equity multiple                                    1.91

NOP Avg                                                      31.1%

Payback                                                  11th year

GOP Avg                                                      39.5%

ROI                                                                 8.5%

Distributions

Total deal equity amount is 17,175,200 RO which is split as follows:

GP through ABC Capital, LLC - 20% (3.4 mil RO) of the total deal equity amount
LP through IP-01, LLC (issuing entity) - 80% (13.7 mil RO) of the total deal equity amount

Capital structure of the issuing entity IP-01 LLC incorporated in Muscat, Oman

GP - 5% (687k RO) as common equity
LP - 5% (687k RO) as common equity
LP - 90% (12.3 mil RO) as preferred equity
The OpCo, Hotel 5star, LLC, is distributing 75% of the cash flows to the issuing Entity, IP-01 LLC, and 25% of the cash flows to the GP entity (ABC Capital, LLC), which is pari passu.*
Distribution are anticipated to start from June 2025
Co-Own Real Tech LTD and its affiliates do not provide any assurance of returns. Returns presented are net of all fees. Please carefully review the Fees and Disclaimers sections for additional information concerning Sponsor’s use or projected returns and fees paid to Sponsor and Co-Own Real Tech LTD
*Distributions are made at the sole discretion of the Sponsor and are not guaranteed. See Operating Agreement to review the distribution language in its entirety.

Overview

This offering represents an exceptional opportunity to acquire a strategically located, cash-flowing, high quality full-service hotel in a fast-growing Al Mouj submarket, and thriving Muscat city, in available unencumbered of debt and management.

While in-place anchors provide for downside protection, significant leasing opportunities provide for upside potential. Experienced Sponsors will be co-investing approximately 29% of the total deal equity.

Risks

Selection of the hotel operator

Detailed CAPEX schedule for being operational ready

Competing supply

Assessment on revenue projections and demand drivers

Oportunitites

Brand recognition and distribution network

Asses income opportunities through retail lease spaces

Exemption from corporate income taxes up to 25 years*

100% foreign ownership

The Deal

Newly constructed and flexible space design aims to capture a wide range of potential hotel operators. 

 

The Property offers ample parking at both buildings, which is a potential demand driver for local tourist and corporates in the market.

​The acquisition of the Property allows the Sponsor to potentially take advantage of the small to midsize corporate clients demand in that market.​​

Located near to one of city's major roads, 18th Nov street, which feeds into Route-1 highway. These provide easy access to Al Mouj Golf course, Muscat Intl Airport, Downtown, and swift entry-exit routes to other large destinations withing the area.

 

​Al Mouj Master planed community* is developed by a joint venture between UAE's conglomerate Majid Al Futtaim, Omran Group government agency, and Oman National Investments Development Company (Tanmia). It includes residences, lifestyle community amenities, business park and 5 hotels.

The Sponsor

ABC Capital and its predecessor has been a developer, owner, and operator of hospitality and retail properties for approximately 40 years.

Track record

Property name

City

Asset type

Acquired date

Sqft

Purchase price

Sale price/

Estimated value

IRR

Courtyard by Marriott

Dubai

Hotel

21.02.2018

85,000

46,000,000

7,1000,000

15.38%

Property summary

Plot area 10,575 sqm

Total BUA 28,713 sqm

No of floors: B + G + 6 floors

Total no of rooms: 251

19 room types (guest room, 1BR, 2BR, 3BR)

Project completition status: 100%

2 Restaurants

Meeting rooms

Shisha lounge

Kids play area

SPA

Swimming pool

Juice bar

Gym

Questions ?

Schedule a call

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