With Dubai back in action and rents on the upsurge, the Northern Emirates are cashing in on the demand for affordable housing away from the bustle, says MRIDULA BHATTACHARYA.
The buoyancy of the UAE’s economy and Dubai’s successful bid to host the World Expo 2020 have had a positive effect on the construction sector in the Northern Emirates, comprising Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah.
The markets, particularly in Sharjah, have witnessed growth in demand for both the residential and commercial sectors, according to real estate consultants.
Dubai’s market has traditionally had an impact on the Northern Emirates: when recession hit and rents were on the decline in Dubai, several tenants from Sharjah and Ajman were lured to Dubai. However, with the market improving, the higher rentals in Dubai are forcing residents to relocate to Sharjah and further afield in search of affordable housing.
Given the demand for affordable housing, many developers are focusing on Sharjah where a number of apartment blocks have been launched, particularly closer to Dubai. Masterplanned cities are also becoming popular with a multitude of new villa schemes emerging on the outskirts of the city, many offering new lifestyle destinations.
Earlier this year, Sharjah Holding – a joint venture of Majid Al Futtaim Group and the Government of Sharjah – launched the Al Zahia freehold community in the heart of new Sharjah just off Sheikh Mohammed Bin Zayed Road. The project comprises villas and townhouses ranging from 2,260 sq ft to 5,005 sq ft conforming to the Breeam (Building Research Establishment Environmental Assessment Methodology) standard environment rating system.
Work is also in progress on the Sahara Complex, on the Dubai-Sharjah Highway, which is being developed by Al Thuriah, a real estate developer in Sharjah (see
The Northern Emirates are also seeing a revival of projects stalled during the recession and a number of new projects launched – although smaller in scale and number compared to Abu Dhabi and Dubai. Ajman, for instance, has seen work restart on projects such as Al Zorah (see separate report), Ajman One and Ajman Pearl projects.
Public sector investments, mainly in Ras Al Khaimah and Sharjah, are also helping keeping the industry buoyant, with both emirates investing heavily in developing their tourism sector. The Ras Al Khaimah government, for instance, is investing $500 million in tourism development projects.
The pace of development in Fujairah and Umm Al Quwain, however, has been slow. Among the key new projects is a residential city in Fujairah with 1,100 residential units, as well as schools, mosques, clinics, parks, shopping malls and a community centre. Announced last month, the 2.2-sq-km Sheikh Mohammad Bin Zayed City will be built at a cost of $380 million under the orders of the UAE President, HH Sheikh Khalifa Bin Zayed Al Nahyan.
Earlier this year, Green Valley Real Estate unveiled a Dh100-million ($27.2 million) villa development in Fujairah. The project was to be launched five years ago but was put on hold due to the downturn, said a report in the Gulf News, quoting Wiaam Mahmoud Rabah, chairman of the company.
Rabah indicated that the construction of a new oil pipeline connecting Abu Dhabi to Fujairah, has boosted economic activity in the emirate, which in turn has increased demand and ultimately, driven new construction activity.
Sharjah is projected to spend $3 billion on projects this year, which is 25 per cent higher than the figure for 2013, according to Meed Projects. The online business development and market analysis tool anticipates some interesting projects in the next five years covering niche sub-sectors such as industrial construction and renewable power generation. Major projects currently under consideration in these sectors include waste management, recycling and waste-to-energy projects worth nearly half a billion dollars.
The emirate is also investing heavily in its transport infrastructure, with $2.3 billion worth of projects planned.
Meanwhile, a new venture called Tilal Real Estate – that will help the establishment, development and management of real estate projects in the emirate – has been set up by Sharjah Asset Management, the investment arm of the government, and Eskan Real Estate Development.
The company’s first project will be Tilal City, a 25-million-sq-ft development along Emirates Road.
Among other developments, Sharjah’s ruler HH Dr Sheikh Sultan bin Mohammed Al Qasimi recently unveiled a number of development projects in Al Dhaid City to be carried out in the coming few years. These include a multi-purpose central market and Seih Al Bardi Preservation Park, both of which are to be opened by the end of next year.
Other projects include the construction of a branch of the University of Sharjah (UoS); the expansion of the four main roads connecting Al Dhaid with Sharjah, Fujairah, Al Madam area and Falaj Al Mualla; the construction of a number of bridges; and two new roads to connect Dibba Al Hisn with Al Raq area, and Khor Fakkan with Sharjah Al Dhaid highway.
Another government entity spearheading development in the emirate is Shurooq – Sharjah’s investment and development authority – which is working on several projects, including Sir Bu Nair Island, Kalba Eco-tourism development, The Heart of Sharjah, Al Bait Hotel and Al Jabal Resort – The Chedi Khorfakkan. The company has also launched projects including Al Montazah Amusement and Water Park, the Al Majaz Waterfront and Al Qasba.
One of its major projects is the Heart of Sharjah, believed to be the first development of its kind and also the region’s biggest heritage project to date. The project is scheduled for completion in 2025, with the first of its five phases already under way to restore historical buildings and construct new structures in line with traditional architecture.
Shurooq is also investing Dh500 million ($137 million) on Sir Bu Nair Island project, which is slated for completion in 2017.
It is also working on the second phase of the Flag Island development, which aims to turn the island into a new tourist destination.
Meanwhile, Shurooq is supporting the emirate’s Roads and Transport Authority in a feasibility study for a metro or a tram network as part of the emirate’s plans for a ‘diversified strategic approach’ to 2020.
RAS AL KHAIMAH
Housing, real estate and tourism development are key focus areas in Ras Al Khaimah, where the $1.8-billion Al Marjan
Island, the first man-made island to be developed in the emirate, continues to see a number of luxury hotel properties coming up.
Among the mega social housing projects in the emirate is a new residential city to be built between the Emirates and Mohammed bin Zayed roads. Scheduled for launch in 2015, the project is being developed under the Sheikh Zayed Housing Programme with an investment of $545 million. Plans for the project, which will provide 2,000 houses for Emiratis, have recently been approved.
In the real estate sector, RAK Properties is developing the Bermuda Villas and Flamingo Villas, two upscale residential communities located in the company’s master development, Mina Al Arab.
Another landmark development is the $164-million Falcon Island project, marine works on which are expected to start soon to create a canal running through the island to allow for the circulation of water from the Arabian Gulf.
The 2.2-million-sq-m island, which is largely natural with some parts reclaimed, will feature 150 luxury villas, including 11 waterfront mansions. Sustainability is a large part of the project, with the island aiming for Platinum Leed (Leadership in Energy and Environmental Design) certification, the highest possible. The island will be partly solar-powered, according a spokesperson for Al Hamra Real Estate Development (Ahred), the developer.
Another eco-friendly project being developed by Ahred is the 305-villa Bayti village, also in Ras Al Khaimah. Work on the first phase of the development comprising 162 villas is progressing on track for completion by the end of 2015.