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Fujairah, the third smallest of the UAE's seven emirates with just about 150,000 inhabitants, has so many things different from its neighbours. Its landscape is rugged and mountainous, it has higher rainfall due to its location along the Gulf of Oman on the eastern coast and it has lower average temperature, which allows more agricultural activities. And while other emirates have been very active in property development, Fujairah's real estate market is relatively subdued and often overlooked by property investors.
Things could be changing as the government's new economic agenda has stimulated increased activity in Fujairah's property market. One realtor describes it as a ''real estate renaissance'', driven by a steady influx of people to the emirate.
The government's economic development programme has helped strengthen various industries, including cement, stone crushing, mining, oil terminals, trading at the Port of Fujairah, construction and tourism. Meanwhile, the flourishing Fujairah Free Zone is strongly benefiting from the emirate's direct access to the Indian Ocean and major shipping routes. The emirate is also known as a cost-effective business destination with cheaper tariffs, quick set-up time and attractive business packages. Since 2007 Fujairah has also been targeting creative media businesses with its media free zone, Creative City.
These developments have led to a steady stream of local and foreign workforce and increased real estate demand. New residents are usually surprised by the quality and size of accommodation in Fujairah. Many apartments and villas are quite new and spacious, and new projects are under way as more people move in.
''The property market in Fujairah is showing continuous growth and progress in both residential and commercial sectors,'' according to Better Homes' recent market analysis. ''A number of residential construction projects like villas, apartments and single homes are in the pipeline, and as this emirate is showing great potential for the travel and tourism, investors have become interested to make huge investments to build resorts, hotels and multi-storey shopping and entertainment complexes.''
Compared with other emirates, Fujairah's property prices have remained stable because of the current economic upswing. Two-bedroom apartments rent out for Dh35,000-Dh55,000 per year, with new and upscale buildings such as Al Rostamani Tower and Al Jaber Tower commanding up to Dh60,000. Free zone apartments are slightly cheaper.
''Fujairah has been witnessing something of a real estate renaissance with strong leasing demand for apartments,'' says John Stevens, Managing Director of real estate company Asteco. ''The government of Fujairah has made significant investment into infrastructure improvements, such as the Fujairah Port and its free zone, to drive economic activity, and this has resulted in increased demand [and] considerable real estate development.''
At the higher end of the residential spectrum, options remain limited. ''Al Jaber Tower and Al Rostamani Tower have positioned themselves as the best addresses in Fujairah over the last few years, with close to full occupancy,'' says Stevens.
Developers are taking notice. Last year some 800 new units came onto the market, while a new development, Mohammad Bin Zayed City, which spans over seven sq km in the Al Hail area behind the emirate's international airport, will deliver 1,100 units by 2018 in phase one — 300 five-bedroom room villas, 700 four-bedroom villas and 100 smaller villas.
Some 3,000 units are planned for the second and third phases. Arabtec Holding has been awarded the Dh1.7 billion contract for the first phase of the self-contained master development.
Another project that will be a draw for property buyers and investors is the Al Dana Island project, developed by Dubai-based Green Valley Real Estate in the Sharm area near Al Aqah in Fujairah's northern coastal region of Dibba. One of the largest artificial islands in the UAE, Al Dana Island will be home to almost 400 three- and four bedroom luxury villas. With presale residential prices starting at Dh2 million, the island development also features parks, a yacht club and a five-star hotel.
Al Dana Island is just 4km from a hotel and resort area at Al Aqah beach, where Abu Dhabi-based developer Eagle Hills will undertake its first project in the UAE, an Address Hotel-branded resort and serviced apartments, and IHG will develop the first InterContinental hotel in the emirate. The area is a short drive away from the popular Deba Al Fujairah villa development at the border with Oman's northern exclave of Musandam.
''We have conceived the project to be a safe, idyllic retreat for both Emirati residents and expatriates who wish to escape the rigours of modern life,'' says Wiaam Mahmoud Rabah, Chairman of Green Valley.
Al Hilal City, an urban development combining residences and tourism facilities jointly developed by the Fujairah government and Fujairah-based Al Hilal Properties, could also stir more investment opportunities in real estate. The ''integrated services city'' is the first of its kind in the emirate and one of the largest such projects in the UAE. It can accommodate more than 70,000 people with more than 15,000 residential and commercial units in the heart of Fujairah City. The total area spans more than 900,000 sq m, comprising 12 districts with over 130 towers rising between 10 and 35 floors for residential, office, hospitality and retail. The largest building, Al Hilal Business Tower, will have 147 office units.
Green landscapes and roads comprise more than 55 per cent of the project. With a total investment of around Dh15 billion, the project, which will also feature rainfall water exchange pipelines and a smart lighting network, is expected to be completed in seven years. Plots had been handed over to investors from 2014.
Another project that started in 2014 is the Dh400-million Fujairah Business Centre, overlooking the Grand Mosque at Fujairah's town centre. Comprising an office tower and a Marriott hotel, the project is scheduled for completion next year. It is developed by Al Taif Investment, a joint venture between Dubai Investments and Fujairah Investment Establishment, the emirate's investment arm.
Mohamed Alassam, Chairman and Managing Director of Dewan Architects, the planner and designer of the project, describes Fujairah Business Centre as a pioneering and landmark project in the emirate.
Fujairah's retail sector is also expanding. The most established mall is Fujairah City Centre, with a wide range of shopping categories, and a Carrefour hypermarket, the largest in the emirate, a cinema and a family entertainment centre. Another shopping centre, Century Mall, boasts more than 130 retail shops, as well as a large super market, entertainment zones, food courts, coffee shops, movie theatres and department stores.
The latest addition is Fujairah Mall, a 35,000-sq-m shopping and entertainment centre with space for 175 retail outlets. The mall opened in December.
Fujairah will also benefit from a new infrastructure programme by the UAE government, which approved earlier this year a funding of about Dh7 billion for infrastructure development in the northern emirates. Projects include housing aid, new residential complexes, roads, schools, health and sports centres and government buildings, according to national news agency WAM.
Property prices in Fujairah could also benefit from a major transport project, Etihad Rail, which could provide convenient access to the eastern seaboard.
Ask the Agent: Is the value of a property is mainly tied to its location?
Source: Arno Maierbrugger, Special to Property Weekly