Investment climate in the northern emirates

A golf villa in Al Zorah. Ajman’s new developments are getting investors excited / Image Credit: SuppliedA golf villa in Al Zorah. Ajman’s new developments are getting investors excited / Image Credit: Supplied

The combination of an apathetic investment climate and tentative investor sentiment has kept the UAE real estate sector in hibernation mode for the first five months of the year, but that doesn’t mean that prospective homeowners should write off opportunities altogether.

There have been some interesting movements in the northern emirates where residential rental rates only registered a marginal decline in the first quarter (1-2 per cent on average), compared with Dubai. Infrastructure development is also creating a new future landscape and helping position the northern emirates as contenders in the investment competitiveness stakes.

Sharjah and Ajman

For Sharjah, talk of forthcoming legislation supporting foreign ownership is sure to tickle the fancy of investors looking for an affordable entry point into the UAE market. In addition, overall low levels of new supply have enabled the emirate to maintain relative stability.

Sharjah and Ajman have seen fairly rapid development of their adjoining hospitality and tourism sectors, including the first-quarter opening of several commercial and retail outlets along King Faisal Street and other areas in Sharjah, which led to an increase in rental rates for certain apartment blocks facing the main road, and the launch of a 16,000-sq-m community mall, Zero 6, in Juraina 2, near the Sharjah University City campus, which will debut in 2017.

Growth in Sharjah’s industrial sector will also open up new opportunities in the labour market, driving demand for affordable housing. Sharjah Asset Management, the government’s investment arm, has launched a new industrial park, Al Saja’s Industrial Oasis on Emirates Road, which will cover 14 million sq ft of prime industrial land close to the airport and Al Hamriya Port.

In Ajman, apartment rents remained stable in the first quarter with good-quality two-bedroom apartments available for Dh35,000-Dh45,000. Three-bedroom units lease for up to Dh70,000. The low rates and proximity to Dubai are attracting residents on a budget, while long-term investors could expect steady returns.

According to the Ajman Real Estate Regulatory Authority, approximately 4,000 units were sold last year across seven freehold developments, with a total value of Dh11 billion, up 27 per cent on 2014. Completed projects were the most popular.

The unveiling in the fourth quarter of two high-profile Al Zorah communities scheduled for completion in 2019 is adding to the emirate’s attractiveness as an investment destination. Golf Estates, comprising 800 villas, town houses and apartments on an 18-hole Nicklaus Design golf course, is targeting buyers looking for a high-quality, leisure-focused lifestyle or a second home, while Al Zorah Beach Residences, which will be home to 134 chalet-style villas and apartments.


One of the quieter emirates, Fujairah’s historically limited supply of studio and one-bedroom apartments has benefited owners with increasing rental rates over the last few years, although in the first three months of this year, rents dropped by a nominal 1 per cent. There is opportunity for developers to address the dearth of high-quality units, with existing properties nearly fully occupied, although there aren’t any new projects to whet investor appetite just yet.


For years Ras Al Khaimah has been an option for investors looking for a second home or buy-to-let property. Projects to be handed over this year include the 1,440-unit Pacific Beachfront on Marjan Island from Select Group, with 80 per cent of the apartments already sold.

The popular Mina Al Arab community will launch phase two of its Flamingo Villas this year with an additional 68 units by year-end. On the affordable housing front, the Bateen Al Samar housing project will deliver 233 phase-one units in 2018.

New RAK developments are commanding annual rents of Dh50,000-Dh70,000 for a two-bedroom apartment, on par with Q1 2015 figures. Three-bedders achieve up to Dh115,000, up from Dh110,000 in 2014.

A slow burner, the Northern Emirates is one to watch in the months to come.



Source: John Stevens, Special  to Property Weekly PW

The author is Managing Director of Asteco


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