- Broker Directory
- My Tools
- News & Advice
- Market Trends
- Other GN Sites
Ras Al Khaimah (RAK) is gradually positioning itself as a new luxury destination with major developers building lavish properties and incorporating more opulent amenities into new development schemes.
The recent association of Al Hamra Real Estate with Italian luxury brand Club House Italia is indicative of the growing demand for luxury in the emirate. The partnership will see internationally acclaimed brands such as Fendi Casa, Kenzo Maison and Bentley Home being featured in select properties of Al Hamra's Falcon Island development. In fact, this will be Bentley Home's first foray into the UAE.
''This is an exciting time for the UAE property market and an especially positive period for luxury brands,'' says Benoy Kurien, General Manger of Al Hamra Real Estate Development. ''Having recently signed a deal that will make some of the world's most exclusive furniture brands the centerpiece of our latest development, Falcon Island, luxury brands are definitely a key factor in driving demand.''
Al Hamra has also signed A++, a leading sustainable development specialist in Europe, to design the 150 luxury villas on Falcon Island.
The company is in talks with other international brands for various aspects of its projects.
''There is significant interest from some of the most well-known brands in hospitality, furnishings and interior design,'' says Kurien. ''Negotiations are ongoing and feasibility studies are being conducted. It would be premature to announce anything at this stage.''
Industry insiders say brand association helps them create strong unique selling points (USPs) for their projects. Since the emirate has huge potential for waterfront properties that target high net-worth buyers, developers understand they need to offer something special.
''Association with respected luxury brands certainly helps in building credibility in the market, because buyers prefer to be associated with projects that represent quality and luxury,'' says Frank Khoie, Chairman of Khoie Properties, which has partnered with luxury brands such as Hessen, Trinity Yachts and Benetti for sailing and servicing yachts and marina facilities at its La Hoya Bay Marina property.
The mixed-use La Hoya Bay project is awaiting the final tranche of a $100-million (Dh367.3 million) financing. It is expected to be completed next year, in time with completion of Al Marjan Island's infrastructure.
Khoie Properties has tapped architect Paul DeVylder to head the design and engineering services. For interior furnishings, it has signed major brands such as Houzz, Italy Design and Icmobili. The kitchens will have German designs and landscaping will be done by Zen Gardens.
''Furnishing, interiors and entertainment equipment are the most important components to satisfy the selective buyers of these new developments,'' says Khoie. ''I can see that Italian brands are at the forefront of rushing into this new sector.''
RAK is becoming a sought-after leisure destination with visitor numbers expected to cross one million this year. The emirate's economy grew 8 per cent between 2011 and last year, and it continues to maintain an excellent credit rating with agencies such as Standard & Poor's. This has been reflected in the growing demand for luxury brands in RAK, including branded commercial and residential properties, which have already registered strong growth.
Khoie says the vast majority of waterfront projects in the UAE mainly target high net-worth individuals, who usually buy luxury apartments as vacation and second homes.
''This segment of the market is driven by desire for quality that comes with top brands,'' says Khoie. ''So developers have no choice but to compete and progressively attract luxury brands and associate with them, be it hotel brands, furniture brands, clothing and other luxury goods.''
Although only a few developers such as Al Hamra, RAK Properties and Khoie Properties have tied up with top international brands, the trend is fast catching up with other players. They see great value in partnering with international brands of repute as this helps raise their market standing.
''While partnerships with luxury brands are concentrated on a handful of developments such as Al Hamra Village, I see no reason why future partnerships will not continue to flourish — especially in light of plans to develop the emirate's luxury market further,'' says Kurien.
There is a proposal to expand tourism provisions by around $500 million in the coming years, say Kurien, with the aim of convincing visitors to buy property in the emirate.
RAK has a new business and commercial corridor around Al Hamra Village, with Waldorf Astoria as its landmark and Marjan Island offering an attractive waterfront lifestyle on a par with the Palm Jumeirah in Dubai. The new corridor is progressively designed and built for the affluent, be it UAE nationals, expat residents, tourists and even rich retirees who prefer to settle down in the emirate.
''In terms of luxury and quality, these homes are at par with those in Dubai Marina and, of course, the developers have to keep attracting and associating with luxury brands,'' says Khoie.
In regard to real estate, industry observers say villas command very high and stable prices across the UAE. And RAK is no different as many potential buyers are looking for a tranquil waterfront lifestyle.
''With this in mind, it wouldn't make much sense to start constructing swathes of apartment buildings that detract from the beautiful surroundings that bring people here,'' explains Kurien. ''While we have constructed a number of apartments to appeal to a broader market, the demand for such apartments is growing at a much more moderate pace.''
The emirate is also thriving as a hot destination for international hospitality brands that are making a beeline to open new properties in the emirate. With tourist numbers growing from its top five source markets — the UAE, Germany, Russia, the UK and India—developers are reaping the benefits of tying up with top hotel brands that attract international travellers.
The emirate saw impressive guest numbers in the third quarter with more than 1.47 million guest nights in the destination. In addition, hotel room revenue increased by 47 per cent in the third quarter compared to the same period last year.
Market observers attribute this buoyant demand to the emirate's growing profile as a luxury property haven. Luxury hotels that have opened recently on Al Marjan Islands are the 650-key Rixos Bab Al Bahr Resort, the 302-room Marjan Island Resort and Spa, the 484-key DoubleTree by Hilton.
There are many more expected to start operation soon, including the 265-room Santorini Hotel, part of the Bin Majid Group, which is scheduled to open next year.
Meanwhile, last year Hilton opened its first luxury property in the UAE, the 346-room Ras Al Khaimah Waldorf Astoria. Golden Tulip is also set to operate a 104-room hotel under the Tulip Inn brand. The property is currently being developed by Action Hotels.
''Our growth in guest nights for the third quarter compared to the same period last year was 72 per cent,'' says Steven Rice, CEO of the RAK Tourism and Development Authority (TDA). ''Extremely impressive.''
He also reveals that they are seeing significant increase in the number of people searching for Ras Al Khaimah on the internet. There has also been an increase in the number of visits to TDA's website and in social media engagement.
Citing the Smith Travel Research report, Rice says RAK's average daily room rate was 19 per cent higher than Abu Dhabi in July. New openings on Al Marjan Island and Waldorf Astoria helped drive rates up.
Hilton was among the first to anticipate RAK's potential for luxury tourism and the hotel group now boasts five hotels at Al Hamra Village alone.
''Other international hotel groups have since followed suit, while our own Bayti properties — a collection of 118 three- and fourbedroom town homes—sold out in just a few days of their release,'' says Kurien. ''While not directly linked to luxury brands per se, this integrated approach to development has provided a foundation for luxury brands and demonstrated the stability of the economy across all sectors.''
Developers say it is now necessary to associate any luxury real estate development with internationally recognized luxury brands.
''These are selling points,'' says Khoie. ''We and other top developers will and should continue focusing on quality and luxury brands as selling points.''
Read more about RAK which signals a booming real estate market
Source: Syed Ameen Kader, Special to Property Weekly