The hot new emirate on the property scene in UAE

The hot new emirate on the property scene in UAEImage Credit: Supplied

Move over Abu Dhabi and Dubai. The UAE has a hot new emirate on the property scene.

Ajman may have been overlooked in the decades that the two most popular emirates made waves on the global stage, but some are picking 2015 as the year of the emirate.

At only 260 sq km, the northern star boasts an unspoilt coastline and a smaller population, with an estimated quarter of a million residents. It is, correspondingly, also short on development — or at least it had been. But that has been changing.

There's a clutch of different residential and commercial projects at various stages of planning and construction in Ajman, ranging from the straightforward to the spectacular. Its government has recently been focusing heavily on development, allocating 40 per cent of its fiscal budget to new projects, including the under-construction international airport in Manama. The emirate has also been attracting a higher number of residents as a result of rental hikes in Dubai and Sharjah, with real estate agent Asteco recording a 27 per cent rise in Ajman last July.

The big one

The dozens of different projects under way in the emirate have a combined value of billions of dirhams. One of them is the Al Zorah development, estimated at Dh2 billion, set amid one million sq ft of mangroves. It is intended to be a mixed-use development, with four marinas, two beachfront resorts, a Jack Nicklaus-designed golf course, villas, apartments, a wellness centre, restaurants and retail space. And that's just for starters, says Imad Dana, CEO of Al Zorah Development Company, adding that more announcements are to come.

''The project is the first of its kind for the emirate and will definitely place Ajman on the map. It sets new benchmarks in integrated community developments and is completely different from what you've seen before in the UAE, set amid exotic natural mangroves and a pristine waterfront.''

Some aspects of construction have already been completed, but the entire project, which was launched in 2008, will not be finished until 2017. However, Dana says this year will see much of the development opening up, with the first of the two luxury resorts, run by Oberoi Hotels and Resorts, due to open by end of the year, alongside the 42 golf villas.

''For us at Al Zorah, 2015 is a milestone year as we make rapid progress in the completion and delivery of various components,'' says Dana.

''The timing of the project is linked to the all-round growth of the economy. Today, property rental yields are higher than bank interest or mortgage rates, which is a clear indication that the market is healthy. What we see from our experience is that customers, especially premium investors, seek truly differentiated projects.''

A partnership between the Ajman Government and Lebanese luxury developer Solidere — which developed Beirut's Central Business District — Al Zorah is expected to appeal mostly to UAE nationals and expatriates. But Dana says they also hope to reach out to investors from the GCC, Europe and Asia — and the interest is there.

''The response to Al Zorah is a clear example of how a highly differentiated real estate development can boost demand,'' says Dana. ''Al Zorah serves as a home, second home or tourist destination, and this is a magnet for investors from the region as well as abroad.''

Natural beauty

One of the biggest draws, he says, is the unspoilt beauty of the surroundings. The mangroves are home to more than 58 species of birds, including flamingos, and the project encompasses 12km of waterfront and 1.6km of beaches. Development is often at odds with safeguarding the environment, but this is not the case with Al Zorah, adds Dana.

About 60 per cent of the property will remain untouched, and the mangrove area has grown by 20,000 sq ft under recent monitoring. Cowi, a Denmark-based international consulting group specialising in engineering, environmental science and economics, provided an environmental impact assessment in 2008 with strict recommendations to protect the environment, such as creating a buffer between the golf course and mangroves. Dana says the developers are following the directions.

''The Al Zorah Development Company is fully committed to preserving the [region's] rich biodiversity... These natural assets are at the heart of the project and have been declared conservation areas as part of the strategic master plan.''

It is by all accounts an attractive development. But it would mean nothing if Ajman had limited appeal. Dana calls the emirate one of the ''fastest-growing tourism destinations in the region''.

''Ajman is a liberal emirate and offers strong potential for growth. The business environment offers a wealth of opportunities unlike other emirates, which [have] already witnessed several large-scale developments.''

Amina Al Mazrooei, Director of the Human Resources Department at The Ajman Chamber, says that in the coming years the emirate is ''expected to boom''. Tourism and industry are the major growth areas and investors are looking to Ajman for good reason.

''The industrial sector largely attracts investors and businessmen because it provides hassle-free procedures for all transactions. This is in line with [the] directives of the prudent leadership.''

The chamber is taking the emirate to the world, with a Made in Ajman campaign that will have a presence in both local and international trade shows and events to attract investment.

The freehold advantage

But becoming the new Dubai is not the objective.

''It won't be the new Dubai, but it'll be a new Ajman, benefiting from the overall economic opportunities in the UAE and Dubai.''

While less than 65km separate Ajman from Dubai, the northern emirate offers freehold land at prices that are only a fraction of those in Dubai's overheating property market.

Farrukh Butt, owner of investment and real estate company Al Farooq Real Estate and Investment, also agrees that Ajman has a unique selling point. ''The best thing in Ajman is that it has freehold land. If you want to build a 5,000-sqft villa in Dubai [it would cost] at least Dh5 million-Dh7 million. The same in Ajman would cost Dh1.8 million,'' he says. It's even possible to buy a small commercial or residential building for Dh2 million or Dh3 million. ''You wouldn't get that anywhere else,'' adds Butt.

Additionally, there are no hidden charges, and service charges are also economical at about Dh3 per square foot as opposed to Dh10 or Dh11 in the pricier emirates, he says.

Ajman also has better opportunities for developers. ''You can design the type of building you want in Ajman in your own way... In Dubai there are more laws and you can't build small buildings [just] anywhere,'' Butt says. His company offers customers the opportunity to invest in developments as well as buy and rent property.

''The biggest project in Ajman is definitely Al Zorah. Then it's Emirates City, where 40 or 50 towers are under construction,'' he adds.

Emirates City has been in development for years, but was stalled during the recession. Some of the towers are now nearing completion.

However, Butt is cautious not to overstate Ajman's scale of development. ''It's not booming that much [yet], but we are attached with Dubai. When Dubai goes up, we go up and when Dubai goes down, we go down,'' he says. And while Ajman's fishing village roots are still recognisable, Butt predicts that will not be the case for long.

''Ajman will look like Singapore [soon]. It's the smallest emirate and everybody wants to build and come here, and it's easy.''

Butt is not concerned about a property bubble or market crash in Ajman, and, with the exception of the recession years, he says prices have risen steadily over the past decade. ''It's 100 percent safe. We've been in Ajman for almost nine years, and have never seen any problems with any investors or properties.''

Most investors are nonresidents from the UK and South Asia, who generally look for different assets in their Ajman investments than those in Dubai. Small buildings and private hospitals are popular, says Butt.

''I know many investors who like to invest in Dubai, and prefer Ajman as well. They don't want to put their eggs in one basket.''

Butt recommends investing in the Ajman Mall development near the corniche. Being developed by a local firm, AJ Design, at an estimated cost of Dh450 million, the 70,000-sq-m development offers retail as well as residential and commercial spaces, including 160 apartments and 372 hotel rooms.

In fact, Ajman is not as far behind as people may think, says Butt. ''In Ajman they're focusing on the infrastructure now, building more bridges, roads, etc. In Dubai they've already done it, the road network and the linkups, [but] Ajman is [now] catching up.''

Check out Ras Al Khaimah also as the next investment hub

Source: Amanda Fisher, Special to Property Weekly


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