Gulf Construction Online - Thriving on affordability

Northern Emirates

Al Marjan Island ... attracting key investment.

Thriving on affordability

01 November 2016

The smaller of the UAE emirates have a fair share of projects including infrastructural development and landmark real estate schemes that could rival those of Dubai and Abu Dhabi, says MRIDULA BHATTACHARYA.

A number of large-scale, mixed-use developments and infrastructure projects are encouraging a more positive construction market outlook in the Northern Emirates, particularly in Sharjah and Ras Al Khaimah.

Overall, there are more than $6.5 billion worth of construction projects planned or under way in the five Northern Emirates – Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah – and a further $1.8 billion worth of hospitality projects, according to Dubai-based Meed Projects.

Considerable attention is being given to infrastructural development and housing in the Northern Emirates.

Earlier this year, the UAE approved $2 billion worth of infrastructure projects. Some $1.3 billion of the total will be put into 12 housing compounds over the coming five years, providing homes for 42,000 people. Among infrastructural projects, the UAE is studying a proposal to lay a road parallel to the Emirates Road, connecting the Northern Emirates to Abu Dhabi and Dubai.

In the power sector, the Federal Electricity and Water Authority (Fewa) is to spend about Dh1.3 billion ($354 million) on new power distribution stations and expansion of key facilities in the Northern Emirates. The major projects include construction of 25 new distribution stations, expansion of 17 existing stations and replacement of overhead electric cables with underground ones in Ajman, Fujairah, Ras Al Khaimah and Umm Al Quwain.

The real estate sector, meanwhile, is seeing increasing investment, thanks to the relative affordability of these emirates compared to Dubai. A recent report by the Oxford Business Group (OBG), quoting Cluttons, said the demand for high-end suburban-style properties and gated communities was strong in Sharjah and continues to rise in the emirate.

The report further said: “The long-term hope – and one that is being backed by developers – is that Sharjah begins to complement its affordability with a competitive lifestyle offering. The recent completion of a Dh11.4-million ($3.1 million) city centre roadwork project, as well as a series of large-scale developments in the pipeline, is encouraging investors to examine Sharjah’s potential as an alternative to Dubai.”

Sharjah

Sharjah is the third most-attractive property investment destination in the GCC, according to a recent survey by Cluttons. Continued investment in real estate bodes well for Sharjah’s long-term economic prospects. The sector forms a vital part of the emirate’s economy, with real estate and business services accounting for a combined 21 per cent of economic activity, says the OBG report.

Some of the major developments in Sharjah are the Tilal City, Sharjah Waterfront City and Al Zahia (see separate report).

Developed by Tilal Properties, a joint venture between Sharjah Asset Management and Eskan Real Estate Development, the Dh2.4-billion ($653 million) Tilal City development spans 25 million sq ft. In September, the developer announced plans to build Tilal Mall within the city, which at about 2 million sq m, would be the emirate’s largest. Construction is scheduled to start in mid-2017 for completion in 2019.

Tilal City is Sharjah’s first freehold and free-lease, master-planned project. It comprises 1,855 land plots, aiming to provide high-quality housing for 65,000 residents.

Another mega development is Al Zahia, a joint venture between Majid Al Futtaim and the Government of Sharjah, which is Sharjah’s first gated community. Spanning over 1 million sq m near Sharjah University City, the project offers a range of villas, townhouses and medium-rise apartments, as well as boutique villas.

Majid Al Futtaim is also developing City Centre Al Zahia, adjacent to Al Zahia. Planned to open in 2018, the mall will have a gross leasable area of 130,000 sq m.

Meanwhile, Sharjah Waterfront City is a multi-billion-dollar development located on Sharjah’s northeast coast. Announced last year, the project is said to be the third largest mixed-use project in the Gulf. The Dh20-billion ($5.44 billion) project, being developed by Sharjah Oasis Real Estate Development, is Sharjah’s largest master-planned mixed-use development project and will be built over 10 islands covering an area of 60 million sq ft along 36 km of waterfront.

Among other projects under way, Al Thuriah Properties, a premier property developer, has started work on Sahara Tower 6 located in Sahara Complex, a master development with a built-up area of 3.1 million sq ft that includes 1,348 apartments. The tower will be built to the UAE’s Green Building specifications. Sahara Tower 6 includes two towers – 39 and 21 storeys, comprising 376 residential units. The project is scheduled for completion in December 2019.

At the Sharjah FDI forum held in September, the emirate launched its bid for an increase of 30 per cent in foreign direct investment. Home to a third of the UAE’s manufacturing capacity, the emirate is focusing on sectors such as tourism, renewable energy, health care and logistics.

Tourism has already experienced an increase in FDI; for instance, Starwood Hotels and Resorts – which has recently been acquired by Marriott International – has two new hotels opening in Sharjah in the next two years adding a further 220 rooms in a four-star hotel and 270 rooms in an upscale three-star hotel.

Ras Al Khaimah

There are three major developments currently under way in Ras Al Khaimah: Al Marjan Island, Falcon Island and Mina Al Arab.

A man-made archipelago stretching 4.5 km out to sea, Al Marjan Island will be home to more than 20 hotels and resorts with the capacity to host up to 20,000 guests once completed. Some of the properties include Anantara (see Hotels & Palaces), Crowne Plaza and Marriott.

Among the latest projects to be announced for Al Marjan Island is a development by the Mohammad Oman Bin Haider Holding Group involving an investment of Dh1 billion ($272 million). The upscale project, spread over 1.4 million sq ft, will feature a five-star hotel, luxurious residential apartments, a commercial buildings cluster and retail area.

The $272-million Falcon Island, being developed by Al Hamra Real Estate Development, will contain 150 villas and a marina on an island divided by a central canal. The larger Al Hamra Village scheme, which the island is part of, covers 77 million sq ft and includes more than 1,000 villas and townhouses and nearly 2,500 apartments as well as five hotels, a golf course and a shopping mall.

Mina Al Arab, meanwhile, will see a further Dh5 billion ($1.37 billion) investment by its developer RAK Properties. The latest project will feature five-star and lifestyle hotels, waterfront villas and townhouses, a beach clubhouse, shopping mall and outdoor entertainment venues.

Abu Dhabi-based Jannah Hotels and Resorts, majority-owned by Abu Dhabi’s family business Bin Rubayeh Group, will also open the Jannah Resort and Villas at Mina Al Arab. The development will comprise 100 hotel apartments and 24 villas.

Four Points by Sheraton is set to open in Ras Al Khaimah in 2019. Launched in collaboration with Hamarain Real Estate, the hotel will be Starwood’s first property in the emirate. It will offer 300 rooms and serviced apartments, four food and beverage outlets. The hotel is part of a larger mixed-use development that will feature offices, residences and a shopping mall.

Ajman

A total of 12 real estate projects will be completed in freehold areas of Ajman this year, according to a newspaper report quoting the Real Estate Regulatory Agency-Ajman (ARRA). The report also said that around 3,000 residential units will be delivered by the end of the year.

One of the major projects in Ajman is the 5.4-million-sq-m Al Zorah development coming up along a natural creek and seafront.

Developed by Al Zorah Development Company, a partnership between the Government of Ajman and Solidere International, Al Zorah is a luxury eco-destination with a long beachfront, azure lagoons and lush mangroves.

The project will see its first residential community come alive this month (November) at The Fairways district – a mixed-use neighbourhood featuring villas, townhouses, apartments, a golf club, a community park and a wellness centre – when home-owners take possession of the four- and five-bedroom Golf Villas (see separate report).

Meanwhile, Majid Al Futtaim is investing Dh600 million ($163 million) to redevelop City Centre Ajman, which will see the shopping mall almost double in size. The expansion is anticipated to be completed in the third-quarter of 2017 followed by an additional refurbishment of the existing mall, which now occupies 29,000 sq m.

Umm Al Quwain

Earlier this year the government of Umm Al Quwain and Sobha Group, a Dubai-based real estate developer, launched Firdous Sobha, an integrated resort and residential island development valued at between Dh22.02 billion and Dh25.69 billion ($6 billion to $7 billion).

The joint venture will develop the Al Seniyah Island, along with Khor Al Beidah, on a total land area of 53 million sq ft, housing villas, hotels and resorts, boutique retail outlets, 18-hole golf course, wellness destination and recreational and entertainment options in addition to ecological zones, canals, lagoons and a marina.

Details of the project are expected to be disclosed before the year-end and construction is expected to start by mid-2017.

Fujairah

Eagle Hills, an Abu Dhabi-based private real estate investment and development company, is constructing a hospitality project in Fujairah in partnership with The Address Hotels and Resorts. The project, slated to be completed in 2019, comprises The Address Fujairah Resort and Spa hotel, and The Address Residences Fujairah Resort and Spa, the latter spanning four buildings that include 105 two-bedroom, 60 three-bedroom and 12 four-bedroom units, and 10 villas.

Among key infrastructural projects, the first phase of a new road in Fujairah which will connect the UAE with Oman has been launched. The two-phase project is due to be completed in the third quarter of next year.