The Northern Emirates are exploring the potential offered by their real estate sector in terms of greater affordability and larger, more serene spaces compared to their more affluent neighbours of Dubai and Abu Dhabi. The focus is also on infrastructure and industrial expansion and boosting their tourist appeal.

01 November 2020

The coronavirus pandemic that is currently plaguing the world – despite causing punishing impact on many sectors of the economy – may have a silver lining for the Northern Emirates by unlocking the potential of their real estate that boasts greater affordability, serene surroundings and larger spaces than their wealthier neighbouring emirates.

The health crisis has no doubt delayed the pace of progress in these emirates but residents of the more affluent but more densely populated Dubai and Abu Dhabi have been looking at options that Sharjah, Fujairah, Ras Al Khaimah and the other northern emirates (namely Umm Al Quwain and Ajman) offer in their quest for larger and cheaper homes.

In response to this demand, construction activity seems to be on the increase as can be gauged by the fact that Sharjah Municipality last month reported a surge in construction permits issued, totalling 33,722, registering a 26 per cent rise during the third quarter compared to the previous quarter.

The Northern Emirates started the year with the best intentions of tapping the potential offered by the Expo 2020 that Dubai was looking forward to host, with many of them having earmarked an increase in spending on infrastructure. However, with the world-class event postponed by a year, the degree of urgency is now reduced.

Apart from infrastructure, there has been increased spending on social housing throughout the emirates. On a federal level, the Sheikh Zayed Housing Programme plans to deliver 1,729 houses worth Dh2 billion ($544 million) by the fourth quarter, including 888 units over three phases in Ras Al Khaimah and 500 in Ajman, in addition to 341 homes in Dubai. 

In Sharjah, social housing projects are continuing in line with the directives of HH Dr Sheikh Sultan bin Muhammad Al Qasimi, Supreme Council Member and Ruler of Sharjah, who ordered the completion of 4,400 housing requests within a year and a half.

 

Power & Water

Several projects in the power and water sector are being pursued with private sector participation and there has been increased focus on renewable energy.

Among the mega independent power projects (IPP) being developed in the Northern Emirates is the Dh4.2-billion ($1.14 billion) Fujairah F3 Independent Power Project, which is expected to be the UAE’s largest gas-fired power plant. The project, which achieved financial closure in July this year, will have a power generation capacity of 2.4 GW – equivalent to the powering of 380,000 UAE households – and is slated to go onstream by summer 2022, with full power generation expected by summer 2023.

Abu Dhabi National Energy Company (Taqa) and Mubadala will jointly hold a 60 per cent equity interest in the project, while the remaining 40 per cent will be held by Marubeni Corporation of Japan.

The financial closing followed the signing of the power purchase agreement and shareholder’s agreement between Abu Dhabi Power Corporation, Emirates Water and Electricity Company, Mubadala Investment Company and Marubeni Corporation.

Meanwhile, in the water desalination sector, the Federal Electricity and Water Authority (Fewa) has chalked out a comprehensive series of projects under the framework of the UAE Water Security Strategy. Among them, work is well advanced on a water desalination station in Umm Al Quwain, which will have an initial capacity of 50 million gallons per day.

The project, believed to be largest of its kind in the country operating on reverse osmosis technology, will have a total capacity of 150 million gallons per day upon final completion.

The independent water project (IWP) coming up  at an investment of $800 million is being developed by Acwa Power, in consortium with  MDC Power Holding Company, an entity fully owned by Mubadala Investment Company.  The project achieved financial closing late last year. The water purchase agreement (WPA) with off-taker Fewa has been signed for a 35-year term, and the plant is expected to be commercially operational by July 2022.

Meanwhile, a landmark project in the alternative fuels segment is a refuse-derived fuel (RDF) production facility which is now going online in Umm Al Quwain. Emirates RDF – a partnership between water treatment expert Besix, Finnish group Griffin Refineries and Ajman-based Tech Group Eco – was set to start production of alternative fuel last month at its Dh132-million plant, the first RDF facility in the region. It will be able to handle over 1,000 tonnes of waste per day from Ajman and Umm Al Quwain.

As part of its strategy to generate green energy, household waste collected will be converted into RDF, which will be used as a fuel in cement factories instead of coal.

Yet another innovative project in the power sector is being pursued by Bee’ah, a leading sustainability pioneer in the Middle East, which plans to convert 47 hectares of Al Saja’a landfill area into a state-of-the-art solar energy facility in Sharjah once the landfill is capped.

This is the first-of-its-kind landfill solar energy project in the region set to generate more than 42 MW of energy per year.

Bee’ah has helped Sharjah divert some 76 per cent of waste from landfills, and it is expected to reach the 100 per cent mark with the launch of the Sharjah waste-to-energy facility in 2021 by the Bee’ah-Masdar joint venture, Emirates Waste to Energy Company.

The Sharjah waste-to-energy facility will have an annual processing capacity of 300,000 tonnes of non-recyclable waste to generate electricity. On reaching the zero-waste target, Bee’ah will then be able to repurpose the Al Saja’a landfill into a solar energy farm.

 

Oil & Gas infrastructure

Fujairah is cashing in on its strategic location outside the Strait of Hormuz to support the region’s oil and gas sector by encouraging the construction of oil storage facilities and refineries in the emirate.

Among the projects on the anvil, Brooge Energy, a midstream oil storage and service provider located adjacent to the Port of Fujairah, has just launched preconstruction work on its planned 180,000-barrels-per-day (bpd) refinery and Phase Three oil storage facility.

The Phase Three facility, involving up to 3.5 million cu m of storage capacity – the equivalent of 22 million barrels – is slated to be operational in late 2022.

The company aims to build the largest oil storage facility and be the best service provider in the Port of Fujairah.

Port of Fujairah, one of the world’s key oil storage centres and the second-largest ship bunkering hub in the world, is considering investing some Dh750 million over the next two years to expand and upgrade its oil handling infrastructure. The port has just awarded a contract to expand and upgrade its bulk handling capacity.

 

Industrial & Free Zones

The Northern Emirates have been focusing on industrial expansion and Sharjah, in particular has the largest industrial base in the UAE, comprising 21 key zones with 2,800 industrial units. It also accommodates about a quarter of the industrial labour nationwide.

According to Sharjah Urban Planning Council (SUPC) Vice Chairman Engineer Salah Bin Butti Al Muhairi, the industrial sector accounts for 17 per cent of the emirate’s GDP.  In line with Sharjah’s industrial expansion plans, the emirate’s 10th industrial zone is being upgraded with work expected to be completed by September 2021.

Meanwhile, the Sharjah Airport International Free Zone (SAIF Zone) has recently completed development works on U2 Area, a new dedicated district for stores and warehouses which features 70 world-class and mergeable stores each of which spreads over an area of 600 sq m.  With the U2 area, the total number of warehouses and stores in SAIF Zone now surpasses 2,000.

Among other projects in the emirate, the new Sharjah Oasis is coming up on a 963,000-sq-m area within the Research, Technology and Innovation Free Zone Authority in the Manazel area.

Sharjah Oasis, a wholly-owned Free Zone Authority of the University of Sharjah (UoS), aims to conduct applied scientific researches to produce new technologies and innovations, by providing an environment conducive to creativity and innovation, developing knowledge-based economic projects and establishing partnerships with universities, institutions and related sectors.

Ajman, too, is aiming to attract global investments in line with Ajman Vision 2021 and the government’s efforts to establish a business-friendly environment in the emirate. Ajman Free Zone has recently launched Ajman Boulevard, a modern office complex.

 

Real Estate

Sharjah has recorded nearly 28,710 real estate transactions worth Dh6.2 billion during the first six months, up 4.1 per cent over the same period last year, according to the Sharjah Real Estate Registration Department (SRERD). 

Residential properties topped the list with 845 deals constituting 69.4 per cent of the total transactions, followed by commercial properties with 166 transactions (13.6 per cent), industrial properties with 166 transactions (13.6 per cent) and finally agricultural properties with 41 transactions (3.4 per cent).

The Northern Emirates have remained strong contenders for affordable, family-friendly living in the UAE. Some of the larger communities have reported a surge in demand over recent months.

Sharjah-based real estate developer Arada, for instance, reported a 10 per cent increase in sales during the first half of this year compared to the same period in 2019. Arada has seen robust demand for units at the two projects it has launched to date – Nasma Residences and Aljada.

Aljada is Sharjah’s largest mixed-use development project located on the last major plot of undeveloped land in the heart of the emirate. Buoyed by its success at Aljada, Arada has recently launched Sarab 2, a new premium garden villa community at the 24-million-sq-ft mixed-use destination.

Meanwhile, Sharjah Investment and Development Authority (Shurooq), an independent government entity mandated to drive the emirate’s transformation, is set to start work on several premium leisure projects in key areas of Khor Fakkan, Kalba, Al Dhaid and Mleiha in the emirate. These include Sharjah’s first-of-its-kind 60-key experiential family retreat within the 14-sq-km Seih Al Bardi Kabeer safari park project in Al Dhaid; two five-star hotels along the Khor Fakkan Beach and adjacent to Kalba Waterfront; and the Moon Retreat, a new feature at Shurooq’s Mleiha Archaeological and Eco-tourism destination.

Shurooq has joined hands with Abu Dhabi developer Eagle Hills to embark on the second phase of the Maryam Island masterplan with the launch of low-rise Maryam Gate Residences in downtown Sharjah. 

The joint venture known as Eagle Hills Sharjah is also developing the Kalba Waterfront project which will offer an integrated leisure and shopping destination at the edge of Kalba lagoon, which is part of the Kalba Eco-Tourism Project. 

The third project being developed by Eagle Hills Sharjah is Palace Al Khan comprising 88 rooms and suites, and featuring a spa, a fitness club, an outdoor swimming pool and conference facilities.

Shurooq, along with Dubai-based Diamond developers, is also spearheading the development of the Dh2-billion Sharjah Sustainable City, the first fully-sustainable residential community in the emirate. The first stage of the construction works for the development is expected to be completed next year and includes 280 townhouses, an educational institution, a sustainable centre, sports facilities for men and women, a shopping mall, medical clinics, and a farm.

Another mega development in Sharjah is Al Zahia, a premier lifestyle destination being developed by Majid Al Futtaim Properties and Sharjah Asset Management. Among the projects under construction is the City Centre Al Zahia – which is expected to be the largest mall in the Northern Emirates when it opens next year.  Also launched this year were the fourth neighbourhood and the second phase of its Uptown Al Zahia neighbourhood community.

Among the other northern emirates, Ras Al Khaimah has seen the blossoming of Al Marjan Island, where RAK AMI Hotel, a key hotel development and management company, reports significant progress in the construction of the Mövenpick Resort Al Marjan Island. Scheduled for completion in September 2021, the Dh543-million Mövenpick Resort Al Marjan Island is around 40 per cent complete.

Also in Ras Al Khaimah, RAK Properties completed earlier this year the construction of Gateway Residences, a low-rise tower featuring 144 luxury apartments on the main island at the heart of Mina Al Arab community.  The developer has also reported that work is in progress on Marbella Villas, its waterfront residential development coming up at its mixed-use project Hayat Island, one of the two islands that comprise Mina Al Arab, an established waterfront community.

• Cashing in on affordability
• Arada wins success despite challenges
• Al Zahia makes progress on 3,700-home plan
• Northern Emirates projects at a glance

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