Shape of things to come ... the Nujoom islands.
Heading north
01 November 2005
The sleepy little Northern Emirates have woken up and are now set to create a stir in the market with a string of big-ticket projects.
Leading this charge is Sharjah, followed by Umm Al Quwain and Ras Al Khaimah (see page 48), all of which have on the anvil a number of stunning projects that aim to rival those that proliferate in boomtown Dubai.
There has been a surge of investment in real estate from local as well as other GCC investors. The opening up of the sector to foreign nationals is providing a considerable investment boost. In addition, the growth is further fuelled by the skyrocketing rents in Dubai, which are forcing residents from the emirate to seek cheaper accommodation in the other emirates. As a result, the residential market in the Northern Emirates is booming, especially in Sharjah – which is in close proximity to Dubai – where rents have increased by 25 per cent.
Investors from the neighbouring Gulf countries – especially Saudi Arabia – are now spearheading growth in the realty sector. Among them is Saudi Arabia's Al Hanoo Holding Company, which has recently announced at least two major developments – the $4.9 billion Nujoom Islands (Stars Islands) and the Emirates Industrial City. The Nujoom Islands in Sharjah will accommodate 40,000 residents in several residential districts (see page 50).
The Emirates Industrial City is considered to be Sharjah's largest industrial development project – the first phase of which is expected to be completed and operational by early next year. Located in the Saja’a district, along the Dubai Ring Road, the 7.7 million sq m industrial park will be composed of eight sectors accommodating more than 3,000 medium and light industrial operations as well as commercial enterprises and residential areas.
Another Saudi group Saudi Oger is developing the $500 million Saraya Islands in Ras Al Khaimah (see Page 50).
Umm Al Quwain too has its fair share of projects. One of the most ambitious developments there is a Dh30 billion ($8.2 billion) Al Salam City being launched by UAE and Saudi investors, which will be carried out in three phases over 15 years. The Sharjah-based Tameer Holdings and the Al Rajhi Group of Saudi Arabia each own 38.5 per cent of the project. The local government of Umm Al Quwain holds the remaining 23 per cent. Construction work on the first, five-year phase, which will cover an estimated area of 220 million sq ft, is expected to start later this year.
A major attraction of the development is that foreign nationals would be able to buy homes in the residential and commercial project on a 99-year lease basis. The development will comprise approximately 1,000 buildings, the tallest being a 50-storey hotel.
Tameer is also behind the Emirates Modern Industrial Area in Umm Al Quwain, to be developed with an investment of Dh250 million. The development comprises commercial, industrial and residential components and is located on the Emirates Road, making it accessible from Ajman, Sharjah and Dubai.
Another multi-billion-dollar project in the emirate is the Umm Al Quwain Marina, comprising some 2,600 residential villas and 6,500 apartments – the vast majority of which are either waterfront or beachfront. Some of the villas with waterfront views will be built on a large island with gated access and a series of smaller private islands will offer luxury waterfront villas. An additional 1,200 resort and hotel rooms are planned as well as parks and recreational areas, retail facilities, schools and community centres.
Emaar Middle East (EME) – part of Emaar Properties – has signed an agreement with the government of Umm Al Quwain to develop the project, which is located on the shore of Khor Al Beidah, a vast wildlife area.
The project is planned to cover more than 1,488 acres and is scheduled for completion within seven years. Tendering, infrastructure engineering and project management are expected to begin shortly on this development.
In Ajman, Tameer is developing the Al Ameera Village, a mixed-use infrastructure development on the Emirates Road.
In tandem with these developments, the government is developing the emirates' infrastructure and utilities to cope with the influx of new residents and visitors.
One of the major problems facing the Northern Emirates, especially Sharjah, is a lack of power supply, which the emirate is essaying to ease by venturing into independent power projects (IPP) (see below).
Also, to facilitate travel to the Northern Emirates, many of the airports and seaports in these emirates are embarking on expansion projects (see below).
The UAE’s Ministry of Public Works and Housing has allocated Dh2.5 billion ($680 million) for building infrastructure projects in the Northern Emirates by 2008. The projects will include hospitals, clinics, houses, schools and roads. Part of the money would be spent on a specialised hospital to be built in Ras Al Khaimah. Sharjah has committed Dh3.5 billion ($953 million) towards the development of infrastructure within the emirate. The funds would meet the demand from the rapid economic development of the emirate.
Sharjah, meanwhile, is planning a new town, which is estimated to cost $170 million, and has called upon Canada’s B+H Architects to provide designs concepts for the government-financed development.
Airports & ports
Work is under way on the Dh227 million redevelopment and expansion of Sharjah International Airport (SAA), which will enable the facility to cater to eight million passengers when completed.
The 18-month project that took off last January is being undertaken by the Binladin Group and will be financed by Abu Dhabi Commercial Bank. The space and facilities at the airport are set to expand by almost four times. Once completed, the number of airline offices will increase from 16 to 40 and the check-in counter will increase to 40 in addition to one VIP and one oversize counter. The passport control gates for both departure and arrivals will be taken to 16 each, with an electronic gate for each section. Visa counters will be increased by four to 10 and three new aerobridges will be constructed and the existing three will be replaced. The airport will have parking facilities for 800 vehicles.
Sharjah’s Khorfakkan Container Terminal (KCT) is being expanded at a total cost of Dh300 million to enable it to receive ultra-large new-generation container ships. The first phase, which is due for completion by the year-end, involves building a 400-m quay with a draught of 16 m, equipped with four super-post-panamax gantry cranes and the latest rubber-tyred gantry cranes. It also involves the construction of an 800-m-long breakwater and reclaiming 150,000 sq m for new storage capacity.
Mega-ships capable of carrying more than 8,000 TEU (20-foot equivalent units) are expected to start scheduled weekly calls at KCT beginning next January. Under phase two of the expansion, the new berth will be extended by an additional 400 m with four more super post-panamax cranes.
Power, water & wastewater
Another major area of growth in the Northern Emirates is power and water. Sharjah is venturing into independent power projects (IPP), with plans its first such project gathering pace after the selection of a developer. To be located in the Hamriyah Free Zone, the proposed grassroots plant project aims to supply the growing number of heavy industries in the zone. A number of industrial facilities are coming up in the free zone including a 1.2 million-tonne-per-year (tpy) ammonia and urea plant being built by Muscat-based Oman Chemicals & Pharmaceuticals Company (OCPC) and a steel complex being built by Saudi Arabia's Al-Tuwairqi Group (ATG). The free zone covers an area of 10 million sq m and has a 14-m-deep port with three berths and a pontoon facility. It houses about 850 companies.
A group led by the UK's C&C Sons has been awarded the contract to build the IPP plant, which is expected to have a capacity of 500 to 700 MW. The new power plant will use gas feedstock to be supplied by Crescent National Gas Company, a subsidiary of Crescent Petroleum Company.
In Fujairah, meanwhile, the Abu Dhabi government-owned Union Water and Electricity Company (Uwec) is setting up a water desalination and power generating station in Qidfa District at an initial cost of Dh3.5 billion.
According to studies, the station will produce between 800 and 1,000 MW of electricity and 100 million gallons of water per day. The new station – which would raise the company’s power generation capacity to around 1,656 MW and production of desalinated water to 200 million gallons per day – is expected to be launched by mid-2006.
Uwec currently owns a Dh5 billion water desalination and power generating station at Qidfa, which produces around 656 MW of electricity and 100 million gallons of water per day. Among other developments in the emirate, the Government of Fujairah has granted an exclusive 33-year concession to Tanqia to design, build, finance, own, operate, and expand a Dh550.9 million wastewater treatment system for the city of Fujairah, Qidfa and Mirbah, and a number of hamlets within the concession area.
The key elements of the project are a wastewater treatment plant with an initial capacity of 16,000 cu m per day, consisting of two separate treatment trains, administration facilities and a sea outfall, a wastewater collection network comprising 150 km of primary and secondary network and 32 pumping stations plus a digester for the treatment of sludge. Phase I is scheduled to commence commercial operation by April 2007 and Phase II is planned for April 2008.
Industry
Apart from the industrial cities being set up in Sharjah and Umm Al Quwain, projects worth about Dh9.1 billion spanning various industries have been announced in Fujairah this year – the largest being a Dh5.4 billion investment deal that was agreed between the Fujairah Government and a Ukrainian company involving oil and natural gas exploration in Fujairah and Abu Dhabi.
Other deals include construction of a Dh1.3 billion cement clinker factory by Al Ain Cement Company, which will produce 2.7 million tonnes of clinker annually, or 7,500 tonnes per day. Another cement factory will also be established in the Al Tawiyeen area at a cost of Dh367 million.
Among other developments, the Abu Dhabi Investment Company is preparing to set up an iron and steel factory in Fujairah, along with some strategic partners. The factory will produce about 1.2 million tonnes of iron per year in addition to 1.1 million tonnes of steel.
All in all, the Northern Emirates – which hitherto focused on infrastructure developments and a few multi-million-dollar projects – seem to have come of age, aiming to move into the league of countries that are drawing worldwide interest.
