The success of the suburban seaside communities that have sprung up in Al Jazirah Al Hamra, to the south of Ras Al Khaimah City, has given real estate developers an appetite for new housing schemes. Hundreds of homes are currently being built both at Mina Al Arab and Al Hamra, while on the Al Marjan Islands development new waterfront communities are taking shape on reclaimed land.
RAK Properties
The Abu Dhabi Securities Exchange-listed RAK Properties launched its Mina Al Arab project in May 2006 at a cost of Dh10bn ($2.7bn). The mixed-use development is divided into six districts which spread over 4m sq metres. A mixture of apartments and villas give waterfront views, facing either the sea or Mina Al Arab Lagoon. In 2014 RAK Properties announced two new schemes. In May Al Nuaimi Group was awarded a contract to build phase 1 of the Flamingo project, which consists of 124 waterfront villas in a community with swimming pools, playgrounds and a multi-purpose sports court. According to RAK Properties, the Flamingo villas should be handed over in the fourth quarter of 2015. In May 2015 RAK Properties announced the release of phase 2 of the Flamingo project comprising 57 villas and also announced plans to develop a “touristic development” valued at Dh2bn ($544.4m) over the next few years on one of the islands at Mina Al Arab.
In November 2014 work began on Bermuda, a scheme to build 157 waterfront villas at Mina Al Arab and due for completion by the second quarter of 2016. In its 2014 annual report the company reported it had retained a small number of villas for rental purposes, but that the rest had been sold off-plan. The Bermuda project, whose villas range from two to six bedrooms, is being completed by Al Tameer Group. In a statement issued with the annual report, RAK Properties’ managing director and CEO, Mohammed Sultan Al Qadi, said 2014 had seen impressive growth and that Dh1bn ($272.2m) had been set aside for the expansion programme. “There is no doubt that the introduction of Flamingo and Bermuda Villas has greatly enhanced our performance levels,” he said.
Al Hamra
Demand for upscale coastal villas is also behind two residential schemes around Al Hamra Village. In Al Hamra Village itself 162 homes are being developed in a new area called Bayti, “my home” in Arabic. The three- and four-bedroom houses are being marketed as ideal holiday properties or as family homes for people who live and work in the emirates. Residents will have access to swimming pools and Al Hamra’s other community facilities, including the golf course, Al Hamra Marina, restaurants and Al Hamra Mall, which has shops, restaurants and a Vox Max cinema.
The construction contract was awarded to Al Karmel and is due to be completed by December 2015. In April 2015 Al Hamra Real Estate Development reported that most of the Bayti properties had been sold off-plan, and the company said all 1000 villas in the existing Al Hamra village were occupied and that 30 apartments out of 2500 remain on the market.
Falcon Island
Work has also started on another of Al Hamra Real Estate Development’s new residential projects, Falcon Island. The Dh1bn ($272.2m) scheme is being built on an existing island and will feature 150 luxury waterfront properties built to meet Leadership in Energy and Environmental Design platinum standards. Italian sustainable architecture company A++ is behind the design of the infrastructure, which will include a solar-powered district cooling system with energy generated from photovoltaic panels built in the shape of a falcon’s wing, both on the bridge leading to the island and on the roof of a core building that will house gyms and shops. The homes on the island will have radiant cooling panels on the ceilings and cool coatings on the walls, which are designed to reduce the demand for air conditioning. The island will be divided in two by a canal. China Harbour Engineering secured the Dh170m ($46.3m) contract to complete the marine and infrastructure works at the site, which will include reshaping the island, and creating mooring areas and beaches. Falcon Island was showcased at Cityscape Global in Dubai in 2014, with the first phase selling out almost immediately, according to Al Hamra Real Estate Development. The homes are due to be handed over by the last quarter of 2017.
Al Marjan Island
The four man-made islands that make up Al Marjan Island constitute the largest development in RAK in the hospitality and residential segments, set for a total of 8000 rooms and 10,000 residential units. Three hotels opened in 2014, residential properties have been built and more are on the way. Bab Al Bahr residence, built by Rakeen Development next to the Rixos Hotel, consists of 500 apartments ranging from studios of 40-56 sq metres to 320-sq-metre penthouses and one-, two- and three-bedroom homes.
The development features a communal swimming pool, a play area, underground parking and a beach. Al Hamra Real Estate Development is planning to build an additional 100 waterfront villas on the fourth island. In addition to Al Hamra’s Real Estate Development’s projects, the Marjan Resort and Spa also consists of several freehold villas.
Supply & Demand
Although both RAK Properties and Al Hamra Real Estate Development impressed potential investors at Cityscape Global in Dubai, the scale of development currently being planned in RAK suggests thoughtful optimism rather than excessive and exuberant ambition.
“If you look at what RAK Properties is doing with Bermuda or our plans for Bayti or Falcon Island, we are building hundreds of homes at a time,” Barry Ebrahimy, the head of the commercial department at Al Hamra Real Estate Development, told OBG. “Nobody is building thousands of homes. We are not overbuilding; we are following the laws of supply and demand. We don’t want to compare ourselves to Dubai but to complement it. If Dubai is like Los Angeles, we see ourselves as being like Newport Beach,” he added.
Although the new developments south of RAK City are aimed at affluent Emiratis, international residents and tourists looking for holiday homes, property prices are lower than in Dubai. The emirate markets itself as a relaxed destination or place of residence, offering “affordable luxury”. However, when it comes to luring large-scale property developers away from Dubai, RAK faces a challenge because lower property values translate into a slower return on investment.
Despite this, investment continues to flow in. “We have invested in RAK. We built RAK Tower and the Union Tower, and we have a project on Marjan Island, a mixed-use development combining residential properties and a hotel,” Abdul Kunbargi, the CEO of Union Investments, told OBG. Union has also developed Yasmin Village, a community of upscale apartments and villas with views of the mountains, which is inland from the main city and convenient for Nakheel Street, Saqr Hospital and RAK International Airport.
Homes For Nationals
Although flagship upscale residential schemes may be expanding in RAK, hundreds of homes are also being built for Emiratis who qualify for housing or assistance with loans or grants to build their own properties under the Sheikh Zayed Housing Programme (SZHP).
The developments are producing a substantial stream of work for house builders. The quarterly statistical bulletins produced by RAK Department for Economic Development show that in 2014 there were schemes to build 942 homes for citizens with a total expenditure, including new and ongoing projects, of more than Dh758m ($206.3m).
In 2013, a total of 508 homes were built for citizens and there was a combined expenditure of Dh433m ($117.9m). In 2015 the construction of a new 2000-home development started, with funding from the SZHP expected to total around Dh2bn ($544.4m). The settlement for Emiratis is being built between Emirates Road and Mohammed bin Zayed Road, and will include green spaces as well as shops and other amenities.
Mohammed Al Haram, the director of the project, told local media, “The first phase includes 500 houses. The whole project is expected to be completed within four to five years. The project is part of a new strategy by the programme to build cities that accommodate a large number of people, and includes all needed services.” Based on an average family size of five, the new community is expected to be home to around 10,000 people.
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