Asteco has released its latest Northern Emirates market update as part of its UAE-wide Real Estate Report, which includes a review of 2015 market activity as well as a 2016 outlook.
The residential leasing picture in 2015, with the exception of Fujairah, saw rental rates across the Northern Emirates decline marginally, with Sharjah, Ajman and Ras Al Khaimah recording two per cent, 0 per cent and two per cent fall, respectively.
According to the report, new supply of housing units in Sharjah coupled with a lower inflow of residents from Dubai will put downward rental pressure on lower quality apartment towers.
The Dubai-effect on Sharjah rents
“Market activity in Sharjah is historically interlinked with that of Dubai, with the two emirates in such close proximity that the ebb and flow of residents between them usually follows the rental market highs and lows in Dubai,” said John Stevens, managing director, Asteco.
“But with both emirates investing heavily in infrastructure development and a growing quality-focused residential offering, we are seeing a slow shift towards a more stable environment as investors and tenants consider the quality of life outside of Dubai,” he added.
New residential units in demand
The take-up rates are running faster than before as landlords perk up their properties with ‘improved quality, car parking availability and better location’, according to the consultancy Asteco. And demand for new properties is starting to tell ever so slightly on the older – and less well-kept – units.
“It is worth noting that the swift take-up of newly handed over supply in Sharjah was in some cases, at higher rates than seen previously. This was due to the improved quality of the properties, convenient car parking availability, better facilities and amenities,” said Stevens.
In 2015, Sharjah added a number of residential developments to its existing supply including the Diamond Tower in Al Nahda with 2,105 units, two residential buildings in Al Tawuun (798 units) and a 175-unit block in the Al Khan district. This year could see more stock delivered including 1,520 units in Al Nahda (Rayyan Complex), Al Khan (Pearl Tower) and Al Qasimiyah (CG Mall Residences).
This is being driven largely by a rapidly developing tourism product with a number of initiatives launched in 2015 such as the expansion of the Majaz waterfront and the completion of Noor Island.
In the Majaz and Al Khan areas, a ‘quality’ three-bedroom apartment commanded Dh95,000 and Dh105,000 respectively per annum, compared to Dh85,000 several months earlier.
New projects coming up in Ras Al Khaima
Major projects set to be handed over in 2016 in Ras Al Khaimah include the 1,440-unit Pacific Beachfront development on Marjan Island from the Select Group, with 80 per cent of the apartments already sold according to the developer.
The popular Mina Al Arab community will launch phase two of its Flamingo Villas this year, delivering an additional 68 units by the year-end, ranging in size from 2,008 to 2,334 square feet.
Currently, new RAK developments are commanding average annual rental rates of Dh60,000 for a two-bedroom apartment, down from Dh63,000 in 2014, with three-bed units achieving Dh 100,000 (down from Dh110,000 in 2014).
Ajman is also working to upgrade its attractiveness with exciting initiatives such as the Al Zorah development adding a golf course to the lifestyle offering. This year will also see the launch of a five-star Oberoi hotel in mid-2016.