For middle-class expatriates and would-be investors who cannot afford Dubai or Abu Dhabi, looking north may be the answer.
According to industry insiders, the northern emirates – and Ajman in particular – now offer the UAE’s best property investment opportunity.
“Ajman is interesting because it is the cheapest freehold market in the UAE,” said Sajeer Babu, an equity analyst specializing in property at the National Bank of Abu Dhabi. “You can have a one-bedroom flat for Dh400,000 (US$108,000), while it would cost you four or five times that price in Dubai.”
According to the latest House Price Index from Colliers International, the average price per square foot in Dubai is Dh1,579. In Ajman, it is about Dh500.
Because Ajman prices were starting from a low base, they were affordable and they also had more room to grow. “Investing in property in Dubai or Abu Dhabi today doesn’t make so much sense,” Mr Babu said.
Evidence of the excitement surrounding the emerging northern emirates property market could be seen at this month’s R&R Local Property Show in Ajman, which attracted more than 35,000 visitors, according to the organizers.
But while Ajman was generating the loudest buzz at the show, it has competition from its northern neighbours.
In Ras al Khaimah, more than 30 projects are under way or in the planning stage, among them Saraya Islands, Mangroves Island and The Gateway, as well as the $2.7bn Mina Al Arab, which is being developed by the government-backed RAK Properties.
With a thriving industrial free zone, many kilometres of undeveloped coast and a robust tourism development plan, RAK looks likely to attract a growing population of permanent residents who work locally.
A more mature market than Ajman, RAK has seen property values increase dramatically since May 2006, when Mina Al Arab was launched.
“RAK Properties are now selling their units in Mina Al Arab at Dh1,200 per square foot, compared to 600 in the beginning,” said Mr Babu, adding that this would probably be the pattern throughout the northern emirates. “This will eventually happen in Ajman,” he said.
Umm al Qaiwain has its $8.2bn Al Salam City, Umm al Qaiwain Marina and White Bay. However, brokers say it is moving more slowly than other emirates in terms of both development and regulatory laws.
While Fujairah was viewed as the classical weekend tourist retreat, it also had several residential projects under way – among them Fujairah Paradise, Al Jaber Tower and Al Dana.
Jose Yanbeyi, a manufacturer from Venezuela now based in Fujairah, was optimistic about the emirate’s growth. “A direct motorway to Dubai will be completed by 2009,” he said. “The emirate is developing its port, there is the Dolphin pipeline project... so it’s bound to become very interesting.”
For the time being, though, Fujairah is hampered because, along with Sharjah, it does not offer freehold opportunities to non-nationals.
Sharjah was the first major market for middle-income buyers priced out of Dubai. However, restrictions on freehold ownership have created an opportunity for neighbouring Ajman to position itself as the ideal commuter destination. Ajman has seized on this to market itself under the slogan “Work in Dubai and live in Ajman”.
According to Dirk Sassen, a shareholder in ICT, a German investment fund that is developing three towers in Ajman, the emirate is answering a need created by a shortage of affordable properties in Dubai.
“Once Burj Dubai is completed, the inner circle of 25km around it will be one of the dearest residential areas in the world,” he said. “The middle class will have no chance inside this circle, even in International City. Ajman is only 30km from Burj Dubai and will be their natural place to live.”
Development is still in its infancy but Ajman is moving fast. Other than Emirates City, the project that launched the emirate as a property investment hub in 2006, most developments have been announced within the past eight months. The largest and most prestigious is the Dh220bn coastal city, Al Zorah, which is expected to house a population of 200,000.
Although Ajman hopes to attract mostly full-time residents as buyers, the market is now driven mainly by brokers and speculators, who expect profits to rise by 30 to 40 per cent during the next six months.
“We sold units two years ago at Dh300 per sq ft and now prices have reached Dh520,” said Mohammed Chapal, the executive director of Chapal, a developer. “The land price in Emirates City went from an average of Dh75 three months back to Dh105 per sq ft today.”
Not all buyers are motivated by money. In 2004, Ajman became the first emirate to offer an automatic resident’s visa to home owners.
“Many Iranians and Pakistanis who came to our stand were indirectly looking for a visa, particularly those aged in their 50s,” said Natalya Shapovalova from Better Homes, a property agency. “After 60, it gets more difficult to obtain a residence visa in the UAE.”
Despite Ajman’s attraction as an investment destination, a few pitfalls lie in wait for the unwary buyer. For instance, some developers may fail to complete their projects.
“Ajman announced many projects in a few months and will need qualified people to complete them, most of whom are already employed on Abu Dhabi or Dubai developments,” said Mr Babu. “Either they will have to pay them more, or use low-quality contractors.”
At the Ajman property show, Mehmood Yousuf, a director of Minarat Properties, cautioned that some developers’ eagerness to cash in on the opportunity meant that they were not doing their sums properly. “To my mind,” he said, “given the low sale prices, almost 15 projects I have seen at this exhibition just won’t make it.”
A spokesman for one of the UAE’s mortgage lenders said uncertainty over the viability of some projects was making banks more cautious about lending.
“Mortgages come second, not first, because there is liability there,” he said. “The main concern on the banks’ side is the delivery, because when you mortgage a project you are practically financing it. The shortage of labour, of electricity and water, all affect the capacity of delivery of a project.”
The emirate’s government is, however, acutely aware of the need for regulation and is drafting a new property law and introducing escrow accounts, which should be in force in a few months time. The new law will, among other things, force developers to use all money collected from sales to complete the projects.
“Dubai serves as an example for us,” said Harib al Aryani, the general manager of the Ajman Land Department. “We are not creating a Real Estate Regulatory Authority like Dubai, but a division in our department will oversee the industry. We could transform it into a separate entity in the future if needed.”
But perhaps the most glaring problem is the shortage of essential infrastructure, particularly electricity – a headache that Ajman shares with all of the northern emirates.
“I bought a four-storey building in Nuaimiyah, Ajman Downtown, and already paid 40 per cent,” said a private investor at the Ajman show. “My bank signed a contract to lend the remaining 60 per cent, but is now asking me for a letter from the electricity company stating that there will be electricity by a specific date. But the company wouldn’t deliver it to me, so I can’t have my money,” he said, adding “more than 150 buildings in Ajman Downtown are ready but have no electricity”.
A number of developers are now considering installing their own generators, although some brokers take a more cynical view. “Electricity is a problem but not our concern,” said one broker, who refused to give his name. “We invest and resell shortly after. The problem will affect the end-users.”
Mr Aryani insisted that the government had matters in hand. “The government will of course provide the infrastructure,” he said. “And we don’t care about the cost, because no power means no development.”
Despite these issues, Mr Sassen was bullish about Ajman. “Dubai Marina looked no better than Ajman seven years ago,” he said. “Everybody laughed at the Palm projects, but now they shut their mouths. When a country manages such a gigantic performance as Dubai did, do you really think that they are incapable of organising an electricity network?”
About Ajman Property on The National
Sandcastles-property.com, based in Dubai, has seen a 42% increase in enquiries for Ajman property during the first half of 2008.
Unspoilt white sand beaches, warm turquoise waters, five star hotels, international restaurants and a booming property market, Ajman, the smallest of the seven Emirate states, is currently attracting a lot of interest from savvy property investors looking for an alternative to the Dubai property market.
With a population of about 80,000, Ajman is just 30 minutes drive from Dubai’s international airport. Holiday companies such as Kuoni have recently added Ajman to their brochures, offering stays at the five star Kempinski hotel.
The largest new development in Ajman is the recently announced Al-Zorah project, a new ‘city within a city’ which is currently being developed in a joint venture between Solidere Management Services and the government of Ajman at a cost $15billion.
The master plan for the project includes residential buildings and villas, a commercial office district, marina, golf course, entertainment projects, hotels, hospitals and schools. A highway connecting the development directly to Emirates Road will also be built, in order to allow investors in Al Zorah to commute to the other Emirates. The project is currently under development and is scheduled to be finished over a 16 year period.
Rami Dabbas, head of real estate development, Ajman Investment & Development Authority, CEO of Aqaar Properties, said: "We are trying to recreate another Monaco. The project will spread across an area of about 10 million square metres of existing land.
"We are not reclaiming any land and even if we do, it won’t be much, as we have enough space to develop. Al Zora is definitely going to put Ajman on the map as a world destination."
Sandcastles-property.com, based in Dubai, has seen a 42% increase in enquiries for Ajman property during the first half of 2008. "For property investors looking to get into an area at ground level, Ajman property offers great value for money and is an excellent alternative to buying Dubai property." Said Zuber Mohsan, CEO for Sandcastles.
"We currently have a number of properties for sale in Ajman, but when the Al-Zorah project is up and running we expect both interest and prices of Ajman property to rise dramatically," added Mohsan.
The Emirates has seen its population grow by almost 75% in the past decade. As a result, new property laws have had to be introduced in order to accommodate nationals and non-nationals. Ajman has led the UAE in this respect, being the first emirate to offer 100% freehold rights to non-nationals in 2004.
Ajman Property News on PRLEAP
More on Ajman Property Returns
Property for sale in Ajman could rise in value by as much as 40 per cent during the next six months, market experts have predicted.
The claim was made by several property professionals ahead of this week's R&R Local Property Show in Ajman, reports GoWealthy.com.
Tessa Morris, marketing director for the event's organiser DSL Exhibitions, said that confidence is high among property professionals in both the residential and commercial sectors in the emirate.
"Over the last six months, we have seen some major announcements out of both Abu Dhabi and Northern Emirates, particularly Ajman," she explained.
Ms Morris added that those developments include plans to build a new airport and the creation of a new bank intended to "support the real estate industry".
Investors will be hoping the market in Ajman follows the same pattern as property for sale in Dubai, where the value of houses has increased by 78 per cent in the past year, according to a recent report by Colliers International.
Breaking news provided by Real Estate TV, specialists in Ajman property for sale.
About Ajman Property on Property News
Related News: Ajman Property Returns
Crescent Towers, a residential project by Al Jabal Holdings, has officially been launched in Ajman Property.
The project, located in Ajman's Marmooka City, comprises three residential 18 storey towers designed by Adnan Saffarini Engineering Consultants.
The Crescent Towers is Al Jabal Real Estate's first development. Due for completion in October 2011, each floor will have nine spacious apartments ranging from studios to one bedroom, two bedrooms, and three bedrooms.
Set in the rapidly developing city of Ajman, on the 12 lane Emirates Road highway connecting Ajman to Dubai, the Crescent Towers is a short distance from the Arabian Sea.
Ajman Property News from Khaleej Times
The Ajman Marina Company has announced the appointment of its Board of Directors.
Following a lengthy selection process, all appointments have been concluded, and the Board is now in place.
'This is a critical step forward for the Ajman Marina Company,' says Mr. Abdullah Al Majed, Head of the Ajman Marina Company's Executive Committee. 'In order to ensure not only the success of the project's development, but its maintenance and sustainability in the future, we needed to appoint a Board that comprises a team of specialist talent.'
Chaired by H.E Sheikh Rashid bin Humaid Al Nuaimi, the Ajman Marina Board of Directors is further composed of Sheikh Suleiman Al Majed, Mr. Abdullah Al Majed, Dr. Ahmed Al Samerai, and Mr. Rami Dabbas, who is also a member of the Executive Committee.
Industry opinion leaders have expressed their support for the Ajman Marina Company's choice of directors, the general consensus being that these gentlemen are well equipped with the leadership capabilities required to steer a project of such magnitude to success.
The Ajman Marina project, for which the master plans have been designed by world renowned design gurus, HOK, is set to transform the emirate of Ajman - the smallest of the seven, into a vibrant, bustling seaside hub for business and leisure.
Launched in October of 2007, the $3bn project represents major growth for the Ajman real estate and tourism sectors, offering a host of facilities and amenities all within a single area, and boasting state-of-the-art housing, designed to the highest of standards.
The multi-purpose project will provide residential accommodation for 21,000 new residents and a number of commercial and entertainment areas which cover over 3 million sq ft, with a built-up area of 14 million sq ft.
Units in the project are available to all nationalities on a freehold basis.
About Ajman Property : AME Info
With total investments reaching around Dh400 billion, Ajman property market has succeeded in attracting vital resources for the growth of the emirate's economy, thanks to the Ajman Government's efforts to develop the sector.
Rami M Dabbas, Chief Executive Officer of Aqaar Properties, and the representative of the government in its joint venture projects with the private sector, told Emirates Business in an interview about the company's 12 towers and the Ajman One project.
Aqaar Properties started with Dh250 million and after just 17 months of operation, has projects valued at around Dh7bn, he said. Also, as the head of Ajman Real Estate Development and Ajman Investment and Development Authority, he spoke about the government's vision and plans to further boost the real estate sector by improving infrastructure, especially expanding water and electricity projects.
Ajman News from Zawya, 2 June 2008
Dabbas talked about the different projects in Ajman and analysed the property market in the emirate. He said the property marked in Ajman has seen rapid bookings which is a reflection of the confidence of investors in the young market. Ajman's success in this sphere was beyond expectations, he said.
Let us start with Aqaar Properties. Tell us about the company.
Aqaar was formed in 2006 in association with Ajman Development and Investment Authority (Adia). It was set up to spearhead the expansion of Ajman into a successful tourism and business hub by developing a number of projects to support the Adia's mission of economic diversification. Aqaar's long-term vision is to expand its influence outside its home emirate and beyond the UAE's shores. Our first project is Ajman One.
What was the capital of the company? And what are your assets now?
We started with a Dh250 million paid up capital and after 17 months of operation the value of our projects have reached Dh6 billion to Dh7bn.
Ajman's property market is known to be competitive. Many developers have chosen Ajman for their investments and provided a range of facilities. How did Aqaar Properties grab the attention of clients in such a competitive market?
Our vision is to enrich the lives of our stakeholders by leveraging our unmatched real estate expertise and provide a smart alternative to the market by delivering lifestyle solutions at an excellent value. And our mission is to build a compelling and passionate lifestyle brand that delivers excellent customer satisfaction, sustained through the right professional expertise and in-house CRM systems, with a genuine commitment to deliver.
Planning successful developments requires insight that can only be acquired by significant research and investment into understanding the ever-changing landscape of the property market. There is also a need to understand the end-user's requirements. Decisions made today will affect the daily lives of people who will ultimately live in the projects. It is also vital to keep abreast of technology that can be incorporated into the buildings. Infrastructure advancements and the evolution of design is an important element of Aqaar's success.
If there was one key reason behind your success, what would it be?
Our success can be attributed to the confidence and trust that we have built in our investors and buyers. Confidence is the key factor for the success of any developer.
Although there is no definite property law in Ajman, from the first day Aqaar applied for an Escrow account with Abu Dhabi Commercial Bank. And our sale contract stipulates that the buyer is a member of the project's owners' association.
Please tell us about Ajman One.
The Dh3bn Ajman One is a mixed-use development on a 72,000 square metre plot featuring residential, commercial and hospitality complexes consisting of 16 towers.
It also has a hotel, convention centre, and leisure and retail amenities and is located on the coast. The project is divided into two phases. Phase one has 12 residential towers and the second phase of the project comprises three commercial towers, a hotel and convention centre.
What is the progress on Ajman One?
We have sold out 96 per cent, or 3,500 apartments, in the 12 residential towers that we started constructing in January 2007. This was beyond our plan – which was to sell the project in three years. The project offers freehold ownership, a reason that could be behind such a rapid sale.
In June, we will launch three towers that form Ajman One's second phase. The towers will be allotted for offices and a fourth tower will have a hotel and serviced apartments. This phase is the first business hub in Ajman. The hotel is linked to a convention centre and we have signed an operations and management contract with a prominent hotel management company.
Can you name the hotel's operator?
All I can say at present is that the operator has extensive experience and is already managing hotels in Dubai. The name will be revealed after the agreements have been signed by both parties.
What facilities will the business hub phase of the project offer?
Phase two offers freehold ownership and free zone operation rules. The buyer can immediately get an investor visa whereas employees' visas can be granted after the hand over of the office space to the owner.
What is the value of the second phase of Ajman One? And what is its progress so far?
The one million square foot project is worth Dh1.8bn. We have finished the designs and now eight contractors have submitted their bids, which we are evaluating.
Being the government's representative in many joint ventures and the head of the real estate development, can you tell us about the soon-to-come Property Law?
The law will be announced very soon and will aim to address the needs of all parties involved in a development. Its stipulations include Escrow accounts and the formation of an owners' association. After the draft law was prepared, it was sent to developers for their comments, which the government has taken into consideration in its review. Getting the opinion of developers was essential to frame the most appropriate regulations.
What, according to you, is the market trend in the property sector?
There a common trend among expatriates residents to own a house in the UAE. Also, many people overseas who are looking for a second home are choosing Ajman. Most of the buyers in Ajman One were expatriates and a significant portion was foreigners living outside the country.
What are the new projects to be rolled out by Aqaar Properties?
We are working on a project worth more than Dh3 billion, which is totally different from Ajman One. The new project is for the high end of the market in terms of location – at Ajman Corniche – quality and design. It is a multi use residential, luxury and tourist project, comprising condominiums, duplex houses, restaurants and entertainment facilities at the beach. The project will reclaim 140,000 sq mt from the sea and will offer a marina for 70 boats up to 45 feet in length.
What is the progress on it so far and when is it going to be launched?
We have signed a contract with the Australian company EDAW for the design of the project. We have already assigned a consultant for the marina and another consultant for the transport. The project will be officially launched at the next Cityscape Dubai event. The progress so far is smooth.
The price of property has been going up in the past five years in Ajman. What do you think is the rate of increase?
Over the past five years, prices have generally increased by more than 150 per cent. And I can tell you that our prices, since we started operations 17 months ago, have increased by 45 per cent. We started selling at Dh400 per sq ft and now our price is more than Dh700 per sq ft.
Do you think there is a shortage of office space in Ajman?
Yes indeed. There is a big shortage of office spaces in the emirate and this has prompted owners of residential and commercial building to opt for renting apartments to companies. However, the second phase of our Ajman One project will provide a total area of one million square feet for offices. The project will help meet future needs of the emirate and will help attract companies and businessmen here.
Being a member of the Al Zorah Development Company's Board of Directors and representing the Government of Ajman on the board, can you tell us about this massive project?
We sold Dh10bn worth of properties in the Dh220bn project during the pre-launch phase. On May 7, we closed pre-launch sales. The project is a 50/50 partnership with Solidere International and has a built up area of 22 million sq mt.
It is a sustainable city as a single development. Apart from the residential buildings it will have hotels, schools and health centres. It is one of the biggest single developments across the UAE and will provide accommodation to about 200,000 people.
Following the directions of His Highness Sheikh Humaid bin Rashid Al Nuaimi, Member of the Supreme Council and Ruler of Ajman, the project aims to project Ajman as the future business and residential hub in the region. It is scheduled for completion in the year 2023. We will start with providing infrastructure that includes the construction of a road that connects the project with the Emirates Road.
Providing electricity and water is a challenge for new projects, especially in the Northern Emirates. Are there any initiatives being taken by the Ajman government to prevent electricity and water shortages in the emirate?
Power and water are a real challenge. The government of Ajman will not allow this problem to form an obstacle for the developments in the emirate. The government is studying this issue very seriously and has given it top priority. Officials are discussing ways to attract investment in this vital sector. Even developers are encouraged to invest in this service sector.
Can you tell us about the Dh11bn joint venture Ajman Marina in which you are the government's representative?
In June we will offer some plots in Ajman Marina for sale. Part of the project will be developed by private companies and the rest by the Ajman Marina Company.
Beginning June, we will start land reclamations and the construction of the Marina wall, which will together cost us Dh170m.
What do you estimate as the total value of the property market in Ajman?
With the launch of Al Zorah, the value of the property market has reached Dh400bn.
PROFILE: Rami M Dabbas, CEO of Aqaar Properties
Rami M Dabbas, a Jordanian, started his career with Dar Al Handasah-Shair and Partners. He worked for Emaar from 1998 to 2005 as Director Projects and then moved to work for Ajman Government. Currently, he holds multiple positions in the emirate.
He is the Chief Executive Officer of Aqaar, the Head of Real Estate Development at Ajman Development and Investment Authority (Adia), a member of the board of directors of Al Zorah Development Company and member of the board of directors at the Ajman Marina. Dabbas has a bachelor's degree in Civil Engineering and an MBA from Syracuse University, New York.
As part of its Dh1.5 million, non-profit project, Ajman is all set to launch a low-cost taxi and bus transport system servicing two fixed routes for a nominal fee of Dh2 or Dh3 per person.
"The purpose of this initiative is to make the lives of residents easier and reduce traffic congestion," said Abdul Karim Abdullah Al Abdul, Director General of Ajman Public Transport Corporation (APTC).
The project will be implemented in two phases. The first will see the operation of six taxis and four buses from Mushairif intersection to Lulu Hyper Market, through the City Centre, the University Roundabout, Al Gerf Industrial Area and the emirate’s downtown.
A second route will connect the Ajman town centre near Al Kuwait Hospital to the Industrial area, passing the old Passport Building, Galfa and Al Humaidia bridges, and the vegetable market.
Al Abdul said APTC staff will drive the vehicles. "People will be introduced to the service when they see our cabs and buses hitting Ajman roads." Extra vehicles will be launched to meet the public’s need during the second phase, including more trips to Sharjah at a fare of Dh3. Plans are also afoot to extend the service to Umm Al Quwain and Ras Al Khaimah.
The move is in line with the directives of His Highness Shaikh Humaid Bin Rashid Al Nuaimi, Member of the Supreme Council and Ruler of Ajman, he said.
Al Abdul added: "We will study residents’ feedback and if the service meets people’s needs, we will further increase the fleet in a way that does not negatively affect other means of transportation."
Indian workers Abdul Malek and Zamal were excited about the new service. They pay more than Dh12 to move inside Ajman and over Dh20 to go to Sharjah. But existing taxi drivers were worried it would hit their commissions.
Ajman News - Xpress News
