- Northern Emirates property market stable
- Minimal relocations between Dubai and the Northern Emirates
- Demand for office space remains stagnant
Average rents in Sharjah are still 38% cheaper than in 2008, as additional supply keeps rates from increasing rapidly, according to the UAE Property Review Q3 2016 report from leading real estate consultancy Asteco.
The report revealed the Northern Emirates property market is stable. Sharjah apartment rents saw minimal changes in Q3, down by only 1%, RAK recorded a 1% rise compared to the previous quarter, while Ajman also witnessed an increase of 1% taking prices close to their 2008 peak levels (only 9% lower).
John Stevens, Managing Director, Asteco, said: “The stabilisation of the market was a knock-on effect, in part, to rental rates in Dubai also balancing out. As a result there was a minimal number of relocations taking place between Dubai and the Northern Emirates.”
New developments in Sharjah attracting investors include Sahara Tower 6 by Al Thuriah, which was announced during Cityscape 2016. Construction of the residential twin tower project has already started and will feature 376 residential units, which are now on sale and due for handover in Q4 2019.
On average, new developments in Sharjah range from AED20,000 to AED35,000 for a studio and AED45,000 to AED90,000 for a three bedroom unit. Rental rates in Al Majaz range from AED25,000 to AED35,000 for a studio, while three bedroom apartments are available from AED48,000 to AED90,000. Corniche prices start from AED26,000 to AED35,000 for a studio while three bedroom apartments span from AED60,000 to AED95,000.
Ras Al Khaimah was the star performer, albeit relatively, with a strong tourism and hospitality offering. Stevens said: “The Emirate currently has 3,600 hotel rooms, and its occupancy rate has risen to 71% with more than 40% of guests from the UAE. Furthermore, the RAK Free Zone, popular with many small and medium-sized businesses, has created both residential and office demand.”
Rental rates for newer buildings in RAK range from AED26,000 to AED40,000 for a studio and between AED85,000 to 110,000 for a three-bedroom apartment.
The rise in Ajman rental rates was attributed to the addition of better quality supply to its stock while also improving its overall offering to residents in terms of retail and road connectivity. High-end apartments in Ajman ranged from AED22,000 to AED38,000 for a studio while three-bedroom apartments were available between AED42,000 and AED72,000.
Rental rates in Fujairah remained stable over the quarter with new supply, such as the Fujairah housing project in Al Taween, which is now 95% completed, expected to be handed over before the end of 2016. Meanwhile Fujairah’s cultural centre has reached 55% completion with handover expected in Q2 2017. Rental rates typically varied from AED23,000 to AED28,000 for a studio and AED45,000 to AED60,000 for a three bedroom.
Demand levels for office space in Sharjah remained stagnant over the quarter with limited new supply entering the city, leaving rates unchanged for Q3.
Stevens said: “The retail sector has started developing rapidly in Sharjah and Ajman as population levels support such expansions. For instance, new food and beverage outlets opened this quarter at the Al Majaz Waterfront and the Corniche areas in Sharjah, whereas the expansion of Ajman City Centre mall to nearly double its current size to 52,000 square metres, is anticipated to complete by the end of Q3 2017.”
A copy of the full Asteco report can be found at http://www.asteco.com/valuation-advisory/overview/
Asteco, a major regional and international real estate services firm and the largest property services company in the United Arab Emirates, was founded in Dubai in 1985. Asteco offers independent market analysis, design development consultancy and valuation services, sales and leasing services, as well as asset and property management services.