Sharjah realty boom is only getting started
PICK-UP IN THE SECTOR WITH SUPPLY COMING DOWN THE PIPELINE DESPITE SELLING PRICES REMAINING UNDER PRESSURE
Freehold and longterm leasehold sales have been on the up all through 2017 and developers are just as willing now to keep the supply pipeline humming through new launches
In Sharjah, there is no such thing as difficult market conditions when it comes to selling property. Freehold and long-term leasehold sales have been on the up all through 2017 and developers are just as willing now to keep the supply pipeline humming with new launches.
“Since September 2017, there have been over 6,000 residential units released onto the market with more happening every month,” said Shane Breen, Director — Commercial Valuations & Consultancy, Cluttons. “Compared to Dubai this may seem small, but it’s a significant number for the Sharjah market.
“Developers are taking calculated steps with their launches to ensure they remain competitive and also taking care to not oversupply. As the market begins to mature and awareness and interest in Sharjah picks up we would expect developers to start to ramp up their releases.
“Sharjah has always been a bit of a surprise package and while it isn’t going to be overtaking the more established markets in the UAE just yet, it is definitely starting to get people’s attention.”
Certainly, the buyer attention is very much there. Recent launches have all had them clamouring for more, and developers such as Arada — owned by high-profile Sharjah and Saudi investors — and Tilal City have been tapping into demand. Another developer, Alef, is also expanding its residential interests, in the University City area.
It could be that Sharjah’s relatively late entry into the leasehold-for-all is a key reason why investors want to get in there. But developers say that is only one factor among many. Sharjah itself is going through a real estate transformation, opening up new areas for fast-track development and even taking on projects that would completely transform established locations.
Big league developers
And it is not just a focus on residential offerings — Shurooq, the emirate’s investment development agency, has been roping in big-league developers to bring about the desired changes to the hospitality and retail spaces. It is in this context that project alliances with Abu Dhabi based Eagle Hills and Kuwait’s Mabanee Group should be viewed.
But it is residential that will continue to drive the momentum. “The government of Sharjah announced major changes to the real estate legislation in 2014 as part of a move to open up the local property market to all nationalities,” said Ahmad Alkhoshaibi, CEO of Arada, which has two large-canvas projects — Nasma Residences and Aljada — going on simultaneously.
“That has certainly incentivised interest in Sharjah as a real estate investment destination. From our own experience, we have now sold 1,400 units in exactly one year since our first project, Nasma Residences was launched.” (For the rest of this year, it will be releasing a further 300 units at Nasma as well as phases 2 and 3 of Aljada, which will number 2,000 units. The multiphase Aljada has a projected gross development value.)
“We’ve seen a huge amount of interest for both Nasma Residences and Aljada, with the majority of buyers being Emirati nationals from all parts of the country,” said Alkhoshaibi. “We’ve also seen a growing number of investors from the Gulf and the wider Middle East and North Africa. Lastly, Indians are starting to take real interest in buying homes in an emirate that many of them have long called home, but have until now not had the opportunity to invest in.”
Real estate entities in Sharjah have also been highlighting the investment potential getting in now could bring. And even as a steady income generating asset for post-retirement funds.
The Arthur Mackenzy Property Group (APMG) is touting a programme that suggests 10-12 rental yield “covering all essential retirement expenses”.
“Forty per cent of our customer base are thinking about their retirement plans and interested in profitable longterm investment,” said Shaher Mousli, Chairman and CEO of AMPG. “We offer a solution to qualify for a residency visa in Sharjah, if you are an investor in Tilal City through us.
“Investors are entitled to apply for a residency permit and our competitive pricing will result in rental yields of 10 to 12 per cent.
“The cost of land in Sharjah is much more affordable compared to Dubai and Abu Dhabi downtown areas, which has led to more generous payment plans, lower deposits and accessible investment opportunities. Hence, rental returns on the same type of residential properties are higher too.”
Developers and investors in Sharjah will want to keep it that way.