RAK Properties sets $816m sales target for 2024 amid higher demand

RAK Properties has set its sights on achieving more than Dh3 billion ($816 million) in property sales this year, up 50 per cent compared with 2023, amid the launch of new projects and higher demand from buyers, according to its chief executive.

The Abu Dhabi-listed company plans to unveil four new projects this year following the launch of the Quattro Del Mar waterfront development in Ras Al Khaimah last week, with the first building of the project comprising 200 units sold out.

The developer has also set a target of 20 per cent annual growth in revenue this year amid a bullish outlook for the property market in the emirate.

“There is tremendous demand,” Sameh Al Muhtadi told The National.

“We are helped with the positioning of Ras Al Khaimah ... everybody sees the value, everybody sees the future of hospitality and services and the growth that RAK is witnessing. We expect that to continue,” Mr Al Muhtadi said.

“Judging from what we saw in our launch of Quattro Del Mar, we are very optimistic that the appetite is still there. In terms of revenue, we are targeting at least 20 per cent growth and now we are hoping that we will do much better than that.”

The company has yet to announce its fourth quarter and full-year financial results but the “results are going to be very positive”, he said. The company reported an 82 per cent annual jump in its third-quarter revenue to nearly Dh174 million, while its profit increased eight times to about Dh17 million.

The UAE property market continues its growth momentum on the back of government initiatives and overall economic expansion, especially in the non-oil sector. Dubai as well as Abu Dhabi recorded strong property sales last year and market prices are expected to continue to rise this year.

RAK Properties, the developer behind the Dh10 billion Mina Al Arab master development off the coast of Ras Al Khaimah, also plans to launch a new hospitality project this year, which “will be a luxury beach resort with brand new residences along with that”, Mr Al Muhtadi said.

The company has “no issues whatsoever in financing new projects”, he said.

“Our leverage ratio is extremely low compared to others in the industry, we have our own facilities and the off-plan sales obviously help, especially when we progress projects at the speed that we are.”

The company is also going through the “exercise of industry rating in preparation for potential bonds if we need to, but with interest rates the way they are now, it’s not the best approach in funding”, Mr Al Muhtadi added. “We expect interest rates to begin to reduce in the third quarter of 2024. We will be depending mostly on our own funding of projects and off-plan sales.”

The developer sold more than 2,000 units last year to customers from 42 countries, including Russia, the CIS (Commonwealth of Independent States) countries, China, Germany and the UK.

Emiratis comprised the largest proportion of buyers of its properties, followed by Russians and Germans, according to Mr Al Muhtadi.

“We expect the demand to continue, based on two factors … yield on investments and value growth in the property prices. We are seeing a good 7 per cent to 8 per cent yield on investments from the rental and there’s very good value to be had in investments.”

Other developers are also boosting their investments in Ras Al Khaimah as the emirate continues to attract tourists and property buyers.

In 2022, Aldar Properties, Abu Dhabi’s biggest developer, acquired a beachfront plot to build its first residential community in the emirate. It also bought two hotels as well as a shopping mall in the emirate.

UAE property company The Luxe Developers also launched a Dh1.5 billion waterfront residential complex in Ras Al Khaimah. The 18-storey building on Al Marjan Island comprises 206 units of one, two, three and four-bedroom apartments, as well as six penthouses and two exclusive sky villas, the company said in July.

Dubai Investments is also building a Dh1 billion residential development in Ras Al Khaimah.

“We expect continued growth and we expect continued interest from international investors,” Mr Al Muhtadi said.

Wynn Resorts, a 1,000-room property with entertainment and gaming amenities being developed by the Las Vegas-based hotel operator on Al Marjan Island, is set to open in 2026.

“I think the Wynn Resorts is a catalyst for a lot of this [growth],” Mr Al Muhtadi said.

Ras Al Khaimah recorded its best tourism year yet in 2023, with 1.22 million tourists, up 8 per cent on 2022 and recording a 24 per cent annual growth in international visitors, according to official data.

We are helped with the positioning of Ras Al Khaimah … everybody sees the growth that the emirate is witnessing

SAMEH AL MUHTADI

Chief executive of RAK Properties