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RAK property projects sold out as zero tax, full foreign ownership attract global investors

Several private developers are setting sights on the emirate’s real estate market to cash in on the demand

Demand for properties in Ras Al Khaimah is growing exceptionally well, mainly driven by investors looking for long-term rental income and short-term holiday home rentals. Numerous private developers are setting sights on the emirate’s real estate market to cash in on the demand, especially after the announcement of the $3.9 billion (Dh14.3 billion) gaming resort Wynn Al Marjan Island in Ras Al Khaimah.

Being developed by local partners Marjan LLC and RAK Hospitality Holding, the hospitality and gaming project will attract thousands of visitors from around the world. This project is expected to boost the profile of the emirate, with high-profile investors pumping money into the projects on Al Marjan Island.

Sold out

“It is high time to look at Ras Al Khaimah, especially Al Marjan Island. There is an unprecedented demand from investors for projects coming over there. The entire stocks on the Al Marjan Island have been sold out. And they are offering exceptionally good returns to investments,” said a real estate executive during a conference recently in Dubai.

He pointed out that a strong secondary market is also emerging for the northern emirate’s property market, which is a good sign of the maturity and stability of the market.

In September, RAK Properties sold out phase one of Cape Hayat on the first day of its launch, reflecting the demand for the off-plan is strong. Cape Hayat is located on Hayat Island, Mina Al Arab, and is a luxury collection of residential apartments with direct access to the beach and views across the Arabian Gulf and Hajar Mountains.

John Allen, CEO of valuation and advisory at Asteco, said the increase of large-scale investments in Ras Al Khaimah by local and international hospitality players marked a new phase of development and has had and will continue to have a positive impact on the real estate market.

The emirate’s property market is proving particularly strong, partly due to its relative affordability when compared to Dubai.

“The primary driver of demand is currently from the investment sector which includes investors seeking long-term rental income, short-term holiday home rentals and/or expectations of capital appreciation. The number of first-time buyers has also increased with many long-term residents seeking to gain a foothold on the property ladder,” he said.

Furthermore, there is also increasing demand for secondary homes, from international buyers as well as UAE residents, seeking a local getaway.

Outlook

Going forward, the northern emirate’s property market is predicted to continue its robust growth backed by supporting infrastructure, complementary policies, and a diversified economy. Over the past two decades, the real estate sector has recorded a substantial increase in development activity and a shift in demographics. “The expansion of the RAK’s tourism sector will continue to promote the construction of hotels and resorts, as well as retail, leisure and adventure facilities, boosting residential demand,” said Allen.

According to Obaid Salami, general manager of Dubai Investments Real Estate, investing in Ras Al Khaimah presents a compelling opportunity for several reasons.

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“Firstly, RAK offers a strategic location with easy access to major markets in the Middle East and beyond. Its proximity to key transport hubs like ports and airports enhances logistical advantages for businesses. Secondly, it has a business-friendly environment with investor-friendly policies, including 100 per cent foreign ownership and zero taxation. This fosters a competitive advantage for businesses and investors alike,” said Salami.

RAK also boasts a diverse economy, with thriving sectors like manufacturing, tourism, real estate, and renewable energy, providing investors with a range of opportunities to diversify their portfolios.

1,000 new units

Most of the new supply is on reclaimed land along the coast, and it represents a significant addition and improvement over existing properties. The coast's growth as a freehold destination has resulted in a variety of master-planned, waterfront, mixed-use (residential and hospitality) developments, including Al Hamra Village, Mina Al Arab, and Al Marjan Island.

“We anticipate that around 1,000 residential units will be delivered within these developments in 2023-24, representing a significant 10 per cent increase in existing stock. In recent years, there has been a surge in activity within these masterplans, with a slew of new project debuts and construction proceeding at pace,” said Allen.

Some of the most recent launches include Dubai Investments agreement with Al Marjan Island master developer in October-November 2022 to acquire land to develop Dh1 billion Danah Bay, a mixed-use waterfront destination with an area of approximately 90,000 sqm with 40,000 sqm of beach.

The development will have 209 villas, a residential tower with 128 apartments and a 300-key 4-star upper-scale hotel, operated by the Millennium and Copthorne Middle East Holdings. The construction commenced late 2022 and the first phase is earmarked for completion in Q4 2024.

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Obaid Salami said the response garnered for Phase 1 is promising and the group aims to keep up the momentum and carve a niche for upcoming projects in the future.

He revealed that Dubai Investments “continues to explore new opportunities and evaluates the market conditions. The group will actively consider possibilities of new projects in Ras Al Khaimah with the aim to contribute further to the region's growth and provide attractive investment opportunities.”

The launches also consist of Bayviews Residences, a beachfront development comprising studios, 1 BR and 2 BR apartments, located on Hayat Island, Mina Al Arab, launched by RAK Properties in May 2023, and a residential beachfront development on Hayat Island, a collaboration between RAK Properties and Dubai-based Ellington Properties.

Additionally, Al Hamra awarded the main works package for the construction of 502 villas and townhouses on Falcon Island (located within Al Hamra Village) ranging from 2BR to 7BR units and UAE-based Luxe Developers broke ground on Oceano, a twin-tower waterfront development located on Al Marjan Island, comprising 206 apartments over 18 floors.

Moreover, Aldar acquired a beachfront plot located on Al Marjan Island, spanning over 430,000 sqft to develop a residential community comprising a mix of over 2,000 branded and premium residences with access to retail spaces, a beach club and 2km of private beach.