Ras Al Khaimah is one of the emirates of the United Arab Emirates in the northern part of the Arabian Peninsula, bordering Oman. It is ruled by Sheikh Saqr bin Mohammad al-Qassimi and has a population of about 250,000 inhabitants.

The city itself as at 2007 had a population of 191,753 and has two main sections, Old Ras Al Khaimah and Nakheel (no relation to the property developer), which lie on either side of the creek which flows through Ras Al Khaimah.

RAK may be small, but it has big plans and is pumping money into several ambitious property projects - 31 real estate developments are underway or at the planning stage.

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Lacking the huge natural resources of Abu Dhabi or the world class infrastructure of Dubai, the smaller members of the United Arab Emirates do have developmental advantages of their own in terms of geographic location and tourist potential.

Ras al Khaimah (population 205,000), the northernmost of the emirates, close by the Omani enclave, reported investment of Dh 100bn in 2006 (approximately $25bn) with the tourism and real estate sectors being particularly active. However, the emirate’s economic plans place industrial development in the key position.

Fujairah (pop. 127,000) has the advantage of being the only UAE port outside the Persian Gulf. Strategic facilities are being constructed to take advantage of this, anticipating any military or naval action that could close the Straits of Hormuz at the mouth of the gulf. These include an oil pipeline from Abu Dhabi and a liquefied natural gas (LNG) storage hub.The latter is a project being undertaken by Dubai Multi Commodities Centre in conjunction with LNG Impel, part of Galveston LNG of Canada. The go-ahead for this important project, representing a capital outlay of Dh 8bn, is contingent on arrangements for Qatar to use the facility. The Fujairah authorities have plans to reclaim two square km from the Arabian Sea for the project.

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The UAE’s RAK Properties is planning to invest Dh1.4 billion ($381.2 million) this year in new luxury developments in the emirate of Ras Al Khaimah and is looking for joint ventures in Dubai and Abu Dhabi.

Mohammed Sultan Al Qadi, the company’s chief executive, also said he thought the firm’s shares, traded on the Abu Dhabi stock exchange, had fallen too low.

‘It should be better…It has been as high at Dh4.8 (dirhams)…with a company like ours with over 70 million square feet (6.503 million square metres) given free by the government we have large assets,’ Al Qadi said.

In November, Ras Al Khaimah, one of the seven emirates in the UAE, issued a decree allowing foreigners to own real estate in RAK Properties projects, following Dubai which kicked off a property boom by allowing limited foreign ownership in 2002.

Al Qadi said he did not expect profits to surge as a result of the law as RAK Properties was facing competition from four other real estate firms in Ras Al Khaimah, although he expected the overall property market to grow 20 to 30 per cent this year.

‘The supply and competition is high and we don’t think the margins will be very high but they will be reasonable.’

Al Qadi said the company was planning to invest Dh1.4 billion in new luxury developments in Ras Al Khaimah this year.

The firm has already started work on a project worth over Dh20 billion in Ras Al Khaimah which will include 10 five-star hotels and almost 4,000 residential units set to be completed by the end of 2008.

Other projects include a residential complex centred around a golf course, two residential towers, and a Dh5-billion residential and commercial development modelled on Dubai Marina, a complex of luxury residential towers outside downtown Dubai.

Al Qadi said he was setting up a financing company with a capital of around Dh1 billion to fund projects for RAK Properties, which he says has capital of Dh2 billion.

‘We have sufficient funds at our disposal for the next few years,’ he said.

Al Qadi said RAK Properties was looking to form a joint venture with one or two firms in Dubai or Abu Dhabi and would seek to enter the medium to lower end of the market.

‘We’ve been talking but it hasn’t taken (on) seriousness yet,’ Al Qadi said. ‘It will likely be with one or two companies… If a good opportunity comes I may move tomorrow.’

Al Qadi said he saw strong demand continuing in the next five to 10 years in the Dubai property market but much of the growth would come in the medium-to-low cost sectors because of an oversupply of luxury projects.

‘In Ras Al Khaimah, we want to show something unique, but if we go somewhere else they may not need deluxe or super-deluxe, they may need middle or lower, and we’ll need to meet that demand,’ he said.

Source: Trade Arabia