Ras Al-Khaimah continues to push its big ambitions to be a player in the UnitedArab Emirates regional investment boom, with major property developments getting under way. Pushed by Crown Prince and Deputy Ruler SheikhSaud Bin Saqr Al-Qasimi, RAK is looking to bite into the financial services business now being fought over by Dubai,Bahrain and other centres.RakeenRakeen chief executive Imad Haffar told GSN recently that, "our feasibility study on the outsourcing (offshoring/ nearshoring) of financial services have shown that by taking 1% of the $57bn worldwide outsourcing of financial services consisting for example of payroll, audit, call-centres for banks and other financial back-office services, RAK Offshore will contribute to a significant share of RAK's growth."

RakeenRakeen is developer of RAK's flagship Al-Marjan Island project, costed at $1.7bn. Located within the Al-Marjan island financial city premises RAK Offshore will consist of residential and commercial units catering for offshore companies, and more than 80 have already registered.

"We've got German, French, British and Asian companies coming in,"RakeenRakeen's chairman - and advisor to Crown Prince Sheikh Saud - Dr Khater Massaad told GSN. These include 15 ancillary service providers, insurance and financial companies.

Haffar said these companies were "registered but not signed up to office space yet." He added, "we already have a dozen multi-national and GCC companies that have expressed a commitment in acquiring office space for setting up their regional and back office operations."

According to RAK Offshore regulations, incomers are required to have their office in the new RAK Financial City, as opposed to anywhere else on the island.

According to Haffar,RAK has its own distinct identity and is a more attractive investment option than the other emirates.

He pointed to RAK's higher anti-money laundering compliance standards, a 30% cheaper rate for setting up compared to the larger emirates and no red-tape.

Although the RAK Offshore centre is government-owned, the buildings have been financed through a combination of equity and leveraging from banks. "In all our projects we depend on equity, presale income, joint venture partnership and loans," Haffar said.

The Iranian factor
Underlining RAK's preparedness to do business with the Islamic Republic despite outstanding territorial disputes, one of RakeenRakeen's major overseas developments is in Iran with a project on an estimated 1.5m m2 of land to include hotels, commercial complexes, a shopping mall, travel agencies, bank branches, restaurants, cinema and recreation facilities, exhibition space, roof-top parking and a helipad.

Haffar told GSN:"there are great investment opportunities in Iran, particularly in real estate. Today, many Iranians come to Dubai for shopping, because of the availability of nice malls and retail areas. By creating such retail style in Iran, there would be great interest." It will be located on the crossing of Vahid Dastgerdi highway and the Esfahan ring way, and is due for completion in 2010.

Investors in the project are RakeenRakeen, state-owned RAK Ceramics, Khorshid Sepahan (a private RAK/Iranian joint venture, also investing in commercial and residential projects in Iran), and Sharjah-based International Construction and Trade Company (ICTC), a supplier of structural and steel systems.

The projects' designers are Cadiz International and Tehran based Naqsh-e-Jahan-Pars. With a floor-print of over 103,672m2 of land and situated near the business area, it is to be built in two phases. The initial phase includes the shopping mall with a total area of 144,235m2.

Additionally, a 25-storey 7-star luxury hotel with an area of 51,275m2 will be located over the mall,which will incorporate restaurants and sport facilities. The complex will also include an office tower, a 3-star hotel and an exhibition centre.

Earlier this year, RAK Ceramics established a ceramics factory in Esfahan.

ICTC's chairman is Sheikh Abdullah Bin Mohammed Al- Qasimi, younger brother of the aged RAK Emir Sheikh Saqr.

Sheikh Abdullah, born in the early 1920s, has been chairman of Sharjah Municipality for a number of years. His father, Sheikh Mohammed, rejected the RAK rulership in 1948, effectively handing the throne to Sheikh Mohammed's brother Sheikh Sultan Bin Salim Al-Qasimi; however, Sheikh Saqr deposed his uncle, and has been ruling ever since.

© Gulf States Newsletter 2007

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