Ajman is new property hotspot

29 June 2007

Dubai: Ajman may be the smallest of the UAE's seven states at only 260 square kilometres, but its property sector is one of the country's most active.

Close to 200 freehold residential towers are either under construction or have been completed since the city's freehold property sector kicked off in 2004.

With the possibility of 100 per cent ownership rights and guaranteed residency visas for buyers, the emirate has attracted strong investment from GCC nationals, expatriates and overseas buyers.

"All of the northern emirates are witnessing major real estate development, but Ajman is possibly the most active in terms of construction," said Roger Wilkinson, managing partner of Northern Emirates Property, a Sharjah-based property leasing and management company, which runs the website Ajman Property.com.

The city markets itself as a place to get away from busy city life, but getting away from Dubai's high rents seems to be a key reason for moving there. Average outright purchase prices are also significantly less - up to four times lower than in Dubai, said Wilkinson - and flat sizes tend to be bigger.

Target

Real estate companies are only able to offer affordable housing aimed at mid-income earners if they can keep their initial development costs down.

Amir Ameen, director of Star Giga Establishment, said the land price in Ajman for his Dh700 million Goldcrest Dreams project was around Dh40 per square foot compared with about Dh150 in Dubai.

At the project launch, the 1,600 apartments within the four building project started at Dh285,0000 for a one bedroom apartment and climbed to Dh416,000 for two bedroom apartments.

Ajman's close proximity to Dubai is another plus point. The 35 kilometre drive can take as little as 20 minutes or more than two hours. New highway and rail connections are expected to shorten the journey.

However, the emirate does not want to be considered merely a satellite town to house Dubai workers. According to Wilkinson, who has monitored Ajman's real estate development for more than 15 years, the emirate is attracting commercial, retail and hospitality investment, as well as improving its general infrastructure and boasting major banks and retailers.

As amenities increase and transport links improve, prices invariably climb - good reason for investing now, say property agents. The city currently lacks mortgage facilities, but once these are introduced, buyers will be able to finance bigger purchases, which would in turn drive rates up.

Average prices for freehold property are now Dh350-550 per square foot, says Wilkinson, but can be as high as Dh750-950 per square foot mark for more luxurious projects. Rents have gone up by 10-20 per cent since the start of the year, he added.

Lisa Dale, head of Al Tamimi & Company's property department, said Ajman allows a maximum rent increase of 20 per cent after the first three years of a contract.

Although the market is less mature than Dubai, meaning prices will continue to increase while the Dubai market eventually stabilises, there will always be a gap between the two, say major developers.

"I'm sure prices will increase but they will never reach the level of Dubai," said Omar Ayesh, president of Sharjah-based private developer Tameer, which is developing Al Ameera Village in Ajman.

Private developers show increasing interest

Ajman's freehold property sector opened up in July 2004 with the launch of Al Naeymiyah Towers - a 15-tower development split into two phases.

Purchase prices during the launch of the first phase were just Dh157 per square foot and increased to Dh180 per square foot for the second phase.

Developed by the government of Ajman, which acts as a master developer for the emirate, the project has been completed - proof that the city can deliver major residential projects and a major confidence booster for property speculators and end users, said Roger Wilkinson, managing partner of Northern Emirates Property.

Since then, projects including Rashidiya Towers, a complex of 11 buildings which sold for Dh220 per square foot on launch, have been delivered, while the nine-building Al Khor Towers development is scheduled for completion by the end of the year.

Other major projects scheduled for delivery by 2010 include Horizon Towers, Falcon Tower, Ajman One and Corniche Tower.

Although most of these are developed and financed by the Ajman government, some land plots have been snapped up by private developers.

Star Giga Establishment last year launched a Dh700 million freehold residential property development at Paradise Lakes on the Emirates Road.

Goldcrest Dreams will contain 1,600 one and two bedroom apartments and is scheduled for delivery in mid 2009.