Ras Al khaimah (RAK) sits at the northernmost point of the United Arab Emirates, crowning the kingdom with a stretch of coastline which is set to become a successful international tourist and business destination in the mould of neighbouring emirates Dubai and Abu Dhabi.
Until recently, RAK’s role in the kingdom’s rapid development lay in its rich limestone reserves, used to sustain the real estate boom in the UAE. While RAK will continue to supply materials for cement production to the rest of the country, the emirate has started a journey of economic development and diversification of its own.
Under a business-minded leadership, the emirate is now attracting the attention of global investors, from India and south-east Asia to Europe and the US. These investors are seeking the opportunities which the rapidly growing area has to offer at a considerably lower cost than some of the more economically heated investment locations in the Gulf.
RAK’s leadership has a vision of emulating the dramatic growth of neighbouring emirates with a programme of real estate and infrastructure development, which will see the entire coastline of the emirate developed from marshland to beachfront. There are also plans for offshore residential and leisure complexes, the new Gateway City and large-scale conference facilities.
In order to put RAK on the international business and tourism map, the government is developing the international airport with the aim of positioning the emirate as a distribution and logistics hub as well as providing access to Dubai which is only an hour’s drive away. And a proposed rail network connecting the entire UAE will reduce the journey time to Dubai to 20 minutes.
The establishment of the Ras Al Kaihmah Investment Authority (RAKIA) in 2005 has helped to drive the enormous economic growth in the emirate, which has seen GDP increase by more than 50% during the past four years. Within three years of its inception, RAKIA managed to attract more than 1600 companies to the emirate and amassed more than $2bn in industrial investments.
Foreign investors launching operations in RAK originate from across a broad range of sectors. According to RAKIA, approximately 30% are commercial companies, 28% are industrial and 21% are consultancy and service companies. Many of these have been attracted to RAK’s three free zones, established by RAKIA with the aim of providing foreign companies with a business-friendly entrance to the region.
In terms of the real estate sector, RAK provides an opportunity for international property buyers and developers to look at a cheaper alternative to the Dubai market. The emirate can also offer an alternative to high-rise living. RAK’s housing stock is predominantly low-rise apartment blocks as well as resort complexes with associated facilities, including gyms, spas and private beaches. One of the leading resorts with property for sale is the Al Marjan Islands development, a man-made offshore development in the style of Dubai’s palm island developments.
This $1.8bn tourism development is being built in the south west of RAK, approximately 27 kilometres from the city. Al Marjan Islands will comprise five man-made coral-shaped islands, covering more than 2.7 million square metres and extending approximately two kilometres into the Arabian Gulf. Plans include the construction of 10 major hotel sites, 50 large villa sites, a marina and marina village as well as a water theme park. The project will include a sub-development called Gateway City, a commercial and residential development planned in five phases, which will accommodate 150,000 residents by 2012.
RAK has 250,000 inhabitants, most of whom live in the city of RAK itself, which has a population of 219,897. But the authorities are expecting to capture some of the tremendous population increase that the UAE is experiencing. RAKIA’s rapidly growing portfolio of property projects has been commissioned to provide complementary facilities and a good standard of living for investors moving to the region. RAKIA predicts it will have a portfolio of real estate projects worth $10bn by 2010, aimed at addressing lifestyle requirements of potential and existing investors in the emirate.
With the increase of foreign firms in the region and available accommodation under construction, RAKIA hopes to maintain economic growth rates with a number of business reforms, instituting new laws and regulation and enforcing business-friendly policies to attract further local, regional and international investors.
RAK’s rules on foreign ownership and provision of free zones, along with political stability and zero crime rates, makes it one of the safest places in the world to do business and to live. With an increasingly robust infrastructure and logistics support network as well as one of the lowest conversion costs of manufacturing, the emirate is a highly competitive location for global manufacturing firms.
RAK’s strategic location between east and west gives it access to global markets spanning the Middle East, Africa, the Indian sub-continent, CIS countries and Europe. Continued growth and international investment will be driven by a continued focus on manufacturing and services, real estate, construction and tourism. The hope is therefore that RAK will become a global manufacturing and financial hub and one of the Middle East’s premier tourism destinations of choice.