When Real Madrid football club made headlines in March 2012 by lending its name to a flagship beach-side resort in Ras Al Khaimah (RAK), part of the United Arab Emirates, it shed light on the accelerating pace at which international investors are vying to get a foothold in RAK. The $1bn Real Madrid resort is emblematic of the fact that RAK has shifted from being the northern hinterland of possibilities to a strategic hotspot for investors wishing to gain entry into countries in the Middle East, Africa and Asia.
Real Madrid’s choice of location bolsters the RAK government's pitch to become an investment destination of choice within the UAE. “This is a strategic project for both RAK and Real Madrid,” says Louis-Armand de Rouge, CEO of the project. “The complex is designed… for the millions of Real Madrid fans around the world, but also for all families wishing to experience an unforgettable moment in a unique place.”
Mazdak Rafaty, managing partner of Germany-based consultancy Ludwar International Consulting, believes that the branding of the project will only intensify interest in a region that has already witnessed considerable inflows of FDI. “When Real Madrid’s deal was announced, I received several e-mails from investors asking to be part of the development,” he says. “One of the major advantages of RAK is that it is part of the UAE, and it has ambitious goals. Its geo-strategic position is interesting for any investor looking to cover the region.”
Self-styled as the UAE's rising emirate, RAK combines scenic coastal beauty with ever-improving infrastructure, aiming to provide investors with a stable climate for their operations, as well as a safe and picturesque environment to live in. “We made a business decision to come to RAK and it was the best decision we ever made,” says Kim Childs, general manager of Pro Scan Middle East FZE, a diagnostic equipment and service provider. “I work with companies and help them develop a strategy for establishing themselves here in the UAE. If I can recommend that a company establishes themselves in RAK, then 100% of the time I suggest they do. RAK is a hidden jewel in the UAE.”
Pursuing a modernising agenda, Sheikh Saud Bin Saqr Al Qassimi, the ruler of RAK, has made great strides in placing the emirate on the investor map. Far from being the only high-profile name in the region, Real Madrid is a recent addition to the expanding list of iconic brands setting up a presence in the emirate.
In 2011, New York-based luxury hotel firm Waldorf-Astoria announced that it was going to take over the management of what was formerly known as the Al Hamra Palace Hotel in RAK. The 349-room, Arabian-themed palace hotel is designed to appeal to discerning travellers and become an exclusive destination.
With the tourism and services sector comprising one of RAK’s key engines of growth – representing 19% of GDP according to official estimates – a number of hotel providers, such as Hilton and Rotana, have made inroads in order to capture the increasing influx of tourists in RAK. Yet far from being the only sector in RAK’s highly diversified economy – in which no single sector contributes more than 22% of GDP – what RAK’s tourism sector highlights is RAK’s unique selling point: its allure as a place to live and do business.
Setting itself apart
With the influx of well-known brands establishing a presence in RAK, it would appear that the emirate is following in the footsteps of Abu Dhabi and Dubai, world-renowned for their opulent, grandiose displays of wealth and glamour. Yet RAK is keen to differentiate itself from its flashier neighbours by preserving its natural landscape. “RAK has one of the cleanest coasts that we have in the Gulf, and it has the biggest strips of beach which are under protection,” says Ludwar's Mr Rafaty.
Chris Darbyshire, who works director for sealing manufacturer Novus Sealing, which has a facility in RAK, says: “RAK will change, just like Dubai is changing, but it will never become another Dubai. RAK has its own agenda.”
Indeed, Dubai’s congested roads and high-octane pace are worlds apart from RAK’s decongested streets and serene pace of life, which is what makes RAK an attractive place for investors to settle and do business. “You are within an hour of anything you need in RAK,” says Pro Scan's Ms Childs. “RAK is a beautiful place, [and investors] have access to a skilled workforce.”
Sharon Darbyshire, commercial director for the Middle East and north Africa at Novus Sealing, also praises the lifestyle that the emirate offers. “If you want to invest here, then you have to look at the whole picture as an investor. It is about life – it is not just about business. In the past three years, we have seen a dramatic change for the better.”
RAK has been hard at work, developing its infrastructure to cater to the growing list of investors that are using the emirate as a base for their operations. Its efforts are far from complete but judging by the number of projects in the pipeline, RAK looks to be well on its way towards realising its economic development dreams.