Two years ago, United Arab Emirates development was largely restricted to Dubai and Abu Dhabi, but the sharp economic growth has made the country live up to its name when it comes to realising its real estate potential.

Dubai and Abu Dhabi have been victims of their own success, with limited office supply forcing the outwards growth. While the likes of Ajman and Al Ain may have realised their own potential unprompted in time, it is fair to say that Dubai’s frenzied development and Abu Dhabi’s bold plans have forced their hand – this, coupled with an acknowledgement among investors and developers that the smart returns may now lie in less-developed areas.

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A group of six investors led by property development and investment firm Snasco recently launched the Sharjah Investment Centre (SIC), another major commercial/industrial project in the Dubai Investment Park mould. The 2.97 million square metre (m2) site will have a logistics park, commercial centre, light and medium industries, two hotels and residential buildings. Snasco will invest around $544m to develop the project with local partners.

The SIC, the first private sector mixed-use industrial development in the city, has chosen a smart location, close to Sharjah International Airport on Emirates Road and opposite Al Hamriya Free Zone, which should appeal to time-conscious importers and exporters.

Sharjah’s commercial interest does not end there. Its Palm-style offshore development, Nujoom Islands, will feature 10 islands divided into 13 sectors – and there will be a commercial element amid the 18 million m2 residential community. The Sharjah Commerce and Tourism Development Authority says Sharjah’s commercial sector is developing rapidly, with up to four new hotels coming on stream this year. Tourism-related investments in the emirate are adding up to Dh2bn.

Bigger picture

Neighbouring Ajman is also looking at the bigger picture with its Dh15bn Emirates City, a colossal town-sized freehold development, which will contain 72 residential and commercial towers. Phase 1 includes the construction of 25 towers, followed by the downtown area. Its other eye-catching project is Al Ameera Village, a Dh1.2bn ($326.7m) freehold project on the Emirates Road, which will have a residential and commercial mix.

Further north, Umm Al Quwain emirate is benefiting from a similar ripple effect as development spreads out from the cities. The developer of the 50 million square foot Emirates Modern Industrial Area, Tameer Holding Company, is selling constructed freehold warehouses starting at Dh150 per square foot. Featuring plots for residential, commercial and industrial purposes, the industrial area has cost Dh250m including the infrastructure building cost. The industrial area is built on a total space of about 24 million m2.

“It will certainly constitute a major turning-point in the industrial areas concept through providing services and facilities for those interested in the investing in it,” says Omar Ayesh, Tameer Holding president.

Industry spread

Projects worth about Dh9.1bn, spanning various industries, have been announced in Fujairah. The eastern emirate’s largest deal, an agreement between the Fujairah government and a Ukrainian company, involving oil and natural gas exploration in Fujairah and Abu Dhabi, marks a Dh5.4bn investment. Fujairah was chosen because of its airport and seaport access, and other available electricity, water and gas supplies.

The Fujairah Free Zone is still attracting many businesses, claiming total investment of about Dh2bn. The zone experienced a 30% increase in the number of new companies registered with it last year, and its turnover has surged to more than Dh1.2bn, compared with Dh1bn in 2003.

Fujairah’s government has started work on a new sewage system, slated to cost about Dh900m.

On the radar

The east coast, still undeveloped compared with Dubai, is now firmly on the radar of developers as the countrywide hospitality wave accelerates. Rotana Hotels will increase its resort portfolio with the Fujairah Rotana Resort and Spa, due to open this year in the Aqah beach area. The property will have 250 deluxe rooms and chalets, a wide variety of food and beverage venues, meeting rooms, a state-of-the-art fitness centre and an extensive choice of water sport activities all set in an idyllic beach front landscape.

The ‘Garden City’ of Al Ain, near Abu Dhabi, retains an industrious outlook. In one of the largest deals, Al Ain Cement Company will build a Dh1.3bn cement factory that will produce 2.7 million tons of clinker annually (7500 tons per day). Another cement factory will be established in the Al Tawiyeen area at a cost of Dh367m.

The Abu Dhabi Investment Company is preparing to set up an iron and steel factory in Fujairah, along with some strategic partners. The factory will produce about 1.2 million tons of iron per year in addition to 1.1 million tons of steel.

The Higher Corporation for Specialised Economic Zones in Abu Dhabi launched Al Ain Industrial City this year. The project is part of the rapid economic development and tourism expansion of the Garden City in recent years. The city aims to make the Abu Dhabi emirate, and not just the city, a magnet for economic development.

Investment in transport infrastructure continues apace, as the UAE endeavours to provide the missing links to its fast-moving economy. Work on the $4.2bn Dubai Metro is well under way. WS Atkins has appointed Turkish Metro JV (JTMJV) as design programme manager and detailed designer for its design and build contract covering phase 1.

JTMJV, together with Mitsubishi Heavy Industries, form the Dubai Rapid Link consortium tasked to deliver the operating railway. JTMJV has engaged Atkins as lead consultant for all works comprising the phase 1 Red Line, including 26 stations (four underground), 53 kilometres of viaducts and tunnelling, and all associated infrastructure and building works. Construction of phase one is due to be completed by June 2009.

Airport expansion plans

UAE airports are investing more than Dh46bn in airport expansion projects, which will increase their capacity from 33 million passengers annually at present to 120 million passengers by 2008. Apart from the $4.1bn revamp of Dubai International Airport and $600m revamp set for Abu Dhabi, Sharjah is spending $22m on a new terminal, and outlying airports such as Ras Al Khaimah, Ajman, Al Ain and Fujairah are all earmarked for major development.

The $30bn Jebel Ali Airport City is set to eclipse the lot. The vast 140 square kilometre site will be capable of handling up to 120 million passengers and 12 million tons of cargo a year.

The entire airport site, branded World Central, encompasses all sectors within the JAAC Commercial City, Logistics City, Aviation City, and Science and Technology Park as well as the Residential City, Golf Resort and Exhibitions City.

The airport is expected to be ready to receive its first aircraft by the first quarter of 2007 and the Dubai Airshow will be hosted at Jebel Ali from 2009. By the time its six runways are fully up and running, the UAE’s commercial sector will be undoubtedly be flying high.