Interview: Sheikh Sultan bin Ahmed Al Qasimi
What factors are driving demand for mixed-use developments in Sharjah’s property market?
SHEIKH SULTAN BIN AHMED AL QASAMI: Sharjah has long provided a cultural and family-oriented environment, and has more affordable local real estate and living costs than many other emirates, but we believe there is pent-up demand in the local market for well-designed, contemporary communities that have integrated amenities at an accessible price. Given the significant disparity between the number of residential transactions annually in Dubai and Sharjah, there is strong growth potential, and the level of recent sales from local developers shows that the issue for the Sharjah market has been supply rather than demand.
Sharjah’s property market has not suffered from oversupply, as the local residential offering continues to attract strong demand from GCC and Arab nationals. Overall, economic trends in Sharjah look positive, with growth expected to be consistent at approximately 4% annually until 2020. In addition, the population has increased by more than 15% since 2014, supplemented by a tourism sector that saw visitor numbers rise by 17% in 2016.
The residential segment was also given a significant boost in 2014 following the government’s decision to allow non-GCC nationals the opportunity to purchase property in designated developments. This opened the market to long-term residents, who are now able to secure their roots within Sharjah.
How would you characterise the current payment models in terms of facilitating investment?
SHEIKH SULTAN: Local developers in Sharjah have had very few challenges with existing payment systems due to high liquidity from local investors and end users. Most customers remain focused on value proposition rather than post-payment financing options and although the market remains buoyant with strong demand, developers are starting to target buyers who are looking towards the longer term. As such, many projects within Sharjah and the UAE now provide flexible payment structures. For example, our projects include plans that offer upfront payment options in 30:70 and 40:60 ratios and developers also cooperate with local banks to facilitate financing options for buyers.
Most buyers at the early stages of a project are investors, since end users generally prefer to purchase after construction has been launched, but as Sharjah has one of the highest yields for rental property in the region, investor interest remains strong. A large number of GCC and non-GCC Arab residents are investing in local property while other markets, such as long-term residents from India and Pakistan, are purchasing leaseholds.
To what extent can new real estate developments promote Sharjah’s international visibility?
SHEIKH SULTAN: Targeted investments in real estate will raise Sharjah’s international profile and help diversify its future economic growth away from established sectors. Although Sharjah’s real estate market is already one of the top three property investment destinations in the region, many of the new developments have the potential to reshape the vision of the emirate. This is because they offer modern facilities and infrastructure, while still remaining close to Sharjah’s heritage and culture in their design. This trend is influencing local projects, with many now including parks, more open spaces and leisure facilities, which is quite unique within the GCC market. Having a combination of residential, retail and commercial components in its upcoming projects will help position Sharjah as a regional hub. In addition, new developments will benefit from the emirate’s attractive, central location, which has access to well-connected road infrastructure as well as the international airports of Sharjah and Dubai.
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