‘Pivotal’ year for Ras Al Khaimah, says property chief

RAK Properties

• Hospitality puts emirate on map, says RAK Properties CEO
• Developer’s land bank could deliver 2,200 more homes and four hotels
• Plans to launch joint ventures and other business verticals this year

RAK Properties, the Abu Dhabi-listed company developing much of the emirate of Ras Al Khaimah, is seeking to capitalise on rising demand for local real estate. 

It is in talks with several UAE developers and landowners to form joint ventures, according to chief executive Sameh Al Muhtadi.

He declined to reveal names of prospective partners, but said they do not necessarily include the largest developers such as Dubai Properties or Aldar Properties – the latter unveiled plans for its debut Ras Al Khaimah project in November, a 2,000-home community on Al Marjan Island.  

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RAK Properties is also looking to boost its income through recurring revenue streams, such as retail leasing and offering facilities management and other services to third-party clients. 

“Teaming up with property players would help us expand our client base and boost sales by improving our prices on certain products,” Al Muhtadi told AGBI. 

“I’m also interested in building up the proportion of our business based on recurring revenues. It’s a defensive strategy. We’re optimistic about the strength of the market but need alternatives for the future.”

The company recently concluded work with consultancy McArthur & Company to develop plans for a series of retail plazas in the waterfront community of Mina Al Arab. Designs are under way for 152 retail units.

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“Some will be for anchor tenants with whom we are in negotiations, and others will be smaller units – coffee shops, boutiques, pop-ups – to serve the residents of the 3,000 homes we’ve built,” said Al Muhtadi.

Ras Al Khaimah’s expanding hospitality and residential offering is placing it on the map for local and international investors and tourists. The emirate is promoting its unspoiled natural environment and comparatively low property prices to compete with its more established neighbours, Dubai and Abu Dhabi. 

Average apartment and villa prices in Dubai exceeded $3,500 and $4,000 per sq m respectively in 2022, according to consultancy CBRE.

This compares to between $250 and $450 per sq m for residential property in Ras Al Khaimah, up 15 percent year on year, Al Muhtadi said. CBRE does not produce data on Ras Al Khaimah. 

The number of hotel and resort openings grew by 17 percent year on year to more than 8,000 keys in 2022, according to Ras Al Khaimah Tourism Development Authority.

The authority wants to expand the amount of tourists from 1 million to 3 million by 2030, and there are 19 hotels with 5,867 keys in the pipeline from global brands such as Marriott, Millennium, Anantara and Sofitel – a 70 percent increase on the current inventory.

A key driver of future tourism is the planned 2027 opening of the UAE’s first casino resort, to be built on Al Marjan Island by US-based Wynn Resorts with local firms Marjan and RAK Hospitality Holding.

Wynn last week unveiled designs for the $3.9 billion project, which features 1,500 hotel rooms, a gaming area, restaurants and other attractions. 

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“The emirate’s vision for hospitality is expected to be a key driver of local GDP and with that comes growth in other segments,” Al Muhtadi said. “I think 2023 is going to be a pivotal year for Ras Al Khaimah.” 

Increased competition for real estate, for example from Aldar’s entrance, “is to be welcomed”, he added. “It is testament to the fundamental strength of the market and will attract a lot of attention to the emirate and our own plans.” 

RAK Properties’ revenues were down 20 percent last year to AED408 million ($111 million). Net profit was also down, by 84 percent to AED31 million.

The company was a “victim of its own success from 2021”, when it recorded hefty (plus-100 percent) increases as a result of bumper sales at its Marbella Villas and Al Marsa projects, Al Muhtadi said.

Costs associated with the opening of the InterContinental Hotel & Spas on Hayat Island also impacted the bottom line.

“We expect to significantly improve our numbers this year with lots more projects,” he added.

RAK Properties has 2,000 homes in the pipeline at Hayat Island, including a 320-unit residence launching for sale this month and a 640-home scheme in September. 

The 174-room Anantara Mina Al Arab opens in September and two more hotels are planned – a 140-key “lifestyle” property aimed at a younger demographic than the resorts, and 180 serviced apartments. 

The company’s land bank could accommodate 2,200 more homes and four more hotels, Al Muhtadi said. “From 2025, we may look to identify new growth areas and do deals to expand our land bank.”