Overseas buyers dominate in Sharjah’s reformed real estate

Arada

• Arada reveals shift in buyers’ nationalities
• Percentage of Emirati buyers drops
• Indian buyers overtake UAE nationals

Overseas buyers in Arada’s two mega-developments in Sharjah have vastly outnumbered locals in the year-and-a-half since the emirate expanded full real estate ownership rights to non-GCC nationals.

From when Aljada, Sharjah’s biggest mixed-use project, launched in 2017 until the land reform of late October 2022, Emirati nationals bought more than 63 percent of the value of all properties sold in that timeframe.

Saudi Arabian and Indian nationals came a very distant second and third, with 6.5 percent and 4 percent of the pie respectively, according to data Arada shared with AGBI.

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Since November 2022, however, the share of overall property sales volume purchased by Emiratis dropped to almost 18 percent, while that of Indian buyers rose to nearly 16 percent. Egyptians came in third, more than doubling their slice from 2 percent to 5.3 percent.

Aljada sits on a 24 million square feet plot south of Sharjah International Airport and comprises about 25,000 residential units, primarily apartments. The company has sold about 10,000 to date, according to Arada.

“That [trend] is ramping up and we are seeing a diverse group of investors and residents that want to buy in our communities,” Amit Arora, Arada’s chief operating officer, said. 

“As a result, we’re having to also accelerate our efforts to cater to them.

“So putting on more events in these communities, food trucks, bringing in more F&B brands, opening up more locations to be closer to our guests, that’s exactly what we’re doing right now.” 

Earlier this month, Arora was appointed to lead the developer’s newly created hospitality and entertainment division, with the goal of increasing Arada’s “ancillary” revenues from events, food and beverage, cinemas, wellness and other initiatives, to nearly 20 percent of the total in five years. 

Arada’s figures from Masaar, the company’s nearly sold-out development of approximately 3,000 villas and townhouses amid 50,000 trees in eastern Sharjah, are even clearer.

From Masaar’s launch in January 2021 until the reform, UAE nationals bought 32 percent of properties sold by value and Indians 21.5 percent.

Following the reform, the Indian share grew to 34.5 percent, Pakistani nationals went from just over 2 percent to 8 percent to take second place, and Emiratis’ purchases dropped to below 7 percent.

The law that Sultan bin Muhammad bin Rashid Al Qasimi, ruler of Sharjah, signed at the end of October 2022 allows all nationalities to own property in Sharjah on a freehold basis. Prior to the change, only UAE and GCC nationals had that right and other foreigners were limited to certain properties for a maximum of 100 years.

The legal shift triggered a boom in the emirate’s real estate transactions and a jump in non-Arab investors of about 165 percent, local authorities said in January.

The Sharjah Real Estate Registration Department claimed at the time that real estate transactions hit a volume of AED27 billion in 2023, a 13 percent year-on-year increase and the highest level since 2017. Investing nationalities grew 21 percent from 2022 to a total of 103.  

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According to Shane Breen, Savills’ head of Sharjah and Northern Emirates, the local real estate sector has benefited from several factors in recent years: the “momentum” seen across the UAE, new higher-end developments and the freehold reform.

“Whilst affordability has historically been a key driver in the market, Sharjah is now witnessing an increase in real estate growth as more and more high quality developments launch, giving Sharjah residents access to comparable quality projects to Dubai but at a much cheaper price point,” Breen said.

Meanwhile, the 18-month-old real estate overhaul is enabling a more “vibrant secondary market”.

“These reforms have for now appeared to mostly boost off-plan sales,” Breen said.

“However, they will make it easier for investors to buy, sell and transfer properties in the future, improving overall market liquidity.”