It is difficult to see how Ras al-Khaimah can complete the raft of real estate development projects it had planned before the UAE property market collapsed in late 2008.
Many of the projects have been in the pipeline for a number of years, and with rents and housing prices continuing to fall throughout much of the UAE it remains to be seen whether there will be sufficient demand and finance for what was previously planned.
But Ras al-Khaimah believes it is up to the challenge. The emirate has pledged to press ahead with its real estate development plans in spite of the region’s property market downturn.
The local developer Khoie Properties recently signed a memorandum of agreement (MOA) with Dubai-based Arabtec Construction to build the AED2.5bn ($680m) La Hoya Bay Development on the $1bn Al-Marjan Island development.
This came shortly after the emirate announced to halt foreign investment plans and concentrate on stabilising the economy through investing in local projects.
“We are going to concentrate on investments within Ras al-Khaimah and seek to create better opportunities for our people and investors here,” said Sheikh Saud Bin Saqr al-Qasimi, crown prince and deputy ruler of Ras al-Khaimah.
The northern emirate believes that reducing investment in overseas projects will free up funds to progress with planned real estate projects and boost its tourism sector.
However, even if the emirate proceeds with the projects, it will likely be many years before they are completed. A prime example of this is the $400m Convention Centre that is planned for the Gateway City development on Emirates road. The project was first launched in 2006 but is still in the design stage with no definite timeline set out for the construction process.
Ras al-Khaimah’s decision to curtail foreign investment and concentrate on internal development is not an unexpected move in the current economic climate. However, it may be forced to set more realistic targets in regards to what this internal development involves.