The latest entrant to get on the freehold bandwagon is Umm Al Quwain (UAQ). Until recently, all developments in the emirate have been available for a 99-year leasehold title; however, the government of UAQ has recently declared the Royal Amwaj Resort as the first freehold project in the emirate, says John Parker of Fine and Country. "It is expected that other developments will follow the same trend and we foresee capital appreciation on the projects marketed by reputable developers in the area."
UAQ is strategically located between the Ras Al Khaimah and Sharjah free zones. "With the handover of projects such as Emaar's Umm Al Quwain Marina, we foresee an influx of tenants looking to get away from the busy streets of Dubai and also whose business is within commuting distance to the free zones and the airport," says John.
Investors should be aware that UAQ is a new market and its legal framework is still in its infancy. "Although there is fantastic potential for generating strong rental returns, there is nothing in the pipeline [like] Rera or some type of registration system. The regulatory framework is similar to Abu Dhabi or Ras Al Khaimah. I would recommend that when investing, prioritise the search for a reputable developer. Secondly, with the movement of changes of title in certain projects, if you are not comfortable with the 99-year leasehold option, then ensure that the development has a provision to do so."
Despite the drawbacks, John believes UAQ is a good choice because prices are relatively low. This, he says, "gives investors long-term ground for capital appreciation. As the government improves its legal framework and serious developers start to make a move to the market, people will feel more comfortable with purchasing a property in UAQ."
