Dubai: The hotel sector continues to prop up real estate activity in Ras Al Khaimah even as the residential space feels pressure from softening demand. And with home rents in adjoining Northern Emirates dipping, those in Ras Al Khaimah are taking the same direction.
Average rents in established clusters such as Al Hamra Village and Mina Al Arab were down 2 per cent during the second quarter, and taking the 12-month dip to 6 per cent, reports CBRE in its latest update. This means a studio in Al Hamra or Mina Al Arab could be rented for Dh22,000 to Dh30,000, and one-bedroom units from Dh35,000 to Dh50,000.
For developers, the coming quarters will see limited new supply and that could help stabilise the rate of decline on rentals. But the CBRE report states the residential sector “is set for further rental deflation in the coming quarters, driven by similar negative trends in Dubai and Sharjah markets”.
This year, there was the handover of Bermuda Villas at Mina Al Arab earlier in the year, while the deliveries continue at the Pacific project on Al Marjan Island. CBRE reckons that new deliveries will come on stream from 2019.
Overall capacity
But in the hotel sector, new supply is coming through thick and fast. Next year, 600 new rooms are likely to be added, and which would raise the emirate’s overall capacity to near about 6,500 rooms.
But from 2019 onwards, “room supply will start to increase at a much faster pace, driven by the anticipated handover of new large-scale resort properties in locations such as Al Marjan and Mina Al Arab,” the report adds.
Indeed, Al Marjan will be a key focal point for new mixed-use developments in the emirate. The Avant Al Marjan Island Ras Al Khaimah Resort project was launched during the second quarter, while other five-star properties are either underway or could start work soon.
