Resilient Ajman forges ahead with projects

While all eyes are on Dubai and Abu Dhabi as the two try to reconfigure their respective real estate space, there is considerable action taking place in Ajman where the authorities are going all out to turn things around in the prevailing adverse conditions. Much of the effort is to instill confidence in the market.

"Dubai introduced escrow accounts and Ajman followed suit. This helped a lot in terms of safeguarding projects from a financial point of view and also protecting investors from developers who may abuse their power," says Rami Dabbas, CEO of Aqaar Properties, one ofthe prominent players in Ajman'sreal estate space.

Spearheading the drive to put the market back on track, the Ajman Real Estate Regulatory Authority (Arra), the emirate's realty watchdog, recently organised a real estate workshop for Ajman's developers.

The regulatory body is now planning to publish a sales price index in a bid to bring in more transparency which, in turn, is expected to attract buyers and investors. Arra has also instructed developers to focus more on project completion and sales of units with minimum profits.

It is already exploring the option of allowing investors and buyers who have invested in developments that haven't taken off yet, to swap them with properties under construction in Ajman or developments in other emirates in the country.

As per this option, investors will not lose the money they invested as they will be given discounts equivalent to the amount they already paid the developer or they could also get an additional discount for choosing to move to a project under construction.

While the developer fraternity feels these initiatives will have long-term benefits, it remains to be seen how the investors will react to it in the near future. However, the fact that the construction sector is still abuzz with activity augurs well for the future of the emirate's realty sector. 

Learning curve

Some major developments announced before the crisis suffered setbacks resulting in the delay or cancellation of a few of them. But, Dabbas says while it's been a bumpy ride, there are a few positives the industry and investors could take from recession.

"The crisis has been a lesson for everybody. Investors will now have realistic expectations from the market. Developers themselves have learnt a lot from the crisis - how you should develop a project and with what principles you should develop a project. Now they are willing to address issues such as specifications, quality, the community feel, sustainability and so on, which is a good sign for the market as a whole," he says, adding that this is a transition period for the market.

Prior to the downturn, the real estate sector was a major contributor to the country's GDP, but now it is assuming the role of a support industry.

"Before the crisis, speculators were ruling the roost, but now most of them have already left the market and in their place, we have property investment funds, big and small investors and with this, we will see a bit of stability coming into the market," says Dabbas.

He expects the market to witness more hiccups in the coming couple of years before beginning to stabilise and register positive growth.

"The key here is about knowing that there is a storm, being patient to get through the storm and be prepared for the outcome whatever that may be. The UAE will, over the coming few years, go towards becoming a mature market. During this period, it will continue to be a younger market with faster and healthier returns, but obviously not the way it was before 2008 when you could buy a property today and sell it tomorrow for 100 per cent profit. Those days are over and they shouldn't have existed; that's what we have all learnt from the crisis," says Dabbas. 

Ajman One

Aqaar Properties, which was founded in 2006 in association with the Ajman Development and Investment Authority, launched its ambitious project Ajman One the very next year. While the project flew into turbulence soon after it took off, the developers chose to go ahead with it, albeit at a slower pace. The development comprising residential, commercial and hospitality elements is located on the Sharjah-Ajman border.

"Despite the crisis, the construction of Ajman One progressed in 2008 and 2009. It hasn't been easy and we had to work really hard. One of the reasons why we managed to do this is because by the end of 2007, we sold almost 80 per cent of the project thanks to good marketing techniques, financial availability and good payment plans. Also the prices were very reasonable," says Dabbas.

In 2007, units at Ajman One were available for Dh400 per square foot which later went up to Dh600 per square foot. "As far as prices are concerned, officially we are sticking to our 2008-09 prices which start at Dh600 per square foot with a three-year payment plan. As per this plan, clients pay 10 per cent every four months. On completion, they pay 30 per cent while the remaining amount has to be paid in instalments of 10 per cent each. You get a period of 36 months to complete the payment," explains Dabbas.

Ajman One's first phase consists of 12 towers featuring about 3,500 apartments and some retail and public areas. The development features apartments of all sizes including studios, one-, two- and three-bedroom apartments. Phase two comprises three business towers, a hotel and an exhibition centre.

The construction of the residential project is in full swing, says Dabbas. "About 70 per cent of this phase is complete now. We have faced some challenges and are trying to tackle these challenges. The best part is that the construction was not stopped at all. We had to face every single problem you could imagine during the tough times, but we decided to go ahead with the project," he says.

Aqaar originally planned to complete both the phases together but the crisis forced it to revise its strategies. "Phase two was meant to start little bit after phase one but in the current market situation, it's just not possible. Work has started on phase two and we have already started the shoring and piling. There is no point in rushing ahead with it as fast as we wanted to.It's about trying to gauge the market and see where the people are in terms of their interest in such projects and taking it from there. Phase one is expected to complete by the second or third quarter of 2011."

The developer is planning to hand over this project in phases over a period of six to seven months from the first tower to the last tower. "We still have units available. We didn't want to flood the market with units, so we launched two towers at a time. We have sold about ten towers and among them units are still available. We still have two more towers to be sold which we will launch only at the appropriate time," says Dabbas. 

Almeria Bay

Aqaar's Almeria Bay development is a waterfront project consisting of a mix of residential towers, luxury townhouses, five star boutique hotels, food and beverage areas, beach and a marina.

The development is divided into different precincts; icon, marina, lifestyle and hotel. The icon precinct features the highest tower in the development - a 35-storey residential tower sitting on top of a four-storey podium. The tower is surrounded by two residential towers with 20 storeys each.

"This precinct like most other precincts is surrounded by luxury villas. The top level of the podiums consists of private gardens, recreational areas and pools for its residents," says Dabbas.

Located right by the sea, facing the private yacht marina, the marina precinct comprises two ten-storey residential towers located on a four-storey podium. Surrounded by luxury villas from three sides and split by a traditional Middle Eastern style souk which caters for the retail and commercial needs of its residents and visitors, this precinct also has part of the food and beverages units which will have views of the marina.

The lifestyle precinct features two 15-storey residential towers, private luxury villas and low rise apartments. It is split into two parts and is united by a water feature in the middle. Designed to be a private self-contained area, the hotel precinct houses a signature hotel with its own spa and gym facilities which will be shared by residents.

"The hotel will be in the style of distinct courtyards which are made up of hotel rooms and secluded private hotel villas, while also having a separate pool for hotel residents and an infinity pool for special residents at the end of the breakwater," explains Dabbas, adding, "All residential towers have been designed and positioned in such a way as to allow all properties within the towers unspoiled views of the gulf. It will also contain a private beach for all its residents which further separates this from any other project in the area."

Almeria Bay's design lays emphasis on a strong andefficient ESD (ecologically sustainable development) package, which makes it a very environmentally friendly housing estate, says Dabbas.

"In this project, we tried to integrate the Middle Eastern architecture and building techniques with new green technologies because the Middle East already has an experienceof dealing with heat. We havetried to use all the elements that help the environment but we made sure there is no compromise on luxury at all."

The project that was conceptualised in 2008 has already gone through a couple of design modifications and the developer is looking at various options to see how it needs to be adapted to the new market dynamics before starting the project.