Dubai: Build a residential high-rise, lease out the units and then sell the property. Sharjah’s developers are finding there is a lot of investor interest for such deals and a profitable exit for them.
“The deals could range anywhere between Dh30 million to Dh120 million, and if the units are leased, that’s a major factor in deciding the final price,” said Suzanne Eveleigh, Director — Property Management at Cluttons. “Completed buildings in locations such as Majaz and Buhaira Corniche are of particular interest.”
Sharjah has seen a sharp increase in the number of residential high-rises that are complete and with significant occupancy rates. Another plus from an investor’s perspective is that apartment rentals in Sharjah were on the rise for the better part of the last two years. And even when rental growth in Dubai seemed to slow down, nothing of the sort was witnessed in Sharjah, according to market sources. It was only in the fourth quarter of 2015 that the pace of increase wound down a bit.
“Sharjah has had a consistent and committed level of buyer interest for plots,” said Eveleigh. “Land continues to sell well and the impression is that the pricing is right.”
Completed or near-completion high-rise buildings, whether in Sharjah or Dubai, remain prized assets for investors. According to market sources, such deals continue to be made despite the market slowdown, with GCC investors always looking for a good deal.
Meanwhile, Sharjah’s city-within-a-city is taking shape. With 70 per cent of the infrastructure works complete, the first plots at the Dh2 billion plus Tilal City master-development should be handed over to investors by December. Available on freehold, these plots, located in two of the four zones making up the development, can be used for both residential and commercial low-rise structures.
But, given the fast-track progress achieved on the infrastructure side, there are chances that the handover process could be brought forward, according to a senior official with Cluttons, the property services firm handling the sales operation at Tilal City.
“Within Zone C, there are less than 100 plots left out of 663 assigned for villas, while in Zone A, 85 per cent of plots for mid-rise commercial buildings have been taken up,” said Eveleigh. “It’s up to the investors to decide on the design and construction schedules of their individual projects.”
Tilal City is one of a handful of mega projects anchoring Sharjah’s credentials as an freehold investment destination for all. The Majid Al Futtaim Group in a joint venture with the Sharjah Government is developing the 1 million square metre Al Zahia community, while the Waterfront City is another trying to rope in investor attention.
For the residential plots at Tilal City, the asking rates are Dh140 a square foot, and those for the commercial ones are between Dh180-Dh225 a square foot.
“The villas can be built up to 50 per cent of the plot size, which are around 4,000 square feet,” said Eveleigh. “And buyers can get their title deeds now by registering with the Sharjah Real Estate and Land Department.”
What the likes of Tilal City and Waterfront City have done is expand Sharjah’s freehold investor base beyond UAE and GCC nationals. According to market feedback, the buyer demographic for Tilal City is quite a varied one. And they seem to holding on to their investments given the limited transactional activity happening on Tilal City plots in the secondary market.
