For a time long Sharjah’s property market has been linked to Dubai’s, with rental and sales prices fluctuating in tune with the latter. With the recent changes in the property ownership laws that allow all UAE nationals to buy property through freehold and 100-year leasehold, Sharjah is now trying to make a lucrative market of its own for both local and foreign investors.
“In recent years, we have really seen the Sharjah sales market open up to foreign investors,” says Robin Teh, UAE country manager and director valuations and advisory at Chestertons Middle East and North Africa (Mena). “Demand for property in Sharjah has historically always been interlinked with Dubai, with residents reacting to the price increases and decreases in Dubai by moving into and out of Sharjah. More recently, we have seen the market in Sharjah becoming more diversified as it evolved from an affordable location to a location that offers mid to high-quality buildings.”
Sharjah has a long history as the manufacturing heart of the country, however, Faisal Durrani, head of research for Cluttons, says the opening of the real estate market to UAE residents two years ago was a watershed moment for the emirate.
“It threw open the floodgates to pent-up domestic demand from long-term residents eager to put down roots in Sharjah, or those who have been priced out of Dubai or Abu Dhabi, in addition to those looking to diversify their property portfolios,” says Durrani.
For now, he adds, the emergence of an investment property market is delivering a new style of residential asset to the market in the form of gated communities — a first for Sharjah. “These are available at a significant discount when compared to Dubai and given Sharjah’s focus on family living, it is appealing to an underserved segment of the population that would have otherwise considered options in Dubai,” adds Durrani.
With more expats investing in property and coming to stay in Sharjah, it is further creating demand for lifestyle-driven projects, including mixed-use developments, malls and family entertainment centres.
“New mixed-use and retail segments attract and can have a knock-on effect on the local economy, which in turn creates jobs,” says Teh. “As the number of people with higher levels of disposable income live and work in the emirate, more emphasis is placed on the housing market to provide the amenities and facilities to meet their lifestyle preferences.”
A number of developers, either on their own or through partnerships with the government, are launching big-ticket real estate projects in Sharjah. Sharjah-based Omran Properties announced Dh2.47 billion worth of projects that will bring new opportunities to invest in residential, retail, commercial and hospitality projects. Slated to be launched later this year, the largest of these is Maryam Island, a Dh2.26 billion mixed-use development located between Al Khan Lagoon and Al Mamzar peninsula. There is also a five-star hotel, Al Khan Village Resort, worth Dh120.6 million, and Kalba Waterfront Mall in the emirate’s Eastern region emirate at cost of Dh106 million.
“Sharjah is increasingly becoming an international focal point for business, hospitality, tourism and trade, and with the vital collaboration between government and the private sector, the emirate becomes an even more attractive proposition for domestic and foreign investors,” said Shaikha Bodour Bint Sultan Al Qasimi, chairperson of Shurooq and the board of directors of Omran Properties, in a statement. “These projects are a barometer of the confidence in Sharjah and an indication of its long-term success.”
The first major project to break ground was Tilal City, a Dh2.4 billion mixed-use development spread over 2.3 million m². Tilal City offers a unique opportunity to purchase or lease land and build property within the emirate. A flagship project of Tilal Properties, Tilal City is the largest planned real estate project in Sharjah and will house 65,000 residents. The developer is also building a 185,806 m² Tilal Mall expected to open in 2019.
“Developments such as Tilal City have had a positive impact on market conditions and have been well received by investors,” says Teh.
Undoubtedly, Sharjah’s economy is feeling the pinch from the wider slowdown across the UAE, but industry observers say the demand for a slice of Sharjah’s emerging freehold and leasehold market remains high and continues to exceed expectations.
“For Sharjah, these types of developments are a fairly new concept, but there has been an increasing demand for higher-quality projects and I am sure these types of developments are going to be very popular, cutting down the need to do the longer commute in particular,” says Suzanne Everleigh, head of Sharjah and director of property management in the UAE at Cluttons, adding that there are now more companies planning to move from Dubai to Sharjah.
Durrani says Sharjah continues to surprise with its higher-than-expected profile among the region’s wealthy investors, as demonstrated by its third-place ranking among GCC countries in Cluttons’ 2016 Middle East Private Capital Survey, behind Dubai and Abu Dhabi.
Other developers such as Sharjah Holding, a strategic partnership between the government of Sharjah and Majid Al Futtaim Properties, are also focusing on developing and managing retail and mixed-use projects such as Matajer, a neighbourhood shopping centre concept, and Al Zahia, a master-planned residential community.
“Sharjah is a market of emerging opportunities,” says Robert Welanetz, CEO of Majid Al Futtaim Properties. “With its prime position on the GCC investor’s radar, established trading and industrial hubs in addition to its vibrant culture and community values, the emirate is likely to continue to see a multitude of retail and residential developments to effectively manage an influx of expats, investors and business owners.”
Majid Al Futtaim has announced a Dh260 million expansion and redevelopment of Sharjah City Centre, including a 12-screen VOX cinema and a clinic. The company’s Al Zahia project offers 2,270 residential units across seven neighbourhoods, in addition to six themed parks, leisure facilities and a super-regional mall.
“We recently launched the Al Lilac neighbourhood as part of the Al Zahia community, which will offer 120 homes, including town houses, three-bedroom courtyard villas and larger four-and five-bedroom villas,” says Welanetz. “We are also working on a Dh53 million expansion for Matajer Al Juraina, to extend a new range of dining and retail experiences.”
Welanetz agrees that the law introduced in 2014 that allowed expats to acquire property in designated areas has attracted a larger and more diverse group of property owners to the emirate.
Sharjah’s retail sector is evolving, with consumers requiring variety and convenience. “These types of developments were lacking in the northern emirates where a significant portion of shopping is still done through street retail,” says Andrew Williamson, head of retail JLL Mena. “Developers are now looking to meet this demand through innovative and quality retail developments to prevent retail spend leakage to Dubai, along with providing quality community retail places for residents.”
Although there are new retail launches in Sharjah, Williamson says innovation is paramount. “Upcoming retail developments will need to effectively compete and differentiate themselves to capture demand,” he says. “Developers will need to ensure that supply meets the demand when undertaking any retail project.”