Dubai: Individuals can directly invest in student housing units for the first time in Sharjah, with the “Aljada” master-development near University City to have 10 buildings designated for that purpose.
These buildings — to be ready by late 2021 — are situated right next to campuses with around 26,000 students on their rolls.
The units are priced from Dh310,000, and available in studio and two- to eight-bed dormitory formats.
In all, there will be 1,288 room properties and 2,600 bed spaces at the “Nest”, which is what the 10-building cluster will be known as.
1288room properties at the Nest
2600bed spaces at the 10-building Nest
The launch comes at a time when student housing opportunities are rated as having some of the best returns in today’s real estate market. Developers and specialist funds in Dubai too starting to come on board, with the area around Academic City along the Dubai-Al Ain Road a prime target.
These investors are looking to the massive funds being set aside at the federal level and by individual emirates on their education and social housing needs.
With each new option being created to pursue higher education within the UAE itself, developers — and investors — believe this will feed demand for student housing as well.
As for the Sharjah venture, “Until now, property investors needed to pick up an entire building designated as student housing and not individual units,” said Ahmad Alkhoshaibi, CEO of Arada, the developer of Aljada, which will occupy a whopping 24 million square feet on completion.
“We are opening up that market to individuals to come in and pick up single units or more.”
Right next door to Aljada are American University of Sharjah and the University of Sharjah campuses. According to Arada’s pre-launch survey for the Nest, 80 per cent of those at AUS come from outside of the UAE, which means sustained demand for student housing.
We are quite certain the rental guarantee target can be met because there is a 20,000 plus strong captive market 10 minutes from where the Nest is. Our studies show that a buyer can get an average Dh1,900 leasing a single bed space on a monthly basis or Dh3,000 for a whole unit.
Arada is sweetening the deal further — buyers coming for the Nest are being offered 10 per cent annual rental guarantees over a five-year period post-handover, the first time a developer in Sharjah is offering one, according to Alkhoshaibi.
“We are quite certain the rental guarantee target can be met because there is a 20,000 plus strong captive market 10 minutes from where the Nest is,” the CEO said. “Our studies show that a buyer can get an average Dh1,900 leasing a single bed space on a monthly basis or Dh3,000 for a whole unit.
“Those rates are, in our opinion, sustainable when the Nest comes to market late 2021.”
As of now, the developer is offering rental guarantees only for the Nest and not for the other residential clusters within Aljada. “In a softening rental market, we need to be quite selective about where such can guarantees can be used.”
But even otherwise, there could be a lot going for student housing in the UAE. Unlike residential or office real estate, both prone to market ups and downs, student housing demand runs on more consistent lines.
Whether a property market is soft or not, there will always be a certain number of students passing through a campus each year. That translates into sustained demand for student designated housing, especially those near campuses.
“The returns for investors are better — definitely better than what you get in standard residential development these days,” said Kalpesh Kinariwala, Chairman of Pantheon, which plans to get into student housing development in Dubai in the near term.
Arada is casting the net wide for the Nest
The 26,000 student community at University City in Sharjah offers a big enough catchment area for student housing. But Arada is not limiting itself.
The Nest could also serve the “more than 60,000-strong student body in Dubai”, and being near enough to the Dubai International Academic City, which has 27,500 students enrolled at its universities this academic year.
The 10 buildings making up the Nest will be released one at a time.