How would you describe Al Marjan Island's unique investment environment?
At the moment there is a diverse portfolio of hotels, hospitality, and leisure assets in Al Marjan. We have ambitious growth figures, one of those being 8,000 total keys for the full Al Marjan. So far we have around 1,500 operational hotel rooms between three hotels; Hilton Double Tree, Rixos Bab Al Nahr, and Al Marjan Island Resort and Spa, which is managed by Accor. That figure, by itself, is already very impressive considering that we have been operational for only two years. An example of investor confidence is the Hilton Double Tree. Only one year after its opening in January 2014, it decided to open another piece of land to develop an additional 240 hotel keys in order to reach 700, meaning a 44 % increase in just one year. No international brand will undergo this expansion unless it is sure about the destination in which it is investing. International brands believe that they have to be early birds in the Al Marjan development before someone else catches it.
What is the length of time before investors will see a return on investment?
The payback is within five years. That, in itself, is one of the competitive advantages of Al Marjan Island. We are doing our own studies by Colliers, Mackenzie, and CBRE to ensure that what we are doing is completely right. At the moment we are achieving a good result compared to Palm Jumeirah and Saadiyat Island. Colliers International concluded that a similar RoI in the Emirate of Ras Al Khaimah can be achieved despite it being an emerging destination. Whatever you can achieve in Dubai you can achieve it similarly and with less investment. When compared to the other two islands, although our occupancy is the lowest, we are achieving a similar RoI to Palm Jumeirah, even though construction costs are significantly higher in Palm Jumeirah. However, we do not believe that we are competing with these other islands as we are creating a unique brand in Ras Al Khaimah. We are adding our own unique advantage, which is a value proposition of Ras Al Khaimah as an authentic Arab gateway to the region, where we are investing in our own culture, mountains, desert, and landscape. Al Marjan is designed in a coral shape that allows each plot to have its own different sea view. In this way, each plot is either looking toward the west, the east, the city, or the Gulf. Therefore, the design of Al Marjan Island gives a lot of opportunities to investors. You have to offer something unique, otherwise you will be seen as an imitation development.
How are you attracting foreign investment to Al Marjan Island?
We have our own simple and clear strategy for attracting investors. We are transparent in everything we do and say in order to enable investors to make sound decisions. We adopt this transparent strategy towards our potential investors so that they know exactly what the rate of return is. However, we also believe that we need to drive the market ourselves, and for this reason we also develop our own products. This way, we can also lead by example. We have a good business model that can make investors trust us; they can visit our products and they can feel confident about Ras Al Khaimah as a whole. The strategy is simple; we create value for the existing investors and they demonstrate this generated revenue value to other potential investors. We believe that the strategy we are working with is the best and we are focusing more on roadshows in China, Russia, and Europe, so we seek investors from those areas to enhance the existing ones. Currently, on Al Marjan Island, we have different types of investors. We have investors from the UAE, the GCC, India, Pakistan, the UK, and the Czech Republic, amongst others. We would like to enhance this mix and show them the long-term investment opportunities on Al Marjan Island.
How will Al Marjan Island complement the future of RAK's tourism industry?
In Ras Al Khaimah, we do not promote ourselves to an investor as a short-term cash flow generator; we promote ourselves as a long-term value creator. We invest in the full master plan of Ras Al Khaimah and not just on Al Marjan Island as a development, so that is why we are selling a business opportunity in the Emirate and not just Al Marjan Island. There is a strong direction from HH Sheikh Saud Bin Saqr Al Qasimi, member of the Supreme Council and Ruler of Ras Al Khaimah, to create Ras Al Khaimah as the leading destination for authentic culture, tradition, and adventure. Ras Al Khaimah aims to attract around 2.5 to 2.9 million visitors by 2025 and, in order to do so, it needs around 15,000 hotel keys to be developed and 8,000 of them have to be in Al Marjan Island.
What are your prospects for the year ahead?
There is a lot of potential to expand projects. A lot of eyes are focused on Al Marjan Island, not only from the UAE but from abroad, too. We noticed that there is demand from prestigious international hotel and hospitality brands in Al Marjan Island, and they are asking us to enhance the interaction with the international stakeholders and investors in order to create partnerships with them. This way they can both benefit whether it is as an international hotel brand or a foreign direct investor. There is potential for real estate although we are seeing some corrections to match the best price with both the investors and the end users.