How successful has Al Zahia been in attracting investors' interest, and how does the project contribute to the overall growth of Sharjah's real estate sector?
Since its launch, Al Zahia has proven to be hugely successful with homebuyers and investors. With Phase I of Al Jouri 100% sold and fully occupied, Phase II of Al Jouri 100% sold and due for handover in 4Q2016, and Al Narjis handover planned for 4Q2017, we are on schedule to attain our sales targets and final handover date. As a barometer for the broader growth in Sharjah's property market, it has clearly shown that demand for high-quality residential property remains strong, especially in an exclusive, gated community.
Real estate is one of the brightest sectors of Sharjah's economy, suffering little from economic downturns, and has one of the highest investor confidence rates in the region. What makes the sector so attractive?
In recent times, Sharjah has benefitted from positioning itself as a regional capital for industrial-related commerce. It has witnessed steady growth in both its urban and economic infrastructure, in spite of economic pressures and volatile cycles experienced since 2008. Sharjah also has the highest number of SMEs—about 47,000—across all the Emirates. Therefore, the economic diversification in Sharjah is not over-reliant on any one industrial sector, but is easily adaptable to deal with changing economic cycles. In Sharjah, we see a clear demand for quality and that is why we are successful. The Emirate has a great deal of potential due to its unique culture, which attracts diverse groups of people. There are museums, parks, and the corniche offering a multitude of things you would not be able to find anywhere else.
Have you witnessed interest from foreign investors since the government opened up the property market, and how does opening the market to non-Arabs impact Sharjah's real estate market?
The current regulations only allow Emiratis and GCC nationals to purchase in Sharjah; however, we are currently in discussion with the local authorities to soften these regulations and open up the market to foreign buyers. There are already many non-Arabs living in Sharjah, and Al Zahia will be at the forefront because of its proximity to Dubai's airport and the University of Sharjah. In fact, we have a few European families already renting in Al Zahia.
When you have such thriving property markets, with big-ticket projects in place and a rising population, how challenging is it to keep inflationary pressure under control?
Sharjah is a large Emirate, and these projects are even bigger. If you have more projects it is easier to stabilize prices. With Sharjah experiencing a 3-5% growth rate, outstripping many countries' performance, the Emirate is still attractive, offering stable growth whilst at the same time not experiencing housing valuations or rental costs increasing beyond a manageable level. All in all, Sharjah, and the wider UAE, remains a safe haven for steady investment opportunities and this is projected to be the case for many years ahead.
What is your outlook on Sharjah's and the UAE's real estate and construction industry for the medium term?
After the 2008 global crisis and the recent recessionary pressures due to falling oil prices, it has been suggested that economic cycles would now be on a shorter time scale. Therefore, developers need to be aware of the new six to seven year cycles and plan accordingly. While the economic situation has seen some recessionary pressures in the last few years, the demand for real estate projects in the form of mixed-use and residential developments remains high. From Sharjah Holding's perspective and the good relationships established between the Sharjah government and Majid Al Futtaim, it is likely that other major development opportunities will be pursued in Sharjah. Our objective is to make Al Zahia the prototype of the mid-size master plan community and this is why we are now working very hard on the landscape and the public area.