RAK Properties aims to achieve more than Dh3 billion ($816 million) in property sales this year, up 50 per cent compared to 2023, amid the launch of new projects and higher demand from buyers, according to its chief executive.
The Abu Dhabi-listed company plans to launch four new projects this year following the launch of the Quattro Del Mar waterfront development in Ras Al Khaimah last week, with the first building of the project consisting 200 units having been sold out.
It is also targeting 20 per cent annual growth in revenue this year amid a bullish outlook for the property market in the emirate.
“We have growth plans for this year,” Sameh Al Muhtadi told The National in an interview. "In terms of revenue, we are targeting at least 20 per cent growth and now we are hoping that we will do much better than that."
The company has yet to announce its fourth quarter and full-year financial results but the “results are going to be very positive”, he said.
The company reported an 82 per cent annual jump in its third-quarter revenue to nearly Dh174 million, while its profit increased eight times to about Dh17 million.
“There is tremendous demand,” Mr Al Muhtadi said. "We are helped with the positioning of Ras Al Khaimah ... everybody sees the value, everybody sees the future of hospitality and services and the growth that RAK is witnessing. We expect that to continue.
“Judging from what we saw in our launch of Quattro Del Mar, we are very optimistic that the appetite is still there.”
The UAE property market continues to rebound strongly on the back of government initiatives and overall growth in the economy amid booming non-oil sector expansion.
Dubai as well as Abu Dhabi recorded strong property sales last year and market prices are expected to continue to rise this year.
RAK Properties, the developer behind the Dh10 billion Mina Al Arab master development off the coast of Ras Al Khaimah, also plans to launch a new hospitality project this year, which “will be a luxury beach resort with brand new residences along with that”, Mr Al Muhtadi said.
The company has "no issues whatsoever in financing new projects", he said.
"Our leverage ratio is extremely low compared to others in the industry, we have our own facilities and the off-plan sales obviously help, especially when we progress projects at the speed that we are."
The company is also going through the "exercise of industry rating in preparation for potential bonds if we need to, but with interest rates, the way they are now, it's not the best approach in funding", Mr Al Muhtadi added.
"We expect interest rates to begin to reduce in the third quarter of 2024. We will be depending mostly on our own funding of projects and off-plan sales."
The developer sold more than 2,000 units last year to buyers from 42 countries, including Russia, the CIS (Commonwealth of Independent States) countries, China, Germany and the UK.
UAE citizens, however, comprised the largest proportion of buyers of its properties, followed by Russians and Germans, according to Mr Al Muhtadi.
“We expect the demand to continue, based on two factors … yield on investments and value growth in the property prices. We are seeing a good 7 per cent to 8 per cent yield on investments from the rental and there's very good value to be had in investments."
Other developers are also boosting their investments in Ras Al Khaimah as the emirate continues to attract tourists and property buyers.
In 2022, Aldar Properties, Abu Dhabi’s biggest developer, acquired a beachfront plot to build its first residential community in the emirate as it continues to expand into other markets.
It also bought two hotels as well as a shopping mall in the emirate.
UAE property company The Luxe Developers also launched a Dh1.5 billion waterfront residential complex in Ras Al Khaimah amid a boom in the Emirates' property sector.
The 18-storey building on Al Marjan Island comprises 206 units of one, two, three and four-bedroom apartments, as well as six penthouses and two exclusive sky villas, the company said in July.
Dubai-listed Dubai Investments is also building a Dh1 billion residential development in Ras Al Khaimah.
“We expect continued growth and we expect continued interest from international investors,” Mr Al Muhtadi said. "I think the Wynn Resorts is a catalyst for a lot of this, with the number of rooms they will have, number of employees and number of visitors."
Wynn Resorts, which is being developed by the Las Vegas-based hotel operator, is set to open in 2026. The 1,000-room property, with entertainment and gaming amenities, is expected to boost the tourism potential of the emirate and create thousands of new jobs.
Ras Al Khaimah recorded its best tourism year yet in 2023, with 1.22 million tourists, up 8 per cent on 2022 and recording a 24 per cent annual growth in international visitors, according to Ras Al Khaimah Tourism Development Authority's latest data.
Essentials
The flights
Whether you trek after mountain gorillas in Rwanda, Uganda or the Congo, the most convenient international airport is in Rwanda’s capital city, Kigali. There are direct flights from Dubai a couple of days a week with RwandAir. Otherwise, an indirect route is available via Nairobi with Kenya Airways. Flydubai flies to Kinshasa in the Democratic Republic of Congo, via Entebbe in Uganda. Expect to pay from US$350 (Dh1,286) return, including taxes.
The tours
Superb ape-watching tours that take in all three gorilla countries mentioned above are run by Natural World Safaris. In September, the company will be operating a unique Ugandan ape safari guided by well-known primatologist Ben Garrod.
In the Democratic Republic of Congo, local operator Kivu Travel can organise pretty much any kind of safari throughout the Virunga National Park and elsewhere in eastern Congo.
ONCE UPON A TIME IN GAZA
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
Directors: Tarzan and Arab Nasser
Rating: 4.5/5
Terror attacks in Paris, November 13, 2015
- At 9.16pm, three suicide attackers killed one person outside the Atade de France during a foootball match between France and Germany
- At 9.25pm, three attackers opened fire on restaurants and cafes over 20 minutes, killing 39 people
- Shortly after 9.40pm, three other attackers launched a three-hour raid on the Bataclan, in which 1,500 people had gathered to watch a rock concert. In total, 90 people were killed
- Salah Abdeslam, the only survivor of the terrorists, did not directly participate in the attacks, thought to be due to a technical glitch in his suicide vest
- He fled to Belgium and was involved in attacks on Brussels in March 2016. He is serving a life sentence in France
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
MATCH INFO
Inter Milan 2 (Vecino 65', Barella 83')
Verona 1 (Verre 19' pen)
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%3Cp%3EDavid%20White%20might%20be%20new%20to%20the%20country%2C%20but%20he%20has%20clearly%20already%20built%20up%20an%20affinity%20with%20the%20place.%3Cbr%3E%3Cbr%3EAfter%20the%20UAE%20shocked%20Pakistan%20in%20the%20semi-final%20of%20the%20Under%2019%20Asia%20Cup%20last%20month%2C%20White%20was%20hugged%20on%20the%20field%20by%20Aayan%20Khan%2C%20the%20team%E2%80%99s%20captain.%3Cbr%3E%3Cbr%3EWhite%20suggests%20that%20was%20more%20a%20sign%20of%20Aayan%E2%80%99s%20amiability%20than%20anything%20else.%20But%20he%20believes%20the%20young%20all-rounder%2C%20who%20was%20part%20of%20the%20winning%20Gulf%20Giants%20team%20last%20year%2C%20is%20just%20the%20sort%20of%20player%20the%20country%20should%20be%20seeking%20to%20produce%20via%20the%20ILT20.%3Cbr%3E%3Cbr%3E%E2%80%9CHe%20is%20a%20delightful%20young%20man%2C%E2%80%9D%20White%20said.%20%E2%80%9CHe%20played%20in%20the%20competition%20last%20year%20at%2017%2C%20and%20look%20at%20his%20development%20from%20there%20till%20now%2C%20and%20where%20he%20is%20representing%20the%20UAE.%3Cbr%3E%3Cbr%3E%E2%80%9CHe%20was%20influential%20in%20the%20U19%20team%20which%20beat%20Pakistan.%20He%20is%20the%20perfect%20example%20of%20what%20we%20are%20all%20trying%20to%20achieve%20here.%3Cbr%3E%3Cbr%3E%E2%80%9CIt%20is%20about%20the%20development%20of%20players%20who%20are%20going%20to%20represent%20the%20UAE%20and%20go%20on%20to%20help%20make%20UAE%20a%20force%20in%20world%20cricket.%E2%80%9D%C2%A0%3C%2Fp%3E%0A
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
