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Discuss this article (1 Comments)The new kid on the block
by ArabianBusiness.com staff writer on Saturday, 11 October 2008
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Imran Khan, CEO of Al Barakah, explains why the Ajman construction and real estate market is poised to take off as they are positioned to deliver lower prices than its surrounding neighbours.
Dubai is where the action is, so why Ajman?
Ajman is a very positive market and it is perfectly placed in the commuter belt for Dubai. It is ideal for people who want to live in Ajman and work in Dubai, especially for the middle class who are not able to afford property in Dubai because it has become expensive.
Ajman has definite opportunities for the real estate and construction sectors. It is the smallest emirate, so there is not a lot of available land. Whatever land is there has already been allocated. So now what we will see is a construction boom.
The cost of construction is lower in Ajman than in Dubai. Developers in Ajman expect less profits than they do in Dubai. So everyone across the board whether building suppliers, construction companies or developers themselves, is attuned to the fact. In Dubai, everyone wants to make more money.
Why is it cheaper to construct in Ajman?
The infrastructure for any company in Dubai costs more, whether it is rent or staff costs. So naturally if a company is registered in Ajman, the costs of running that company is lower, and that cost is passed on to the developer. So a developer can sell the same property in Ajman at a lower price.
The finished product in Dubai has to be of a much higher standard, because in Dubai we are catering to the upper segment of the market, so the expectation is of a better quality of product. In Ajman, because we are catering to the middle class, their expectation is also lower. So generally speaking, Ajman is half the price of Dubai, that's why developers are able to produce a cheaper product and therefore the middle class is able to afford it.
Why will Ajman be the next big thing?
In Sharjah, expats cannot buy property, so the next natural place for the construction boom to take place is in Ajman.
Ajman is in the same position as Dubai was a few years ago. Over the next few years, Ajman will build the infrastructure such as power and water to cope with the demand. I am confident in a few years, questions will be answered, because several high profile, very high value projects have been signed by the government of Ajman with various entities around the world to supply Ajman with the necessities and infrastructure that it needs.
Which are the projects in Ajman to watch out for?
On Emirates Road in Emirates City, there are a number of towers under construction which will begin getting delivered by the end of next year. Al Barakah has a 30-storey Crimson Court tower in Emirates City, which will be ready by the end of 2010.
Other projects are the Ajman Marina - some of which is being built on existing land and some on reclaimed land, and Al Zora, which is further down the same coastline, where they are reclaiming the mangrove areas of Ajman.
Marbooka City is also being built on Emirates Road where we have the tallest building in Ajman, the Burj Manara with 90 floors. It is part of our project called The Crest which consists of a shopping mall and four other towers in the same cluster. In terms of actual work on site, the master developer has finished ground levelling and enabling and will hand over the land to us this month so we can start working on it. The first apartments will begin to be handed over in the next four years.
What is the difference between the market in Dubai and Ajman?
The biggest challenge is in the perception of people. Dubai is very well-branded and marketed, Ajman being a new entrant has not been able to brand or position itself the way Dubai has. So the perception of the end user is not strong for Ajman.
The Ajman government has tried several times to address this situation. Ajman has a fair way to go, as everyone sees Ajman as a poorer neighbour, with less infrastructure, services and resources. But what they should understand is that for its size and where it is right now, it has the potential to grow.
It is an undervalued emirate, so in the next three to four years, as the grand scheme of things comes together, the value will be created. In terms of percentage growth, Ajman has grown faster than Dubai or Abu Dhabi.
Potentially for those of us who know Ajman as a market, we feel very confident about Ajman's construction market. Ajman is popular among the Pakistani, Indian and Iranian communities, so outside these three main communities, it gets really difficult to promote Ajman.
What does Ajman need to do to catch up with Dubai?
Ajman has got health and safety standards, but they are obviously now preparing themselves to have tall towers. Most of Ajman has low-rise buildings, but they are building taller ones, so they have to upgrade their health and safety and other construction regulation levels because of these tall buildings.
The point in Ajman's favour is that all of this is already done in Dubai, so they don't have to re-invent the wheel. Just by following the standards set by Dubai, Ajman can shorten its implementation. Whatever took Dubai two to three years to do, Ajman can do it quicker as the blueprint is already there. Ajman is working seriously to make sure they have all the right standards of construction and safety.
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