Is Sharjah a hidden gem for regional developers?
Abu Dhabi and Dubai may have traditionally garnered the lion’s share of attention when it comes to UAE construction, but Sharjah is quietly gaining ground on both
A few weeks ago, I wrote a comment piece extolling the virtues of Kuwait’s construction sector (‘Masters of understatement’, CW 650). In short, my point was that while countries like the UAE, Saudi Arabia, and Qatar tend to attract the majority of headlines within the Gulf’s trade press, Kuwait is succeeding in strengthening its construction-related activities – but without the fanfare.
This week, I plan to shamelessly apply the same argument within a more specific geographical context: namely, the UAE. Since time immemorial, the UAE’s construction-related news has centred largely on the emirates of Abu Dhabi and Dubai, and with good reason. While the Northern Emirates have witnessed consistent levels of construction activity, the high-profile nature and sheer volume of projects in and around the country’s two largest cities have given them a propensity to hoard column inches.
But the times they are a-changin’. The post-2014 oil price decline has resulted in a thinning out of so-called iconic projects in the Middle East and, in the diversified, post-oil era that many economists are predicting for the region, realism is likely to take priority over optimism. Which brings us to Sharjah.
Sharjah stands in stark contrast to Abu Dhabi and Dubai. The emirate’s oil revenues are significantly lower than those of its neighbours, its hospitality sector is less mature, and skyscrapers are fewer and farther between. Nevertheless, with approximately 1.4 million inhabitants, Sharjah is the third most populous emirate in the UAE. It boasts a burgeoning industrial community, and has positioned itself as a viable and affordable spot on Dubai’s commuter belt. It’s encouraging to note, therefore, that Sharjah is investing heavily in its future. Take for example the emirate’s 2017 budget which, at $5.9bn (AED22bn), is its largest ever. Not only is this a 7% increase on 2016, but infrastructure will account for 30% of this year’s spending.
Indeed, since the beginning of 2017, Sharjah has committed to building eight power stations, approved the development of a $73.7m (AED271m) drainage network and water treatment plant for Kalba, constructed 72 artificial marine substrates in its eastern region, and awarded a $408m (AED1.5bn) project management contract for the expansion of Sharjah International Airport. The emirate’s decision-makers are pulling out all the stops.
So too is Arada, an ambitious newcomer to the region’s real estate market. The Sharjah-headquartered developer, which was established in January in the form of a partnership enterprise between Saudi Arabia’s KBW Investments and the UAE’s Basma Group, plans to complete its debut development, Nasma Residences, by mid-2019. The community will feature 800 residential units and a host of amenities, including a mall, an international school, a mosque, and health and leisure facilities.
In this issue’s face-to-face interview, Ahmed AlKhoshaibi, group chief executive officer of KBW Investments, outlines Arada’s aggressive development timeline for Nasma Residences, and its longer-term project plans in Sharjah and beyond (page 20). When asked why the developer selected Sharjah as its initial area of focus, AlKhoshaibi describes what he sees as an underrated emirate.
“Until they actually go and spend time there, people tend to underestimate the value of Sharjah,” he explains. “Arada employs several executives from Western countries, and I initially placed them in Dubai thinking it was the natural choice. However, once they had visited Sharjah, they started to ask if they could move [there]. Sharjah is family-oriented, comfortable, and [culturally rich]. It’s a gem; a hidden gem.”
It’s unlikely that Sharjah will outgrow Abu Dhabi or Dubai anytime soon, but don’t underestimate the extent to which a sense of community can encourage development. As the emirate invests in its infrastructure, greater numbers of developers will take notice, and more people will consider relocating.
Sharjah has all of the fundamentals necessary for sustained growth and, if it continues on its current trajectory, it’s a gem that will not stay hidden for long.