• Sharjah looks set to capitalise from continued investment in its leisure and tourism sectors
• Dubai rental market proves to be competitive for Sharjah commuters
• Cluttons views high quality and well-designed residential properties are a step in the right direction.
• Sharjah malls are dated and retail units have suffered from lack of investment.
• Improvements in infrastructure have helped facilitate Sharjah’s industrial sector.
Cluttons, the real estate specialist that has enjoyed a dedicated Middle Eastern presence since 1976, today announces its market report for Sharjah hospitality, residential and industrial markets.
Hospitality
According to recent research by Shurooq, the Sharjah Investment and Development Authority, Sharjah has the second highest population growth rate in the UAE behind Dubai. The bulk of Sharjah’s population is within the 25 – 34 year old age bracket, which is a key consumer and labour demographic. In addition to its healthy resident population, Sharjah also receives approximately 1.5 million tourists annually, with a projected annual growth rate of 10 – 15%.
As the UAE benefits from its stable economic and political climate, Sharjah looks set to capitalise from continued investment in its leisure and tourism sectors. With new hotel groups targeting the Emirate and increasing levels of funds being invested in mixed-use developments across Sharjah, growth in the short term looks set to be driven by a healthy tourism sector.
Residential
Aggressive marketing campaigns from developers in Dubai have led to an exodus of Sharjah residents, who had previously been commuters, but now have the ability to lease affordable property in Dubai. According to the report this has had a considerable knock on effect with some areas in Sharjah suffering as much as a 50% drop in rental rates since the peaks of 2009/ 10.
Despite the gloomy forecasts of empty buildings and falling rents, Cluttons Sharjah branch has been bucking the trend in recent weeks with a massively successful offering of high quality residential flats in the Abu Shagara area. Recently launched, the Bahwan Tower Abu Shagara, consisting of 110 luxury 2 and 3 bedroom apartments, has achieved an occupancy level of 92% leased units within a 3-week period.
Cluttons indicates that there is still a strong residential market in Sharjah providing the product is well designed and built, has the right facilities, is in the right location and is being managed by a professional firm. However the report does show that the Sharjah villa rental market has seen less of a dramatic reduction, as Tenants of villas tend not to be so transient and reside in units longer, thus limiting the availability of stock in the market.
Industrial
Sharjah has shown strong growth in the number of Trade and Industrial licenses, cementing the fact that Sharjah is now seen as a strong industrial manufacturing hub. Improvements in existing infastructure have been a key component in the expansion of preferred areas. Cluttons notes that the eastern industrial areas are now a preferred location for both the investors and end users because of improved connectivity. The rental rates in the industrial areas have dropped by around 10% over the last six months.
Source: Cluttons Sharjah property market update, Q2 2011
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