The building in Muhaisnah 4 had suffered structural damage last week and has been sealed off as authorities conduct investigations
"It wasn't our intention to launch two massive master developments in the same year. Arada has a charter to focus on creating prime and quality communities. We had our eyes on Dubai, Sharjah, Saudi Arabia and other international markets such as Italy, London and Sydney. But, the UAE is our focus point. Sharjah is a hidden gem. There is a 10 per cent transactional gap between Sharjah and Dubai. We wanted to be the first mover to capitalise on Sharjah's untapped potential. No one has given it the merit it deserves," said Ahmed AlKhoshaibi, Arada's CEO.
Other components in Aljada include a business park spanning 500,000 sqm and projected to include 20,000 workers, four hotels (two 5-star and two 3-star), a hospital, four schools, a retail boulevard and linear parks running through the entire community.
"We are in talks with the government for a free zone. The business park will be launched in April 2018. We will retain a good chunk of assets in the community for recurring revenue," the CEO adds.
Arada is also planning an entertainment hub as a draw card to attract approximately 10,000 tourists to the community. "We aim to give you an entertainment experience of Dubai standards but at the cost of what you would pay in Sharjah," AlKhoshaibi added.
Although the developer planned to launch Aljada in 2018, the launch was preponed to 2017 after it witnessed robust sales for Nasma Residences. "There is a need for a well-designed, quality master-planned development that has amenities in Sharjah," he observed.
The untapped demand is reflected in how Arada managed to sell out 115 units in a single building in one day, a record for Sharjah.
Currently, end-users account for 30 per cent of sales in Aljada and investors make up the rest. "I expect that trend to change once we start construction. There will be a 50:50 split. End-users are waiting for us to hit the ground."
Arada is tendering for infrastructure and phase one construction. "We will award the job in February and likely start construction in March. We might do pre-mobilisation on site to save time," informed AlKhoshaibi.
A big chunk of investors is UAE locals, followed by those from the GCC (Kuwait, Saudi Arabia), Arabs (Tunisia, Algeria, Syria, Palestine, Lebanon) and Asians (Indian, Pakistan). "I believe the Arabs and Asians will eventually become the biggest buyers. UAE locals have a good eye for value; they know the price now is cheap and there is good potential for appreciation."
The average price per sqft at Aljada is Dh750, with studios priced from Dh299,000, one-beds from Dh545,000 and the cost going up to Dh3 million for a semi-detached four-bedroom villa.
Arada does not allow buyers to sell until they have paid 40 per cent of the property value. This limits speculation.
"We have had interest from potential bulk buyers. We do our due diligence before doing bulk deals. It's mostly from GCC investors who are eyeing capital appreciation and long-term revenue," said the CEO.
The developer has allocated Dh5 billion of equity to Aljada. It recently secured a syndicated loan of Dh1 billion from Abu Dhabi Commercial Bank and Dubai Islamic Bank to help finance the development of Aljada.
Unlike Dubai developers, Arada isn't offering overly aggressive payment plans. There are two payment plans in place for Aljada: 30:70 and 40:60. "We want to make sure that people who are buying are committed. We don't want to force people to buy something they can't afford."
On why property investors must choose Sharjah over Dubai, AlKhoshaibi said: "Investors must look at capital appreciation and yields. Sharjah's real estate market has a lot of growth potential. The government's initiative to allocate the biggest spend for infrastructure shows its commitment to the real estate market. Also, Sharjah retains its residents a lot more, with their average tenure being 20 to 30 years. The cost of living is also affordable in Sharjah. The emirate also offers net yields between eight to 10 per cent."
- deepthi@khaleejtimes.com
The building in Muhaisnah 4 had suffered structural damage last week and has been sealed off as authorities conduct investigations
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