Kuwaiti developers seek to tap property boom in Dubai’s neighbour
TWO Kuwaiti developers have announced plans for a 3.5 billion dirham (S$1.3 billion) housing project in Sharjah – Dubai’s neighbour to the north – that’s seeing a boom in its property market.
IFA Hotels & Resorts and Kuwait Real Estate have partnered to develop 1,100 homes on 6 million square feet of land near Sharjah’s border with Dubai.
The Al Tay Hills project will feature townhouses, semi-attached villas and standalone villas ranging from 3 to 6 bedrooms. Homes will be sold for between 1.8 million dirhams to 7.3 million dirhams, executives said in an interview.
Sharjah is beginning to lure investors to its shores two years after passing a law that allowed foreigners to buy property in select areas of the conservative emirate. Already, developers are in the process of constructing tens of thousands of homes and buyers are flocking to the emirate where prices remain considerably lower than in Dubai which has seen values surge more than 50 per cent since 2020.
Located around 40 km from Downtown Dubai, the Al Tay Hills development will be centred around a man-made river. Amenities will include restaurants, cafes, retail outlets, swimming pools as well as walking and cycling tracks.
The initial phase, comprising of 375 homes, is expected to be completed in the first quarter of 2028. Buyers can pay 30 per cent of the value during construction and the remaining 70 per cent upon completion, when mortgages will be available.
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IFA Hotels & Resorts is the developer behind several mixed-use developments on Dubai’s man-made Palm Jumeirah island including the Golden Mile and the Fairmont Hotel and Residences. Kuwait Real Estate – one of the oldest developers in the Gulf region – owns an 8.26% stake in IFA, according to its website.
The partners have been biding their time to start the project.
“We bought the land over 15 years ago but the registration and licensing aspects in Sharjah were not yet conducive for developers,” IFA chairman Khaled Esbaitah said in an interview.
Sharjah has long offered more affordable housing compared to Dubai, but much of its supply consists of old towers with few of the facilities typically offered by its glitzy neighbour.
That’s starting to change. Arada Developments, owned by the son of Saudi Arabian Prince Alwaleed bin Talal and a member of Sharjah’s ruling family, is building a US$9.5 billion project. Others including Abu Dhabi’s Eagle Hills and Sharjah’s Alef Group are now developing projects in the city.
The Kuwaiti developers are no strangers to ups and downs of the United Arab Emirates’ property market. For years, IFA was locked in a legal dispute with Dubai’s state-owned Nakheel PJSC in the aftermath of the 2008 global credit crisis, which shaved more than 60 per cent off Dubai’s home prices.
“At that time, Nakheel went through a tough time and everyone associated with Nakheel went through the same tough time,” said Talal Al-Bahar, vice-chairman and chief executive officer of Kuwait Real Estate. “Fortunately and unfortunately, our eggs were in one basket and it was only on the Palm Jumeirah. It affected us, but we weathered that crisis.”
Al-Bahar said property demand in Dubai is very strong despite the cyclical nature of the real estate market. He said profit margins in Sharjah are “very attractive”, declining to be more specific.
“There is always a buyer in the low time and the high time in Dubai,” he said. “I’m a big believer in Dubai real estate and Sharjah is the closest to it.”
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