Total investment in Ajman real estate has crossed the Dh400 billion mark.
"With the launch of the Dh220bn Al Zorah project, total investment has crossed Dh400bn in the past two years. We are working with Hyder Consulting to put together a new strategy for the emirate and conceptualise a new master-plan for the city," said Mohammed Ahmad bin Omair, assistant director-
general for engineering in Ajman Municipality and Planning Department.
The emirate has recently seen the launch of waterfront ventures, high-end commercial projects and budget residential houses.
"Ajman aims to penetrate different market segments," James Knowles, director for sales and leasing at Asteco Property Management, told Emirates Business.
For the property management firm, Ajman was one of the key property markets last year and contributed a significant amount to the overall business model of the company. The realty scene too has not been far behind in reaping the success story of Ajman.
"In the past one year, the value of projects in Ajman has increased between 30 and 40 per cent. We are seeing capital values for upscale residential units in the region of Dh700-Dh800 per square foot," Knowles said.
Considering Ajman is yet to see completed projects, all prices stated are for off-plan properties.
The property price is expected to go up to the Dh1,000 per square foot mark – still a far cry from Dubai and Abu Dhabi rates.
"Prices have increased in line with the cost of construction and the continued demand for real estate in the city," Knowles said.
Amitabh Dhawan, chief executive of Aspire Real Estate, said: "One can source very competitive rates in Ajman as land is cheap.
"Cost of construction is less owing to low cost of labour in the emirate. And also, construction is still not technology oriented."
The Midas Executive Commercial Towers saw a sellout three weeks ago for Aspire, with selling prices averaging Dh600 a foot.
Land prices are said to have moved up to Dh76 per square foot from Dh68 a square foot in less than two months. Land prices have risen in Ajman by 15 to 20 per cent every year.
Amir Pardesi, vice-chairman of Mazyood Giga International, said: "There are still new projects coming up there, but when you compare it to Dubai there is still a big difference in terms of price. Ajman is the best place for investment for the middle class segment.
"Even the cost of construction and price of land is cheap for us. What one can buy in Dubai for Dh1,200 per square foot, you can get it for Dh400 in Ajman," he said.
What has been good for the Ajman market is the "self regulation" imposed by serious developers.
Dhawan said: "Dubai has been a good example for everybody. Today, as soon as developers announce a project, they lock in a construction company.
"They pay them the mobilisation costs and secure contracts at the time of the project launch itself. Moreover, they ensure a defined cash flow that ultimately works around the payment plan offered to the end user," said the CEO Aspire Real Estate.
When asked whether Ajman's infrastructure has kept pace, Dhawan said: "Initially there were some problems because the entire real estate process was new. But the government and the people involved have all been coming together in co-operative efforts to undo errors."
Knowles of Asteco said: "Infrastructure spending have been increasing considerably for Ajman."
In March, the President His Highness Sheikh Khalifa bin Zayed Al Nahyan, Ruler of Abu Dhabi, ordered the allocation of Dh16bn to develop infrastructure in the Northern Emirates. The move was aimed at accelerating economic progress and the construction boom witnessed by all the emirates.
Last month, Ajman Municipality and Planning Department Director Mohammed bin Omair announced the launch of infrastructure and real estate projects worth Dh200 million, which include planning of complete cities and road developments across the emirate.
Among these are Green City and Al Sundus City – both freehold – that will offer more than 3,000 villas for sale, while Ajman Uptown will comprise 600 residential and commercial units. The department will re-plan the Al Manama area and construct waste disposal and sewerage plants to accommodate growth.
Analysts believe the city will take a three years to consolidate the whole process. Dhawan said: "Power shortages have not been uncommon across the country. It would be wrong to say these issues concern just Ajman.
"It is a phenomenon very national and international at the same time," he said.
"So far new developments in Ajman have been on Emirates Road which are very well connected to Dubai and Sharjah. The Pan Emirates Road coming up close to the Emirates Road is said to be bigger and may act as a by-pass for Sharjah. There is better connectivity of all the emirates to each other. There are challenges today, but that is a trend we see in maturing markets," said Dhawan.
Ajman rentals have increased by 64 per cent in the past 12 months, with the highest increases seen in studios at 89 per cent and one-bedroom units at 76 per cent. The Corniche area commands the highest rents – Dh30,500 for studios and Dh42,500 for one-bedroom units. Rents in Al Naimia, Sheikh Khalifa Road and Al Quds areas have also increased.
Al Zorah Development Company, a joint venture between Solidere International in conjunction with the Ajman Government has launched an ambitious initiative costing Dh220 billion to transform Ajman's northern coastal strip.
The nucleus of the project will be the mangroves and the beach. There will be efforts to build the project sustainably. The developers are working towards energy consumption and beach protection. The canal system will enhance the mangrove life by flushing it regularly and no tall building will be built next to the mangrove. About 55 per cent space will be landscaped.
The first phase will be completed in the next two years, while the entire project will be completed in five to seven years.
Emirates City, a Dh15bn project, will entail around 72 state-of-the-art residential and commercial properties and is expected to encompass lakes and green parks, a shopping district, mosques, five-star hotels, educational and medical facilities.
Phase one of the city will have more than twenty-five towers breaking ground.
The downtown area, to be built at a later phase, will contain a shopping mall, featuring all branded retail outlets, along with a five-star hotel.