Dubai’s AARK Developers bets big on UAE’s real estate growth
Dubai’s AARK Developers bets big on UAE’s real estate growth
Staff Writer, Zawya Projects
Dubai-based AARK Developers is exploring opportunities for strategic land acquisition and development across the UAE, with plans to venture into the office and hotel segments, Chairman Rahul Kumar Gupta told Zawya Projects.
“We have land banks in areas like Arjan, Dubailand and Jumeirah Village Circle,” he said, highlighting the company’s focus on sustainable growth and expansion to meet evolving market demand.
The developer will appoint the enabling works contractor for the 4 billion UAE dirhams ($1.09 billion) SORA Beach Residences on Al Marjan Island in Ras Al Khaimah by the end of July 2024.
Gupta remains “very optimistic” about the Ras Al Khaimah real estate market, describing it as “a top destination for lifestyle and investments.”
“We anticipate continued growth, driven by factors such as economic diversification, government initiatives, and increasing investor confidence,” he stated.
Interview excerpts
What market factors compelled you to launch the AED4 billion SORA Beach Residences on Al Marjan Island in Ras Al Khaimah?
Several key market factors influenced our decision to launch on Al Marjan Island in Ras Al Khaimah. Firstly, Ras Al Khaimah’s growing reputation as a prime real estate destination played a significant role. The emirate has been experiencing steady economic growth, attracting both investors and tourists alike. Al Marjan Island, in particular, has emerged as a sought-after location for luxury living and leisure, thanks to its stunning beaches and strategic location.
Moreover, there was a noticeable demand for high-quality, luxury residential properties in the region. With SORA Beach Residences, we aimed to cater to this demand by offering a unique blend of contemporary design, premium amenities, and breathtaking views, all within a vibrant community setting.
Furthermore, the favorable investment climate in Ras Al Khaimah, including various incentives and initiatives by the government to promote economic development, provided a conducive environment for launching such a prestigious project. Overall, the combination of Ras Al Khaimah’s growing real estate market, the demand for luxury living experiences, and the favorable investment climate were the primary market factors that compelled us to launch SORA Beach Residences.
When did you acquire the land for the project?
We acquired the land for the project in July 2023. Our decision to invest in this prime location was based on thorough market research and strategic planning, aiming to capitalise on the island’s growing prominence as a premier destination for luxury real estate development.
Are you now seeing an increase in land price in the master development? Do you have more land bank there?
We continually monitor market trends and opportunities in the master development of Al Marjan Island. While we can’t disclose specific details about our current land holdings or future plans, we can confirm that we are committed to the long-term growth and development of the region. Al Marjan Island has indeed experienced an upward trajectory in land prices, reflecting its growing popularity and attractiveness among investors and developers. As a result, we are strategically positioned to leverage our existing land bank and explore potential opportunities that align with our vision and commitment to delivering exceptional real estate projects.
What are the biggest challenges you see in the coming years?
We do not foresee any economic or recessionary pressures in the coming years. The UAE government’s Industrial Strategy 2030, which includes substantial investments in infrastructure, tourism, and technology, is set to further enhance the real estate market. Additionally, the Dubai government’s ambition to establish the $35 billion Al Maktoum International Airport as the largest global airport will create new opportunities, bolstering Dubai’s position as a global hub. Furthermore, Dubai’s Vision 2040 and the Dubai Economic Agenda (D33) underline the city’s commitment to sustainable growth and economic diversification. Such initiatives, as well as the introduction of long-term visas and incentives for foreign investors, will play a crucial role in strengthening the UAE’s real estate sector, ensuring sustained growth and prosperity.
Are you seeing an increase in construction costs in the UAE?
We have observed an increase in construction costs in the UAE, which is influenced by a range of factors, including rising material prices, labour costs, and regulatory requirements. The UAE’s construction sector is dynamic and responsive to global market trends, with demand for skilled labour and quality materials often driving up costs. Moreover, factors such as changes in regulations, currency fluctuations, and geopolitical events can also impact construction costs.
Who is the project’s architect? What is your project’s USP in terms of design?
The property’s unique architectural design has been conceptualised by Japanese architectural firm Nikken Sekkei. The timeless interiors of SORA Beach Residences will be done by Shalini Misra Design, which has a presence in London, New York, Delhi and Dubai.
The new property will be the first of its kind on Al Marjan Island, standing tall with 18 floors of unobstructed sea views from every residence. With a built-up area of 1.8 million square feet, residents will enjoy exclusive access to over 50 world-class amenities, including a private beach club, five-star dining options, a sky bar with infinity pool and even a private ferry shuttle service for convenient transportation around the island. In addition, this groundbreaking project boasts the largest beachfront on Al Marjan Island, offering private beach access spanning 1,000 feet.
The 140-foot-high atrium in SORA Beach Residences is expected to be the highest residential atrium lobby in GCC and serves as a breathtaking focal point with a panoramic view of the sea right from the entrance, commanding attention and awe from residents and visitors alike. Its striking height and architectural elegance create a sense of grandeur and spaciousness within the development, offering a captivating visual experience as one enters the building.
The atrium arch not only adds to the aesthetic appeal of the interior space but also serves practical functions, such as enhancing natural light penetration and providing a sense of openness and connectivity between different levels of the building. Its towering presence contributes to the overall ambiance of luxury and sophistication, making it a standout feature of the project and a symbol of architectural excellence and innovation.
What will be the sustainable elements of the project?
SORA Beach Residences is dedicated to sustainability through various eco-conscious elements. The project prioritises energy efficiency through passive design strategies, renewable energy systems such as EV charging stations, and water conservation measures, underscoring our commitment to reducing carbon emissions and promoting sustainable solutions. Open spaces, beach fronts, green spaces and landscaping are expected to enhance air quality. In terms of materials, we explore recycled and reclaimed options, low-impact materials, and pursue certifications regulated by the government.
How much landbank do you own in Dubai/UAE?
We have landbanks in areas like Arjan, Dubailand and Jumeirah Village Circle. We continuously evaluate opportunities for strategic land acquisition and development across the UAE, aligning with our vision for sustainable growth and expansion. Our focus remains on identifying prime locations like we did with Al Marjan Island – that offer potential for innovative and impactful real estate projects, catering to evolving market demand and enhancing the overall built environment.
Are there plans to enter other emirates and markets in the Middle East?
In addition to the SORA Beach Residence project, we have recently completed and delivered Gardenia Living in Arjan. We will also be delivering Aark Residences in DubaiLand in the fourth quarter of 2024. We also intend to add more luxurious projects to our portfolio, such as Aark Terraces that will be revealed in the third quarter.
As firm believers in the immense potential of the UAE’s real estate market, we are constantly seeking opportunities to expand our portfolio across the nation. Our landbanks represent the initial steps in our ambition to build a lasting real estate legacy.
How do you plan to fund SORA Beach Residences?
We plan to fund SORA Beach Residences through a combination of internal resources, strategic partnerships, and leveraging favourable market conditions. By utilising our existing capital, we ensure a solid financial foundation. Additionally, forming strategic alliances with reputable financial institutions and investors will provide us with the necessary support and flexibility. Leveraging low interest rates and high investor confidence in the UAE real estate sector, further strengthens our funding strategy. This comprehensive approach ensures the project’s financial robustness and aligns with our commitment to delivering high-quality, sustainable developments.
Could you share your business plan for 2024 and 2025?
In line with market demand and emerging trends, we may explore opportunities to launch projects in the office and hotel segments, leveraging our expertise in real estate development and management to create distinctive and high-quality properties that meet the evolving needs of our customers and the market.
The construction industry faces headwinds regarding rising interest rates and persisting supply chain challenges concerning construction materials. What steps have you taken to overcome these obstacles?
We address challenges stemming from rising interest rates and supply chain disruptions in the construction industry through a multifaceted approach. This includes proactive financial management to stabilise borrowing costs amid interest rate fluctuations, optimising supply chain processes to mitigate material shortages and delays, employing value engineering to optimise project costs without compromising quality, fostering collaborative partnerships to collectively manage risks, and embracing innovation and technology-driven solutions to enhance productivity and efficiency. These strategic measures enable us to navigate obstacles effectively, ensuring the successful delivery of projects while maintaining financial stability and operational resilience.
What is your outlook on the real estate market in the UAE, particularly RAK, over the next two years?
Very optimistic. RAK is a top destination for lifestyle and investments. We anticipate continued growth, driven by factors such as economic diversification, government initiatives, and increasing investor confidence. Ras Al Khaimah’s strategic positioning along the northern coast of the UAE makes it an attractive destination for both residential and commercial developments. The emirate’s natural beauty, with its stunning coastline and mountainous landscapes, continues to draw a growing number of tourists, bolstering demand for hospitality and residential projects.
Additionally, the upcoming launch of the MENA region’s first gaming resort in Ras Al Khaimah will make it an even more attractive destination for tourists and investors. The local government’s commitment to infrastructure development and economic diversification further enhances RAK’s appeal. Initiatives such as the development of free zones and investment in transportation networks are creating a favourable environment for businesses and investors.
What kind of return on investment can investors expect from SORA Beach Residences?
Investors eyeing SORA Beach Residences can anticipate a return on investment (ROI) similar to the meteoric rise witnessed with Dubai’s Palm Islands. Just as the Palm transformed Dubai’s coastal landscape and became synonymous with luxury living, our project promises to deliver exceptional ROI for investors.
Much like how properties on the Palm Islands saw exponential appreciation in value within a short span, our project offers investors the potential for significant capital appreciation over time. As Ras Al Khaimah’s real estate market matures and gains traction, investors can expect their properties in our project to appreciate in value, mirroring the success story witnessed in Dubai.
Furthermore, investors stand to benefit from attractive rental yields, capitalising on the burgeoning demand for premium beachfront living experiences on Al Marjan Island. With its strategic location, upscale amenities, and expanding tourism industry, our project presents a lucrative opportunity for investors seeking high returns in the Northern Emirates.
(Reporting by P Deol; Editing by Anoop Menon)
(anoop.menon@lseg.com)
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