RAK investment destination for H2 2024

Ras Al Khaimah (RAK) is the most northerly state in the UAE. This emirate has become one of the fastest-growing economies in its category within this important economic region.

RAK is a great place to invest, especially in the real estate sector as it has favorable business policies and modern infrastructure complemented by a growing tourism industry.

Reason Behind the Popular Investment Destination 

The city of RAK is situated on the coastal plains. It has everything – whether you are into adventure, archaeology, or investment you have everything.

Thriving Economy

With a population of only 100,000 people RAK is the third-largest contributor to UAE’s GDP after Abu Dhabi and Dubai.

According to S&P, the emirate’s GDP growth is projected to average 2.7 percent annually from 2022 to 2025.

Thanks to the strategic insight of his leadership, RAK managed, over time, to successfully diversify away from an oil and gas economy. Today, key sectors driving growth in RAK include:

  • Tourism and hospitality
  • Trading and logistics
  • Real estate and construction
  • Manufacturing and processing

Diversification across sectors leads to economic stability and has the potential of attracting foreign investment.

Global Connectivity

It has excellent transport connectivity from RAK to UAE and other international locations. This enables businesses to easily penetrate local and international markets.

Critical connectivity Funds-coming-from infrastructure consists of:

  • Ras Al Khaimah International Airport: One million annual passengers
  • Port Area: 3 million tons of cargo-handling Radius
  • RAK Maritime City: 2.3 square km; Integrated maritime center
  • Etihad Rail: Links RAK to major industrial and population centres.

RAK provides high-speed digital connectivity through 5G and fibre optic networks by Etisalat and Du besides hard infrastructure.

Business-Friendly Environment

The RAK Economic Zone (RAKEZ) has become a popular business destination in the Middle East. RAKEZ, which spans over five zones and provides ownership at 100 per cent as well as repatriation & import-export facilities to investors worldwide.

More than 21,000 companies have selected RAK as their regional base in fields such as trading, manufacturing, technology and financial services emanating from over 100 countries.

New Tourism Hotspot

RAK has positioned itself as the UAEs outdoor adventure and ecotourism capital, thanks to its diverse natural landscape. It has the tallest mountain, highest peak, largest campsite to fastest zipline and countless other superlatives that appeal to thrill enthusiasts as well as nature lovers.

Last year, more than 1.5 million tourists visited RAK – up a quarter from the previous year RAK also has some USD 500 million worth of hotel projects in the pipeline, which will greatly contribute to improving tourism infrastructure.

Accelerating Real Estate Sector

Backed by strong economic and tourism prospects, RAK’s real estate market has caught investor attention as the next big opportunity. Let’s take a deeper look at growth drivers and investment hotspots:

Robust Tourism Creating Hospitality Demand

With tourist arrivals and hospitality supply expanding rapidly, RAK is an attractive market for investment in hotel residences – combining luxury accommodation with rental income potential.

Mid-range properties near key tourism zones offer handsome yields in the range of 7-8%. At the same time, branded residences associated with upcoming resorts provide premium capital gains.

For instance, units at the Wynn Residences being constructed along the hotel and casino complex are expected to appreciate 50-60% by completion based on current transactions.

Lower Prices, Higher Returns

Compared to mature Dubai and Abu Dhabi, RAK offers relatively affordable property with greater upside potential. Investors can target annual returns upwards of 10% even in a balanced scenario.

While Dubai apartment yields have moderated to 5-7% levels, RAK projects continue to offer 8-12% returns owing to supportive demand-supply dynamics.

Luxury waterfront apartments on Al Marjan Island , for instance, generate yields exceeding 7% – a premium of about 2 per cent points compared to equivalent Dubai assets.

Surging Land and Property Values

Backed by strong investment activity, land prices and apartment capital values in RAK’s prime areas have already risen 15-25% in the past year alone.

Areas like Al Marjan Island, Mina Al Arab and Al Hamra Village have witnessed the maximum increase as they attract strong end-user interest too.

With major projects in the pipeline, market experts forecast property prices to surge another 40-50% in the coming 2-3 years in preferred precincts. This creates a window of opportunity for investors to enter at still-reasonable valuations.

Top Investment Areas

Areas with the most potential benefit for someone looking to invest in real estate amid RAK’s booming property market are:

  • Al Marjan Island- It is the flagship luxury waterfront development of RAK spanning over four man-made islands. Provides luxury residential brands.
  • Mina Al Arab-Waterfront community with future hospitality and leisure facilities Mix of apartments and villas.
  • Yasmin Village – Freehold location just on the edge of RAK City. Comprising townhouses and villas in gated precincts
  • Al Nakheel — Well-connected master-planned community in RAK Offering a mix of apartments and villas.

New Projects Line Up

There is ample high-end real estate to be had in RAK. Developers provide investors with a balanced and attractive proposition.  Things changed, of course – thanks in part to improved economic conditions elsewhere that allowed for more financial flexibility – which is why they have a new red-hot draw:

Final Takeaway

RAK real estate supports solid positives with regards to infrastructure expansion, tourism potentials as well as end-user engagements and policy incentives.

Getting in early allows investors to capture meaningful price appreciation from current levels on an incremental basis while also positioning for 10-100x gains over the mid-term.

So, RAK real estate is definitely worth adding to a UAE-based investment portfolio with stable and high-yielding opportunities over the next 10 years.

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