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Ras Al Khaimah Property: An undiscovered Emirate with great prospects
While many people are familiar with the developments in Abu Dhabi and Dubai, Ras Al Khaimah has yet to enjoy this sort of global recognition.
However, the state is positioned for the fantastic growth experienced by its more eminent neighbours, according to David Scott, Management Consultant at The First Group.
Ras Al Khaimah Property: Conditions for success
The fourth-largest of the Emirates, it has huge natural resources, including the largest Ceramics company in the world, as well as beautiful scenery and miles of unspoilt beaches making it a draw for tourists and businesses alike.
"It's probably the least developed of the Emirates in real terms," Mr Scott said. He insisted that the state has "tremendous potential" for tourism because of its beautiful mountain range, stunning beaches and natural creek. In addition, the fact that it is the first deep water port after entering the Arabian Gulf from the Indian Ocean puts it in a very strong trading position.
Several new five-star hotels have sprung up or are in development, which will boost the local economy and property market, according to Mr Scott.
Five-star resorts such as the Banyan Tree and the Al Hamra Palace Hotel will open in early 2010 adding to the existing offerings of the Hilton Beach Resort and Spa and Cove Rotana Resort, which already enjoy maximum occupancy for most of the year. Together, these resorts will not only attract a constant stream of leisure and business tourists but will also employ thousands of staff.
"All this growth in tourism brings more people into the Emirate and that puts more pressure on Ras Al Khaimah property both for rental and purchase," Mr Scott commented.
On top of these factors, which are a good backdrop for economic success, the trade zones are also helping to boost Ras Al Khaimah's appeal to investors.
There are two investment authorities in the Emirate - the RAK Investment Authority and the RAK Free Trade Zone, which is by far the most popular.
"This basically is a whole swathe of different areas in Ras Al Khaimah," Mr Scott explained.
"There's central business areas right in the heart of the city and also warehouse and industrial areas on the outskirts of the city."
While most other Emirates require investors to have a local sponsor, which must own more than 50 per cent of companies, the Ras Al Khaimah Free Zones do not.
"This enables anyone who really wishes to, to set up a Free Trade Zone company which allows them to have 100 per cent ownership of their company as against the majority of the Emirates where you have to have a local partner," explained Mr Scott.
"These establishments allow 100 per cent repatriation of funds and there is no local taxation, all of which I'm certain make it very attractive to a large number of people."
"They have also set up facilities whereby you can set up offshore companies - a true offshore company centre - so [there are] an awful lot of attractive features for international business and trading enterprises, making it a magnet for overseas businesses " he continued.
Mr Scott added that this is also attracting investors from around the world, saying that these centres make it easy for businesses to set up in Ras Al Khaimah as there is less red tape than in some of the other Emirates.
RAK Free Trade Zone has representation throughout Europe, the Far East and the Middle East, with offices in Mumbai and representation in Singapore, Hong Kong and Germany.
"That gives you some idea that they're pretty strongly partnered throughout the world," Mr Scott commented. "That's bringing people and businesses in, for obvious reasons, which in turn makes it attractive for purchasing property in Ras Al Khaimah for investment purposes."
So what sort of potential does Ras Al Khaimah property have in terms of return on investment purchases?
"Generally considered, it should offer amongst the best investment return because the value for money is very strong, in other words prices are very affordable in comparison to the other Emirates," Mr Scott confirmed.
"Because it's developing, it's a little bit behind the other Emirates, it's learning its lessons from what Abu Dhabi and Dubai have done and therefore it's creating a very stable growth environment.
"You've got an area that has fantastic tourism, a tremendous pool for international trade and investment and of course that in turn will attract people to purchase property to fall into those sectors."
Ras Al Khaimah's gross domestic product has risen by 50 per cent in the last four years, which gives an indication of the rate of economic growth in the region.
"The prospects are fantastic - it's a different dynamic to the rest of the Emirates and one that we know will give great returns to everyone investing in the Emirate," Mr Scott concluded.