Ras Al Khaimah (RAK): a major player in the UAE’s construction boom

UAE & RAK construction market: what’s happening?

The private sector in the UAE is contributing hugely to this growth, with the private residential segment up nearly 60% and private non-residential developments up by almost 40%.

But what’s the picture in Ras Al Khaimah itself?

Strong investor confidence is driving RAK’s buoyant construction and property market, which enjoyed a 15% increase in transactions and value in H1 2024. In early Q2 2024, RAK’s residential property market saw a new property launch every week, as investors rushed to buy into RAK’s economic success story. With the emirate growing into a major UAE real-estate player and investor destination, property capital values are rising by as much as 35% per annum, with annual returns currently around the 10% mark. Across the board, there are currently 1,000 different projects in various stages of construction across RAK, worth approximately USD 75 billion.

What’s behind this phenomenal growth?

A wave of bold new developments in RAK points to strengthening optimism and confidence in the emirate as developers undertake significant new real-estate projects. The development by Las Vegas casino operators Wynn Resorts of a USD 5 billion resort on RAK’s Marjan islands will feature 5-star resorts, shops and villas. With 1,500 rooms and around 7,000 employees, it’s Wynn’s first complex in the region and looks set to become one of the operator’s largest developments.

Elsewhere on the Marjan islands, over 20 different developers have a variety of projects underway, with most of them likely to be completed in just a few years. In hotel development alone, it’s expected that as many as 15,000 rooms will be available – and occupied – in RAK within the same short timeframe.

Residential development

Residential developments are keeping pace with the growing hospitality sector, and for investors, returns have been impressive, with typical four-bedroom villas on the market for just over USD 1.5 million. Branded residential developments such as those built by Abu Dhabi’s biggest developer sold out within a matter of hours.

Competitive, sustainable mega-residential developments like RAK Central, announced at the beginning of 2024, will harness cutting-edge technology and renewable energy to deliver sustainable living, whilst offering commercial rentals to attract major organisations to the emirate from a wide range of business sectors, including tourism and hospitality.

That will drive enhanced economic and commercial activity and help deliver on RAK Vision 2030, which seeks to create “prosperous, happy and cohesive communities, contributing to a sustainable Emirate…[to] support local businesses, while reducing…environmental impact”. Not only will it feature parks and green spaces to help sustain the communities that live and work at RAK Central, the government is aiding this development by creating the infrastructure within RAK Central to establish a hub for government services and business operations.

Construction: infrastructure, industry & manufacturing

Infrastructure to support the anticipated growth in visitor numbers and new residents is also developing at speed, so it’s no surprise that increasing numbers of construction firms are choosing RAK as a significant revenue opportunity and a launchpad for future regional expansion. With both overseas and local tourism to the emirate expected to edge close to 3 million by next year, a two-phase project will bring a new terminal to RAK’s international airport and expand existing terminal capacity. The plan is to welcome more than 2 million passengers within a few years, representing a tripling of passenger numbers.

With manufacturing already accounting for one-third of RAK’s GDP, industrial development is forging ahead, too; facilities such as Sobha Modular Industries’ 250,000-square-metre manufacturing plant at Al Hamra show that investor confidence in RAK and its burgeoning industrial construction sector is gaining strength. As the Sobha Group founder notes, this development “reflects the project’s vital role in bolstering the region’s economic and industrial capabilities…[and] serves as a stellar exemplification of Sobha Group’s unwavering commitment to innovation, quality, and sustainability.” Manufacturing bathroom facades and pods using AI technology, the facility can currently meet a production target of 50 pods per day, and will double output by 2025. As a major aluminium manufacturer, Sobha will also supply the material to manufacture the new facility’s products, with the whole project creating around 3,000 jobs in the region.

Several construction and building-product companies have significantly expanded their presence in the emirate, too; Fala Asphalt Industry first established itself in RAK in 2012, and plans to expand based on its success in the emirate. Elsewhere, along with Sobha Modular Industries’ expansion mentioned above, Hira Industries, Peikko and RAD International have all expanded their manufacturing and production facilities recently. Hira now has 7 operational units in RAK, as well as a new global R & D centre in HVAC solutions, and demonstrates increasing confidence in Ras Al Khaimah’s business-friendly environment. “Our expanded presence in RAK now with a total of seven units”, says Hira’s CEO, “underscores our focus on manufacturing activities within this region”.Peikko’s expansion has in part been driven by Ras Al Khaimah’s strategic location, which has allowed the company to pursue its growth trajectory through easy access to target markets in the UAE, GCC and MENA region.

Sustainability: natural resources & raw materials

RAK’s industrial zones provide the infrastructure needed to support and expand industrial and manufacturing output. The emirate’s industrial strength lies in the production of cement, construction materials, ceramics, and glass, making it integral to the UAE’s construction value chain and fueling its growth.

Access to local raw materials is not only helping the industry and the emirate drive economic growth, but is also a crucial factor in meeting sustainability targets. The Hajar Mountains are a rich source of limestone and crushed rock used in the manufacture of essential building materials, and the emirate’s Union Cement Company, established in 1972, now produces around 5 million tonnes of cement per annum. And it’s on track to meet its own sustainability targets through innovative waste-heat recovery technology delivering 25MW of green-energy capacity.

RAK’s sustainable access to local raw materials has also helped turn RAK Ceramics, established only 30 years ago, into the single biggest producer of ceramics in the world, with a presence in over 150 countries.

RAK: the ever-evolving success story of tomorrow

RAK’s huge success in attracting high-net-worth individuals and investors to the emirate is impressive. As pioneering private projects near completion, public infrastructure works will continue to support the commercial construction, tourism and hospitality sectors and add significant value to the overall economy. Ultimately, this will deliver a level of growth and opportunity unparalleled by today’s standards.

Ras Al Khaimah will become the place to live, work and play.