Sharjah is benefiting from ongoing rental rate rises in Dubai as residents look to relocate to more affordable accommodation according to a Q1 2014 Northern Emirates report from Asteco, the region’s leading real estate services company.
On average the emirate recorded 7% quarter-on-quarter growth for apartment rentals, and a strong year-on-year figure of 38%, whilst rates in the other Northern Emirates of Fujairah and Umm Al Quwain remained stable, with Ras Al Khaimah and Ajman showing marginal growth of 2% and 3% respectively in Q1 2014.
“Budget-conscious Dubai residents are now relocating to Sharjah in a flight to affordability. A vastly improved road network and public transportation, has also benefited the northern emirate,” said John Stevens, Managing Director, Asteco.
Apartments in key residential areas such as Al Nahda, Mina and Al Wahda have seen average rental increases of 10% to 11% in the last three months and Asteco expects rental rates to continue on their upward trend through to the end of the year with no new supply due to come online.
“We are also seeing rental increases for Sharjah’s older apartment buildings, which grew by an average of 6% quarter-on-quarter, and this reinforces the attractiveness of the emirate to budget-conscious residents,” said Stevens.
Prospective tenants looking for ‘prime’ accommodation in Sharjah can expect to pay anywhere between AED 27,000 to AED 50,000 for a desirable one-bedroom apartment and AED 32,000 up to AED 80,000 for a two-bedroom unit.
Rental prices in the Al Wahda neighbourhood are currently fetching up to AED 50,000 and AED 65,000 for a one and two-bedroom apartment respectively, with similar buildings located in the popular Corniche stretch commanding up to AED 50,000 and AED 80,000 respectively.
Prices are being boosted by a number of government-led tourism and leisure initiatives including development within the retail sector, notably the expansion of Sharjah City Center and other initiatives in Al Khan and Al Qasba, which will drive increased tourism traffic as well as serve local residents. A 7,000-square metre Roman-style amphitheatre also opened recently last March 2014 on nearby Majaz Island with a capacity for 4,500 people.
“Most importantly, we are seeing a complete upgrade of Sharjah’s transportation infrastructure, making the daily commute to Dubai easier and reducing traffic congestion within the emirate,” noted Stevens.
The recently completed work at the National Paints Bridge/fifth interchange is one example of the expansion plan being undertaken on the busy Mohammad Bin Zayed Road.
Sharjah’s commercial sector has also seen leasing rate increases in several popular locations over the last quarter with the Corniche and Al Wuheidah Street recording growth of 8% and 5% respectively despite continued sector stagnation with just 2% growth overall.