For the first time, expats will be allowed to buy leases of up to 100 years on Sharjah properties, but only if they fulfil certain conditions, it has been announced
For the first time, foreign buyers are to be allowed to buy property in Sharjah, in the Middle East – as long as they have a United Arab Emirate residency visa.
Faced with increasing demand from expats working in Dubai, but finding real estate to expensive, the Sharjah government has agreed to grant leases of up to 100 years to expats under certain conditions, including holding a United Arab Emirates residency visa.
But foreign buyers will not be able to own the land and will only allowed to purchase the leases in new investment areas on the edge of the city centre, it has been announced.
The first new development to offer the long leases will be Tilal City, a mixed use neighbourhood for 65,000 residents, incorporating retail, office, residential and recreation facilities, which is being developed by Sharjah Asset Management and Eskan Real Estate Development.
Speaking at the project launch, Sheikh Sultan bin Ahmed Al Qasimi, Chairman, Tilal Properties, says,”Tilal City is one of a series of projects that will be implemented by Tilal Properties and it will allow UAE residents to buy properties on a 100-year leasehold basis, according to the laws regulating Sharjah’s property market,”
Faisal Durrani, international research and business development manager at Cluttons, says, “This is a historic milestone for Sharjah. Traditionally, international investors have focused their attention on Dubai and Abu Dhabi, but the move will open up a new market, to investors residing in the UAE.
“The success of Tilal City is likely to determine whether a number of similar schemes are brought forward in Sharjah. However, based on the number of gated community feasibility studies that Cluttons has been commissioned to undertake, in close proximity to Sharjah International Airport, we expect to see similar developments launched in the short to medium term. The current shortage of these types of communities is causing a real demand from families residing in Sharjah, but also from families who want to relocate from Dubai in search of affordability.”
The new regulations would create “new cluster cities” outside central Sharjah and reduce traffic and congestion in the main city centre, says the government.
The Executive Council Resolution 26, approved by Sharjah’s deputy ruler, Sultan bin Mohammed Al Qasimi, overturns previous rules that prevented anyone other than GCC Arabs from owning real estate in the emirate.
Hamad Salem Al Mazrooa, Director General of the Sharjah Real Estate Registration Department, says, “There are over 220 nationalities here in the emirate of Sharjah. But we think the biggest demand will come from Arab and Asian Muslims living here who want their families to live in a stable and safe environment.
“The only restriction is that they must have a residence visa at the time of purchase. If for some reason after the purchase their residence visa expires, they are free to hold the property, lease or sell it as they wish.”
The moves are also aimed at preventing property speculation and flipping.
Sharjah Real Estate Registration Department plans to open a registration office at the Tilal City site where foreign investors can register their properties.
According to Cluttons, which is marketing Tilal City, the strong growth of the UAE economy, is being mirrored in Sharjah, and this has boosted demand in both the residential and commercial property markets in the emirate, as well as rental values.
Steve Morgan, Chief Executive, Cluttons Middle East, says, “Average rents in Sharjah are currently AED 72,000 per annum, and rental values have grown by 53% since 2012. This significant increase is a result of strong tenant demand and a lack of available stock.
“Looking forward we forecast that rents will continue to rise as a result of tenant demand, due to the diversification of Sharjah’s economy, reverse migration from Dubai and international companies present in the UAE targeting Sharjah for staff housing requirements.
“The commercial property markets will also continue to grow as a result of Sharjah’s rapidly expanding SME sector and a distinct lack of grade A office space at present, which remains in high demand. These are just some of the reasons why we believe Tilal City is a good choice for investors as well as those looking for a family home.”
Tilal Properties will sell freehold land plots for GCC and Arab Nationals, but all other nationalities will be entitled for a 100 year leasehold.
By Adrian Bishop, Editor, OPP Connect