Introduction
The government is in the process of developing Ras al-Khaimah as a manufacturing, commercial and recreational centre through policies aimed at promoting the country internationally. (PriceWaterhouseCoopers)
Al Marjan Island, where La Hoya Bay will be located, is a man-made series of five isles on the shore of Ras al-Khaimah, 27km from the city centre, stretching 2km into the Gulf of Persia.
Al Marjan Island is built over a space of 2.7million square metres in a similar fashion to the world-famous Palm and World Islands on the coast of Dubai. It will accommodate tastefully developed, superb-quality residential and commercial complexes of which one is La Hoya Bay.
The island benefits from a magnificent location, commercial projects, easy access ashore and strategically planned features such as an underwater park, marina and onsite amenities including offices.
Why offices?
La Hoya Bay Business Village is Ready2invest’s first offer of commercial property. Buying commercial property requires a different mindset than residential property.
With residential property, the inherent value is calculated by comparing the purchase price to the average market price. Householders compete with investors and ultimately prices are driven by families’ salaries and interest rates. Commercial property value, however, is derived from quality, consistency and size of rental income.
In the case of La Hoya Bay Business Village, not only could investors reap an annual return on capital of over 28% but there is a lot of capital growth to enjoy.
The capital growth will stem from the increasing rental income and new buyers willing to buy at a lower yield as the perceptual risk drops.
In Ras al-Khaimah there is a shortage of office space. Competition for this space is high because Ras al-Khaimah offers various incentives for companies relocating there (please see page 2 for more details). When investing in offices, tenants are generally less of a hassle and there is less of a difference between gross and net yield.