x Abu Dhabi, UAEFriday 28 July 2017

Dh5.7bn investment boosts businesses

Property companies report surge of inquiries in wake of Sheikh Khalifa's announcement of water and electricity infrastructure upgrades

Ras al Khaimah and the other northern emirates are to benefit from new investment funds allocated by the government this week.
Ras al Khaimah and the other northern emirates are to benefit from new investment funds allocated by the government this week.

DUBAI // Within minutes of the news, the phones began ringing in the offices of property companies in Sharjah and Ajman. For the first time since the global financial crisis erupted more than two years ago, people suddenly wanted to buy, they wanted to lease, they wanted to rent.

It was clear that the President's announcement on Tuesday of Dh5.7 billion of investment in electricity and water infrastructure in the northern emirates had provided an immediate and welcome boost to the local economy.

Khalid al Fardan, a property agent in Sharjah, reported 30 calls from prospective buyers yesterday. Of those, 17 had come to view the properties by noon. More were expected yesterday evening.

"We can't talk of rising prices now," he said. "All we can say is the real estate business has regained its bright future in the northern emirates."

Ali al Janahi, the managing director of Delmon Real Estate in Ajman, said: "We had several calls on Wednesday from people who want to buy, lease or rent property," said. "Many have regained confidence in the emirate, and for us as real estate dealers, we're just hopeful that our business is going to pick up again."

Abubaker Baidha, a businessman in Ajman, bought 14 flats several years ago, before the Federal Electricity and Water Authority (Fewa) announced it would stop supplying power to private and commercial buildings in the emirate.

On Wednesday, Fewa announced it would construct 17 power stations in the northern emirates to deliver power to most of the businesses in the region.

"For about two years, my investment remained idle and the bank kept on calling me," he said.

"Then we agreed to bring a powered generator to supply the building, but before we could get tenants a global financial crisis hit the real estate business, and there were no tenants. Until now, only six of my flats are occupied."

Mr Baidha said yesterday he was optimistic that the new supply of electricity would help him to find tenants willing to pay the rent he believed his investment was worth.

Sheikh Rashid bin Humaid al Nuaimi, the chairman of Ajman Municipality and Planning Directorate, said that about 300 towers in the emirate that have no electricity would benefit from the federally funded infrastructure.

One hundred businesses currently running on generators would now receive power under the initiative.

"This is a big boost to the economy of Ajman," he said.

Ahmad Mohamed al Midfa, the chairman of the Sharjah Chamber of Commerce, said the increased investment in water and electricity projects would encourage further investments in other sectors in the region. "Investment in water and electricity is going to make investments in all the northern emirates much more competitive than before," he said.

Business owners in Sharjah said they had suffered financial losses in the past two summers, as power cuts were commonplace in Sharjah.

"We are grateful to the President and would be grateful to authorities if this money is used well, so that there are no power cuts this summer," said Abu Riyadh, the owner of a car workshop in the Sharjah Industrial 4 area.

"I made about Dh100,000 in losses last summer. That is big money to me, and I don't want it to happen this year."