Sharjah re-engineers city for future growth

It would be possible to get to Emirates Ring Road from anywhere in Sharjah in five to 10 minutes, Sheikh Tariq

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By  Eudore Chand Published  May 1, 2004

Vis-a-vis|~|Shj-GenB.jpg|~|Construction boom in Sharjah|~|The emirate of Sharjah in the United Arab Emirates has the sun, it has the sea, it has lovely beaches and it has mountains and mangroves. It also has a dynamic, forward-looking and young Sheikh Tariq bin Faisal Al Qassimi, as chairman of the emirate’s key Economic Development Department. In a wide-ranging chat with Construction Week’s Eudore Chand, soft-spoken Sheikh Tariq outlined the way Sharjah is changing to meet the demands of the future. CW: Are there any announcements that we can expect to be made in the near future about major new projects? Sheikh Tariq: It is better to beat people’s expectations. We, therefore, usually announce projects once they are finalised. CW: Could you provide our readers with an overview of where Sharjah stands now? Sheikh Tariq: Over the last five or six years, there has been phenomenal growth in all sectors of our economy. Our gross domestic product has risen at the rate of more than 6% per annum. All sectors are growing rapidly. For example, retail has seen an investment of more than Dhs2 billion in projects such as Sahara Mall, Mega Mall, Tawun Mall, Ansar Mall, Sharjah City Centre, Downtown Centre and Crystal Plaza – all of which are new investments made in just the past few years. We also have other projects coming up such as the upgrading of the Central Souk, which many familiarly know as the Blue Souk. We have seen substantial investments in a relatively short period of time and these have done very well for the promoters and the emirate. CW: What new projects in the retail sector could we expect? Sheikh Tariq: This year, we will see Downtown Centre and Safeer Mall, which are under construction, come up. There are also plans for two new shopping centres in the new areas near the University City. Mega Mall is expanding and so is City Centre. CW: Sharjah has a wealth of tourism potential. What is being done in this sector? Sheikh Tariq: We have seen the development of the Millennium Hotel, several furnished apartments and redevelopment by the Coral Beach Hotel Group. The growth in the occupancy rate is up from 50-60% to now 100%. Last summer, we had an average 78% occupancy, which is very healthy for a low season. There are three new hotels on the way. These are being developed and will be going to tender very soon. There are two or three others that are under study. These are all in the four- to five-star category. CW: Any reason for this surge in hotel rooms? Sheikh Tariq: Air Arabia has definitely contributed to the development of our hospitality sector. And what is more important is that this is all in the early stages. The potential will be seen in the next two to three years. There is very high demand for new hotels. Tourism, in general, is doing very well in the emirate. CW: Are there any other sectors that are likely to witness new projects and new growth? Sheikh Tariq: Sharjah has a substantial small-to-medium enterprises base. Its five main sectors are building materials, aluminium, plastics, food processing and gold processing. Sharjah has more than 1500 factories and over 20 000 institutions located in its industrial areas. Growth in this sector has been more than 15% per annum last year. We have seen highly satisfactory overall growth in all three sectors – industry, retail and tourism. Apart from this, we are also seeing a boom in the construction industry, especially in residential real estate. Occupancy rates for residential buildings are the highest-ever recorded in Sharjah. There is much more demand for developing new buildings. You just have to drive down Al Wahda Street to see the number of cranes that are towering over Sharjah skies. The real estate sector is growing, in reality, by 6-8% annually. This is a fundamental growth based on the developments in the region. CW: What are these regional factors? Sheikh Tariq: The whole region is opening up. There are new opportunities. There is political stability and there is growth in tourism. All of these factors contribute to more and more business coming to us. It also fuels demand for residential units. This is a fundamental growth that has logic to it and I expect that the boom will continue for at least the next three to five years. The government will continue its policy of freedom for business. Sharjah is a platform for doing business. It is a gateway to the Middle East.||**||Will Sharjah go the freehold way?|~|TariqB.jpg|~|Sheikh Tariq ... confident about the future|~|CW: Is Sharjah going to embrace the freehold drive that is taking place next door? Sheikh Tariq: Once there is a federal law, all emirates will follow it. I cannot say anymore. CW: How is the government of Sharjah facilitating the arrival of new quality developments? Sheikh Tariq: New quality developments are accorded priority in terms of all kinds of procedures. The Economic Development Department does not take a direct part as the municipality and the planning departments are responsible for licenses and construction regulation etc. But, we work with investors to ensure that all procedures are smooth and we interact with various authorities to make sure that all regulatory approvals are expedited. CW: We keep hearing of that pace of development in Sharjah is so rapid that utilities are not able to keep pace with the speed with which buildings are coming up and the way the emirate is expanding? Sheikh Tariq: Sharjah Electricity and Water Authority (Sewa) has major expansion projects. I believe that by the end of this summer, all power and water supply issues will be resolved. For the present, Sewa has a schedule. When a developer applies for a building permit, he is given a date for the connection, which ranges between one to two years from the time of the application. But as I said, the issue will be resolved soon. CW: If the real estate sector is booming, it must be very profitable? Sheikh Tariq: Return on investment in the real estate sector is very healthy. This is why we are seeing a lot of new investors coming in to develop new projects in Sharjah. CW: Would we see government or semi-government agencies take up major real estate projects in Sharjah? Sheikh Tariq: Our policy is to facilitate business rather than do business ourselves. We believe that a government is the worst businessman. The private sector is much more creative and much more cost-effective and we leave doing business to it. We set the policy and we set the plans that support growth. Regional implications that have affected the Emirates over the past 15 years or so have, thankfully, been positive. CW: Do you think that what is happening in Iraq is an opportunity? Sheikh Tariq: What has happened in Iraq has created new opportunities. Potential is definitely real and there. However, there are issues for concern. I believe that the UAE will take a fair share of the market in Iraq. It will supply building materials and raw materials. However, I still feel that it is too soon for local contractors to be physically present there. Iraq is more of a long term potential. In the short term, it has opportunities for trade. CW: What changes can we expect to see in Sharjah over the coming few years? Sheikh Tariq: We are on to beautification of public areas of Sharjah. We are in the process of building public parks and facilities for people. His Highness Dr. Sheikh Sultan bin Saqr Al Qassimi, Supreme Council Member and Ruler of Sharjah, is very keen to develop facilities that families can utilise. We have the Sharjah corniche area where phase one of the development work will be over in the next couple of months. Work on phases two and three will start later.||**||Developing other Sharjah emirate towns|~|Safeer-MallB.jpg|~|Safeer Mall on Sharjah-Dubai border|~|CW: It looks that Sharjah city is expanding towards the airport area. Should we start calling it the New Sharjah? Sheikh Tariq: It is logical that the growth of Sharjah should take place in that direction. We are restricted by Dubai and Ajman in our restructuring movement. Thus, the only way for Sharjah to grow is in the direction of the University City, and this is becoming more and more visible. CW: A cause of complaint in the city has been its road network, which has not been able to cope with the rapid growth in the emirate. Is anything being done about it? Sheikh Tariq: We have master plans. Substantial investments have gone into a new road network. We are also upgrading the existing Emirates Road network that will connect from Dubai to Sharjah to Ajman through Sharjah Ring Road. We are building three new highways in a grid pattern across the city. When ready, it will allow anyone to reach Emirates Ring Road from anywhere in the city within 5 to 10 minutes. Such a plan will reduce traffic congestion and is also aimed at ensuring the growth of the new areas in Sharjah by providing transportation infrastructure. CW: How much is the investment outlay? Sheikh Tariq: We have some Dhs1.3 billion worth of projects in the works. The roads network is in six phases and should start getting ready from September 2004 onwards. The first phase of the roads will be completed by April next year. We have plans to upgrade Al Wahda Street and redesign all the bridges so that there is a free flow traffic system all through Sharjah. There will be no stops. We are redoing Al Wahda, Emirates Ring Road and Al Ittihad Road from Al Saja to Al Awir. There are four roads that link Sharjah to Dubai. These are being upgraded and new extensions made through industrial areas. CW: What else is happening on the construction front in Sharjah? Sheikh Tariq: We have a Dhs75 million new office tower that is coming up. It should be ready in the next couple of months. I know of another office tower of 55-storeys which is to start construction soon. I cannot give the details, as it is the privilege of the owners to announce when they are ready. The mix of new developments is 90% residential and 10% commercial. Many of the corporates in Sharjah are in its industrial areas. We believe that there is an over supply of office space in the UAE, but that there is still growth potential in residential real estate. CW: We have heard that the Sharjah airport too, is being expanded. Is that true? Sheikh Tariq: Yes, the airport is being expanded. We need to have core infrastructure to develop our services for the tourism, retail and industrial sectors, which are in focus because of their high potential for opportunities for growth. For example, Air Arabia is pushing the tourism growth and already there is greater demand for hotels. Air Arabia has a fleet of three planes and will have six by the year-end. Expanding the airport will allow us to handle four to five times its last year’s capacity. The airport expansion is going to tender now and is to take 10 to 18 months to be ready. The investment in it is definitely much over Dhs100 million. CW: Your department will continue to operate from rented premises? Sheikh Tariq: No, we are moving into our own dedicated headquarters, which is near the new lagoon area next to Al Tawun Mall. It will cost us Dhs22 million. We shall have branches in Khorfakkan and other areas as well as boutique offices across the emirate of Sharjah. CW: What about the towns of Kalba, Khorfakkan and Al Dhaid? Sheikh Tariq: Other cities of Sharjah too, are expanding. The road network to them is being developed. We have just had a new Sharjah to Kalba road that takes us there in just 45 minutes through the longest tunnel so far in the region. Earlier, it used to take one and half hours to get there. This allows for more tourism and helps people living there, have better connections with Sharjah city. His Highness is keen to develop Khorfakkan Port, which will be expanded further. It is a busy port that is strategically located outside of the Gulf and did 1.6 million containers (TEUs) last year. We are building connectivity and developing new infrastructure. In general, the whole emirate is experiencing a boom.||**||

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