As a leading tourism hub, Al Marjan Island’s property values are significantly influenced by tourism activity and development.
Overview of Al Marjan Island
Al Marjan Island is a cluster of four man-made islands stretching 4.5 km into the Sea. The islands are Breeze, Treasure, Dream, and View and cover an area of 2.7 square km.
It offers 7.8 km of beaches and 23 km of waterfront. It’s an easy place to get to, just 59 minutes from Dubai Airport.
- Al Marjan Island’s Vision as a Tourism Hub
- Al Marjan Island was developed as a premium destination to promote tourism in Ras Al Khaimah. The master plan includes hotels, resorts, residences, retail, dining, and leisure activities.
Key components:
- Over 8,000 hotel rooms across the island
- Luxury hospitality brands like Rixos, DoubleTree by Hilton
- Upcoming Wynn Hotel with gaming facilities
- 12,000 residential units
- Diverse retail and dining options
This vision makes Al Marjan a leading leisure and tourism spot, attracting visitors globally.
Impact of Tourism Growth on Property Values
As Al Marjan Island establishes itself as a leading tourism destination, the resulting growth in visitor traffic delivers a major uplift to real estate values. Some key impacts on the property market:
Surging Rental Yields
With more tourists flocking to Al Marjan, hotels and hotel apartments see higher occupancy and room rates. This enables owners to charge premium rents, pushing up rental yields. Average rental yields for residential units on Al Marjan Island are projected to be 5-8% yearly.
Rising Investment Demand
Given the high rental yields, more investors are drawn to purchase properties on Al Marjan Island to leverage tourism activity. This rising investment demand puts upward pressure on capital values. Due to high demand, MASA Residence branded by YOO and Address Residences by Emaar is giving 36 percent return on investments over a three-year period.
More Amenities and Attractions
New tourism projects create amenities like waterparks, beach clubs and marinas for visitors. More attractions on the island increase the appeal for tourists as well as residents. Due to the heavy luxury amenities focus development, studio prices have jumped 10-15%, while one-bedroom units have risen 5-10% In the last quarter.
Capital Values
With tourism expansion, demand for real estate will rise further, causing property prices to appreciate. The scarcity of land for residential development will also push up capital values. As per estimates, housing prices on Al Marjan Island are forecasted to rise by 10-15% annually.
Government Incentives
The Ras Al Khaimah government has an instrumental role in promoting tourism and real estate:
- Significant investments in infrastructure - airports, road connectivity.
- Relaxed foreign ownership laws.
- Financial incentives for hospitality projects.
- Streamlined regulations and business-friendly policies.
- Effective destination marketing and promotion.
Infrastructure Expansion
Roads, transportation networks and utilities infrastructure are expanded on Al Marjan Island to accommodate and facilitate the influx of tourists. This infrastructure development elevates property values.
According to Maxim Novikov, Head of RAK branch at Metropolitan Premium Properties, stated, “Ras Al Khaimah property prices are surging due to growing investment attractiveness. Prices may rise 50% by casino opening; act now to take advantage.”
Commercial Development
With greater visitor footfalls, retail brands and restaurant chains open new outlets on the island. More commercial properties catering to tourism pushes up real estate demand.
Economic Multiplier Effects
Increased tourists create jobs in hospitality and services, generating employment and income growth for the local population. This spurs housing demand and consumption.
International Spotlight
As Al Marjan Island gains fame as a tourism hotspot regionally and globally, it gains more mindshare among high-end travellers. This positions it as a prestigious destination, driving up property prices.
The compounding impact of these tourism-led dynamics leads to a virtuous cycle of rising investment flows, development activity and property values on Al Marjan Island.
Key Tourism Projects Driving Property Values
Major tourism projects that boost Al Marjan’s investment appeal and property prices
Wynn Hotel and Casino
The $3.9 billion Wynn resort and casino will be the first integrated resort in Ras Al Khaimah.
- Scheduled to open in 2027
- 5.6 million square feet area
- 1500+ rooms and villas
- Luxury amenities including retail, dining, and entertainment
As the largest tourism project on Al Marjan Island, the Wynn complex will significantly uplift property values in the vicinity.
The Address Residences
Developed by Emaar, The Address Al Marjan Island offers 600 meters of beachfront views.
- Luxury apartments and townhouses
- Handover in early 2028
- Average price of AED 2750 per square foot
The project adds premium residential options, attracting affluent tourists.
Marjan Beach Resort and Spa
This all-inclusive 5-star resort by Marjan offers a luxury beachside experience.
- 373 rooms and suites
- Multiple restaurants and bars
- Beach, spa, gym and pool facilities
As a top beachfront hotel, it brings in wealthy tourists, increasing rental demand.
Nikki Beach Residences
Nikki Beach Residences on Al Marjan Island features 1-4 bedroom apartments & 5-bedroom villa right on the beachfront, along with signature Nikki Beach amenities like beach clubs, pools, restaurants and bars.
Developed by Aldar, these swanky residences let buyers live the Nikki Beach lifestyle and deliver a novel residential concept that adds to Al Marjan Island’s tourist draw.
Data-Driven Insights on Tourism Impact
Quantitative data provides insights into Al Marjan Island’s tourism growth and its effect on real estate:
23% Growth in Ras Al Khaimah Tourism
In 2023, Ras Al Khaimah saw a 23% increase in international tourists over the previous year. The number is 1.22 million. This rising influx implies growing demand for Al Marjan properties.
30% Lower Property Prices than Dubai
Al Marjan apartments are approximately 30% cheaper than Dubai properties. RAK real estate averages AED1,627/sqft compared to AED2,203/sqft in Dubai. This positions Al Marjan as an affordable luxury destination.
Up to 8-10% Growth in Property Values
Industry experts predict Al Marjan real estate values will rise by 8-10% yearly , outperforming the UAE market.
Tourism Catalyzes Economic Development
The flourishing tourism industry has set off a ripple effect of economic development on Al Marjan Island, creating a thriving real estate ecosystem.
Commercial Activation
Retail brands, restaurant chains and entertainment operators are launching new outlets and attractions to cater to the high visitor footfalls. This unlocks opportunities in Al Marjan’s commercial real estate market.
Population And Job Growth
Expanding hospitality and tourism facilities create abundant employment, attracting more working residents to the island. The resulting population growth sustains housing demand.
Private Sector Interest
Active private sector interest is seen in the form of new hotel projects, expanding retail avenues and upcoming entertainment attractions on Al Marjan Island.
Development Momentum
With tourism thriving, developers are launching more residential, commercial and mixed-use projects to meet demand and tap into the island’s growth prospects.
Infrastructure Upgrade
Roads, transportation access, power and water infrastructure are being upgraded to support the increasing population and tourists on Al Marjan Island.
Government Revenues
The government earns significant tax and fee revenues from tourism, which can be channelled into further development of the island’s infrastructure and facilities.
This self-sustaining tourism-powered ecosystem creates the ideal backdrop for continued real estate expansion and value appreciation on Al Marjan Island.
Factors Moderating the Impact of Tourism on Property
While Al Marjan Island’s property market is poised for prosperity anchored on booming tourism, some potential factors could moderate tourism’s impact:
Market Saturation
If too many hotel and resort projects are approved, it may result in an oversupply, diluting the ADRs and occupancy levels for hospitality assets.
Regional Volatility
Geopolitical tensions or turmoil in the Middle East that make the region less safe or desirable for travel may hamper tourism activity.
Off-peak Seasons
Certain months like summer, see far fewer tourists visiting. This off-peak seasonality results in inconsistent demand and revenues.
Access Constraints
Any limitations on convenient access to Al Marjan such as flight route reductions, may make travel tougher, thereby reducing incoming tourists.
High Asset Valuations
As capital values appreciate quickly, rising prices could eventually make Al Marjan less lucrative for investors relative to competing destinations.
These are general factors in every real estate market. Let’s see some growth momentum of AL Marjan Islands.
In 2022 alone, the Las Vegas gaming strip generated $8.8 billion in revenue. Considering this potential, we can expect that Only Wynn’s resort has the ability to generate 58% ROI.
Al Marjan Island has 45% of five-star luxury homes in the UAE. This type of monopoly back up the real estate sector.
Renowned players like & H,H Emaar, Hilton Aldar, and J W Marriott launch projects in Al Marjan island frequently.
However, given Ras Al Khaimah’s broader market strength and Al Marjan Island’s existing momentum, tourism will continue to be the prime catalyst for real estate growth on the island. And government support is an add-on benefit. So you can easily invest in AL Marjan Island without any fear.
Investor Perspective - Al Marjan Island
From an investor’s perspective, Al Marjan Island offers:
Capital appreciation as property values rise with growing tourism.
Good rental yields owing to strong hospitality and tourism.
Strong government support for real estate growth.
Relaxed foreign ownership laws.
Developed infrastructure and connectivity.
Conclusion
Al Marjan Island’s strategic focus on luxury tourism drives up its real estate values. Growing visitor numbers and major new developments generate strong investment interest in its properties.
While some risks exist, Al Marjan’s strengths as a tourism center points to exciting times ahead for its property market. For investors and homebuyers, the island offers an opportunity to own premium freehold assets positioned for growth.
