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Projects to develop the Northern Emirates infrastructure and tourism facilities are expected to keep the construction sector ticking over in the absence of an investment boom, says Mridula Bhattacharya THE construction sector in the Northern Emirates continues to face a host of challenges amidst a weakened economic and investment climate. While no new projects have been announced, the ones under way have witnessed a slow pace of development and extended handover dates. The demand for housing in the Northern Emirates has also declined due to excess supply and competition from Dubai. Before the worldwide economic recession hit the market and before the downturn in Dubai, people were opting to live in Sharjah to benefit from the lower rents. However, as the rents continue to fall in Dubai, there is a definite move back to the emirate, with Sharjah and Ajman, in particular, being most affected. According to a report by real estate consultancy Asteco, owners of old buildings in the Northern Emirates are finding it difficult to retain tenants, as more and more residents are moving or upgrading to new buildings. An increasing inventory of new towers is also affecting the market, with growing occupier movement away from ageing buildings that lack sufficient amenities and facilities. Prime properties set to enter the market over the next 12 months include the Al Ghanem Business Centre Tower, which is located in the Al Majaz area in Sharjah
Ajman has seen an increase in supply of both residential and office spaces with the handover of various new projects including Falcon Towers. The project comprises 840 apartments spread over seven residential towers as well as one office tower. New developments are also being handed over in Fujairah and Ras Al Khaimah, which will ultimately result in people relocating to the newer buildings and will have an adverse effect on rental rates in mature projects
There has been a five per cent decline in rents in the third quarter of this year compared to the second quarter as tenants moved to new …