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Can tiny northern emirate outshine Dubai and Abu Dhabi?

By John Defterios, CNN
updated 7:51 AM EDT, Thu March 13, 2014
STORY HIGHLIGHTS
  • The emirate of Ras Al Khamiah is undergoing a rapid luxury property transformation
  • The northernmost emirate of the UAE is often overlooked alongside Dubai and Abu Dhabi
  • International hotel brands and developers are flocking to RAK to build new facilities and residences

(CNN) -- For centuries, Ras Al Khamiah was a strategic outpost along the ancient silk road trading route.

Today, the northernmost of the seven emirates that make up the UAE is often overlooked alongside its extravagant neighbors of Dubai and Abu Dhabi.

All that could be set to change, however, with the ruling Al Qasimi family set to make a big push in the region's burgeoning residential and tourism sectors.

See also: Visit the Abu Dhabi's fantasy island

International hotel brands such as Hilton and Rixos have moved in while developers are building luxury apartments and villas at a rapid pace.

By the end of 2014, Ras Al Khamiah (or RAK as it is often known) will have some 4,800 hotel rooms, a 60% expansion from the start of last year. The government says occupancy is currently running at 73% for beachfront resorts and revenue per room rose a solid 39% in three years.

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Vice president of operations at Hilton, Christian Grage, believes these rising numbers are only the beginning of what's possible in RAK. The Hotel giant has been in the emirate for more than a dozen years and opened a branch of the Waldorf Astoria there last August.

"We actually are not necessarily surprised about what has come," Grage said. "I would describe it as if you build it they will come. I think we have anticipated the opportunity."

Interactive: What country is the biggest investor in international property?

To help fill out RAKs new capacity, Air Arabia, a fast growing budget carrier, is set to move in to replace a struggling local airline. The hope is this partnership will help provide easy access to RAK from the likes of India and Saudi Arabia.

A group of international travel experts, meanwhile, are fine tuning a grand master plan to ensure that demand is aligned with all the new hotel and residential inventory coming on stream.

The first results of this strategy can be seen at the Al Hamra village where more than 1,000 luxury villas have been already sold to property investors from around the world.

See also: Where is world's most expensive luxury property?

With prices starting at $1.3 million at entry level and rising to $8 million at the top end, however, investment in Al Hamra doesn't come cheap.

These prices equate to a maximum price of $3,800 per square meter ($353 per sq ft), but General Manager of the development, Benoy Kurien, said he is maintaining a sizable discount compared to prices in Dubai.

"(This represents) 20-30% cheaper rates per square meter for any property you buy whether it's an apartment or a villa and that is significant value without compromising," Kurien said.

The early signs are promising, but whether this rising emirate succeeds in its plans will depend on continued growth as new properties and facilities are completed.

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