‘Monaco’ of the Middle East set to trump Dubai

It's still just a few minarets in the desert, but it's poised for a property explosion. The lunar landscape of Ras Al Khaimah is about to be transformed. It is creating a buzz about being the next Dubai.

The signs of existing wealth and impending transformation are there. A new airport, which opened last October, a Mercedes showroom and large walled villas point to the area already being popular with weekenders from Dubai.

A futuristic £800 million financial district and Free Trade Zone will bring residential and office towers and Dubai-style man-made islands will become home to dozens of five-star resorts, marinas and apartment complexes. Inland, a desert Banyan Tree resort is on its way, along with a university and golf courses – all set to turn RAK into a glitzy new tourist destination.

'Ras Al Khaimah will be the Monaco of the UAE,' claims Bilbo Perrot, a Swiss property consultant. 'RAK has lots of industry, including steel and the biggest ceramic factory in the world, but it is starting to attract foreign investors as a lifestyle destination and tax haven.'

RAK, which has a population of 250,000, is one of seven Emirates that make up the UAE and which run along the Persian Gulf.

Al Marjan is the first man made Island in Ras Al Khaimah. It has been built with best practice learning from successful schemes in neighbouring Dubai – the first of which, The Palm Jumeriah has witnessed a massive 500% increase in prices since 2002.

Al Marjan developer Rakeen has incorporated the most environmentally friendly practices during the islands construction using natural rock to attract coral life instead of 'hostile dredging'. This process positively encourages the formation of natural reef, establishing a long-term aquatic paradise.

A naturally beautiful country, Ras Al Khaimah boasts the longest coastline of all the United Arab Emirates (UAE) and is arguably the most scenic with miles of untouched white sand, lush green landscapes and striking mountain ranges.

Its investment potential sounds impressive – a projected capital appreciation of over 20% in 2008 and more importantly its close proximity to Dubai (just 45 minutes). It is easy to see how this Emirate is becoming attractive to commuters wanting a beach life or weekend retreat, and to the overseas holiday market alike.

'Dubai is overflowing and that's giving a big advantage to Emirates such as Ras Al Khaimah,' says Alistair Powell, MD of a London-based investment company.