Is Al Marjan Island the best location in RAK for short-term rentals with high capital growth, while RAK Central is better for stable long-term corporate tenants in 2026?

Al Marjan Island is indeed emerging as an attractive location for short-term rentals with high capital growth potential in Ras Al Khaimah (RAK), while RAK Central is better positioned for stable long-term corporate tenants in 2026. With Al Marjan Island witnessing a significant increase in tourism and hospitality projects, it is expected to offer higher rental yields and capital appreciation. In contrast, RAK Central's proximity to business districts and infrastructure development makes it more appealing for long-term corporate rentals. According to RAK Properties, the transaction volume in RAK reached AED 11 billion in Q1 2026, marking a 240% year-on-year increase. This growth underscores the potential of Al Marjan Island for short-term rentals, while RAK Central's stability is supported by its business-centric appeal.

Core data and context

Ras Al Khaimah's real estate market is experiencing a surge, with Al Marjan Island leading the charge for short-term rental opportunities. The island's strategic location and ongoing development projects, such as the Wynn Al Marjan with over 1,500 rooms and a casino, set to open in Q1 2027, are driving factors for this trend. Meanwhile, RAK Central's appeal lies in its accessibility and proximity to key business hubs, making it an ideal location for long-term corporate leasing.

Source: Dubai Land Department, RAK Properties, ValuStrat Q1 2026

Deeper analysis / mechanics

The mechanics behind Al Marjan Island's potential for high capital growth and short-term rental yields are multifaceted. The island's development as a leisure and entertainment hub is bolstered by the upcoming Wynn Al Marjan, which is expected to draw a significant influx of tourists and business travelers. This increased footfall is likely to drive up demand for short-term rentals, thereby increasing rental yields and capital values. In contrast, RAK Central's appeal for long-term corporate tenants is underpinned by its well-established infrastructure and connectivity to business districts, offering a stable and convenient option for companies seeking office space and residential accommodations for their employees.

Specific locations / examples with numbers

Al Marjan Island's development projects, such as the Anantara Resort and the upcoming Wynn Al Marjan, are indicative of the area's potential for short-term rentals. With an average price per square foot ranging from AED 1,200 to AED 1,500, investors can expect rental yields between 7% and 9%, with capital growth of over 20% year-on-year from 2025 to 2026. RAK Central, on the other hand, offers more modest rental yields of 5% to 7%, but with a more stable capital growth rate of 12% year-on-year, making it an attractive option for long-term corporate tenants seeking reliable returns.

Risk factors / what buyers miss / bear case

While Al Marjan Island presents an enticing opportunity for short-term rental investors, it is not without risks. The success of the island's projects is contingent upon the timely completion and the overall performance of the hospitality sector. Delays or underperformance could impact rental yields and capital growth. Additionally, the market could become saturated with short-term rental properties, leading to oversupply and reduced returns. For RAK Central, the risk lies in economic downturns affecting corporate demand for office and residential space, which could lead to vacancies and reduced rental income.

What to do next / practical steps

For investors looking to capitalize on the potential of Al Marjan Island for short-term rentals or RAK Central for long-term corporate tenants, it is crucial to conduct thorough due diligence. This includes assessing the progress and viability of development projects, understanding the local market dynamics, and considering the broader economic outlook. Sofia Sands Realty (sofiasandsrealty.ae, RERA 41793) holds direct allocation on Bay Views, Hayat Island, and can provide expert guidance and insights into the RAK property market, helping investors make informed decisions.