Booming Abu Dhabi Property Market Creates Unprecedented Opportunities
The Abu Dhabi real estate market has been experiencing unprecedented growth over the past two years and is poised for a coming decade of growth and development, according to speakers at an international real estate investment conference.
The speakers also cited political stability, windfall in oil revenues, existence of sound legislation and infrastructure, and commitment of an estimated Dhs 250 billion to construction projects, among others, as key drivers of the Abu Dhabi market.
“We project that 250000 new housing units will be required in Abu Dhabi over the next decade to meet projected demands” said one speaker.
Speaking at a conference held on the sideline of the Abu Dhabi International Property and Investment Exhibition, RSP Group Managing Partner Blair Hagkull identified a series of key real estate trends that have contributed to the buoyant market environment in Abu Dhabi.
“Over the past year RSP Group have worked in more than 20 Middle East and North African countries on real estate projects worth more than US $ 80 billion. This has included more than US$25 billion in the Abu Dhabi emirate alone, which has contributed to Abu Dhabi’s designation as one of the leading real estate markets in the entire Middle East, recognition that has typically only been granted to Dubai and Doha”. ” said Hagkull.
He added that the new generation of leadership in Abu Dhabi has recognized the important role that real estate development and investment plays in a maturing economy.
“Now that the new real estate law has been announced local, regional and international real estate developers and investors recognize the huge potential in Abu Dhabi, not only in Abu Dhabi city but throughout the emirate.”, he said.
Hagkull, whose group is considered the largest regionally-based real estate and hospitality investment advisory organisation in the Middle East revealed that a researched conducted by the group has shown that the population of the city of Abu Dhabi will double in the next 10 years from approximately one million residents to over two million people.
“There continues to be a shortage in all types of residential development with occupancies above 90% in all asset classes” said Hagkull, adding: “This has contributed to an increase in residential rental rates between 20 and 40% over the past two years.” The hotel and tourism sector is also an important demand drive, said Hagkull. He further added: “The Abu Dhabi Tourism Authority is playing an integral role in encouraging major new private investment in the tourism sector.
Not only is hotel occupancy on a 70-80% occupancy on an annual basis, the Average Daily Rate (ADR) has increased almost 30% in the past two years.” In his presentation, Hagkull identified a series of key demand drivers that contribute to the growth of the real estate market.
In addition to population growth, he noted the importance of overall economic development, the planned free zones, the industrial development projects including the proposed new port project at Taweelah , and the leasehold options for expatriates as some of the factors contributing to the positive investment climate.
Acknowledging that the freehold and leasehold projects are new in the emirate, Hagkull identified that leading private Abu Dhabi based real estate investors already have significant experience in real estate development.
“Many Abu Dhabi-based developers have been amongst the first investors and builders of freehold real estate in Dubai, including prime locations like Emaar’s Dubai Marina and Nakheel’s Jumeirah Beach Residence.”, he said.
They know the real estate scene as well as their neighbors in the Dubai and Doha, he added.
Ibrahim Belselah, CEO of Reem Investment also pointed out that Abu Dhabi offers a unique market in a politically stable country characterized by massive industrial growth. The government of Abu Dhabi, he said, has committed an estimated Dhs. 250 billion to construction projects.
He pointed out that Reem Investments, an Abu Dhabi-based company with a paid-up capital of 1.555 billion dirhams, will provide home in Reem island for 80,000 people by 2012.
Saeed Al Mullah, Commercial Director of Surouh also pointed out that the government of Abu Dhabi launched a series of initiatives to encourage investment. These projects, he said, expansion of airports, roads and ports.
“We expect to attract an estimated 25 billion dirhams in investments by 2011. By that time, we will have housed some 75,000 people in Shams Abu Dhabi”, he said.
Exhibitors at the show which is being organized by DOME Exhibitions Company expressed their satisfaction over the deals which they have concluded during the show. The show, they said, provided an opportunity for developers and GCC, Arab and international investors to meet fact to face and conclude deals.
“The exhibition has been successful because it acted as a confluence point between investors and developers on the one hand and financiers on the other. The fact that there was a strong participation by three groups in the show is an indication that the property sector has propelled itself to the top of investments”, said Antoine Georges , General Manger of DOME Exhibitions, the organizers of the show.
