Abu Dhabi attracts global investors looking for access to some of the most ambitious projects in the world
All the words in the thesaurus can't describe the growth that the Abu Dhabi property market has been witnessing, so it's up to the mind-boggling figures to do the talking.
According to property finance company Tamweel, residential retail real estate sales in Abu Dhabi will reach around $2.5 billion (about Dh9.195 billion) in 2007, with the mortgage market worth more than $800 million (about Dh2.94 billion) by the end of the year.
The Abu Dhabi Chamber of Commerce and Industry says the GDP for the emirate will touch $159 billion (about Dh584.8 billion) by 2010 with the share of non-oil activities rising from $44 billion (about Dh161.83 billion) to $72 billion (about Dh264.81 billion).
With $136 billion (about Dh500.2 billion) targeted for construction and building, $55 billion (about Dh202.29 billion) for tourism, $9.5 billion (about Dh34.94 billion) for water and electricity and $33 billion (about Dh121.374 billion) for industry, Abu Dhabi is clearly on a roll.
The market is buoyant enough to warrant the debut of the property exhibition Cityscape that is slated to run at the Abu Dhabi Exhibition Centre in May this year.
Mark Goodchild, Project Manager, Cityscape Abu Dhabi, says, "With an estimated $270 billion (about Dh993 billion) in construction projects either planned or under way, Abu Dhabi has the financial muscle to attract regional and international investors looking for access to some of the most ambitious projects in the world."
Affluent emirate
According to Cityscape's figures, Abu Dhabi has more than one million inhabitants, and is among the wealthiest emirates in the UAE with the highest per capita income in the world at $46,147 (about Dh169,728) in 2005.
It has proven oil reserves that, estimates say, will last for another 150 years and currently pumps 3.5 million barrels of oil per day generating an excess of $90 billion (about Dh331 billion) annually.
Naseem Siddiqui, COO, Reem Investments, says the Abu Dhabi property market is in its fledgling state, as only a year has lapsed since the government allowed trading in land.
"The Abu Dhabi market has huge potential. Unlike Dubai, which has been experiencing development for the past decade, the Abu Dhabi property market has just begun growing," says Siddiqui.
"The physical delivery of the planned projects will only start in 2008 and that's when the market will heat up. I would advise investors not to look for short-term gains, as the market will grow cautiously."
Foreigners can buy property inAbu Dhabi only in specified economic or investment zones with leasehold rights for 99 years.
Leasehold basis
"But this trend is not unique to the UAE, a majority of the property in countries such as the UK and India is sold on a leasehold basis," says Siddiqui.
Profile Group Properties, a locally owned real estate and property investment company, was the first to offer property for sale to both local and expatriate homeowners and investors in Abu Dhabi with the launch of its Marina Heights on Al Reem Island.
"With the original release of the Abu Dhabi property law, the initial investment options for expatriates to own property within the capital were luxury apartments in one of the designated investment zones with a 99-year renewable leasehold contract," says Guy Sadler, Head of Marketing for Profile Group Properties.
"We've been delighted with the demand for apartments on Al Reem Island and since our launch of Marina Heights a number of new participants have entered the market also with considerable success, which only reaffirms the value of Al Reem and the entire Abu Dhabi property market.
"More recently we've seen new investment options for expatriates such as villa communities in Al Shahama and Profile Group Properties will soon be marketing its own projects in the region as well," says Sadler, who feels expatriate investors are more interested in property investment in the capital now that the law has become clearer.
Prestigious projects
"The leasehold title gives investors full use of the dwelling and the land on which it sits for the entire tenure of the lease," he says.
Managed by DAMAC's Abu Dhabi office, the Oceanscape project will be located on Al Reem Island.
"Oceanscape won the CNBC Arabian Property Award last year based on its location, appearance and finish, safety and innovation and the marketing campaigns that were undertaken to launch the project," says Hussain Sajwani, Chairman, DAMAC Holding Group.
DAMAC counts Abu Dhabi as one of its key markets. "It was a great year for our team in Abu Dhabi and we aim to go higher this year. We are looking forward to our upcoming project on Al Reem Island," says Peter Riddoch, CEO, DAMAC Properties.
Mortgage options
Banks such as the National Bank of Abu Dhabi are offering attractive home mortgage options that have furtherfuelled the market.
"The property market is currently enjoying an extraordinary boom in Abu Dhabi. Although the emirate has been slow to join the regional real estate boom, with new property ownership laws in place since last summer, several huge projects are being launched, including Al Raha Beach and Shams Abu Dhabi by Sorouh Real Estate.
"There are many chances and opportunities for investors and end users to cash in on these as it's the right time to invest," says a spokesperson for the National Bank of Abu Dhabi.
Expatriate investors
There has also been a change in the investors' demographics.
"At launch in January 2006 our initial clients were either Emiratis or GCC nationals, but since mid-last year, this profile has changed dramatically with increasing interest from expatriate investors and homeowners.
"Clients from the UK and Ireland now make up the overwhelming majority of our new sales, followed by Western Europe, Southeast Asia, Asia, the Americas and Australasia," says Sadler.
There has also been a noticeable trend towards referral buying. "People are hearing positive things about Abu Dhabi in the media and from their friends and family who have invested in property and are following suit. With more than Dh500 billion worth of investment planned, Abu Dhabi is going to pull a number of aces out of its hat," he says.
