In Focus | Abu Dhabi Properties
Demand rising steadily
Investors buy property in Abu Dhabi as theyare attracted by the increasingly obvious economic growth as well as the investment opportunities being offered by the emirate.
- By Jane Woods, Gulf News Report
- Published: 00:00 October 29, 2006
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- Slow to join the regional real estate boom, Abu Dhabi now has half-a-dozen real estate companies - formed within the past two years - which are spearheading the transformation of the emirate into a modern Arabian metropolis.
Investors buy property in Abu Dhabi as theyare attracted by the increasingly obvious economic growth as well as the investment opportunities being offered by the emirate.
The frenzy that has been the Dubai freehold property scene over the last few years is now being challenged by the federal capital of the UAE, Abu Dhabi.
In summary, the Property Law, signed by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan on August 10, 2005, allows UAE nationals to own and trade land, GCC citizens to do so within designated investment areas, and other expatriates to invest on a leasehold basis within the investment areas.
After a substantial period of media build-up, developers are launching their first projects for sale to expatriates on a leasehold basis.
There are currently two designated investment zones in Abu Dhabi in which foreign nationals can now purchase off-plan residential and commercial units:
- Sorouh, Tamouh and Reem Investments are the master developers for Al Reem Island, situated 400 metres offshore opposite the Abu Dhabi Mall and Beach Rotana Hotel. This location ideally suits those who want to be in close proximity to downtown Abu Dhabi and benefit from the extensive facilities of the island.
- Aldar Properties is the master developer for Al Raha Beach, which is located on the waterfront at the entrance to the city and 10 minutes from Abu Dhabi International Airport, suiting those looking for a more 'out of town' lifestyle.
Investors who are looking at Abu Dhabi as the new place to invest in the UAE are attracted by the increasingly obvious economic growth and investment opportunities being offered by the capital.
To give a snapshot of just a few of the reasons why Abu Dhabi is attracting so much interest:
- Capital Centre, the new name and brand for the $2.17 billion business and residential micro-city being built around the iconic Abu Dhabi National Exhibition Centre in the UAE capital.
- Thirty industrial clusters (ICADS) developed within seven years across more than 300 square kilometres of land. Two are already operating with some 82 of 160 major international manufacturing companies working in ICAD I and 40 major companies setting up their operations in ICAD II, which is 96 per cent booked, committing more than Dh10 billion to date in investment.
- Khalifa Port, a new $2 billion port that will also include an industrial zone. Phase one will be completed within five years.
- The Dh7 billion Rotating City is moving to Abu Dhabi from Dubai and will require 15 million square feet of land for the development.
- Saadiyat Island, the 2,700-hectare natural island 500 metres offshore is being transformed into an international tourism destination. Saadiyat Beach, to the north-west of the island, will have a range of five-star resorts flanking nine kilometres of pristine beach, a championship golf course, dedicated sailing club and private beach clubs.
- Etihad Airways, winners of the World's Leading New Airline at the 13th World Travel Awards, will expand routes to 70 international destinations by 2010.
- The biggest indoor theme park in the world and the first in the Middle East covering 80,000 square metres will be built in Abu Dhabi, to be completed by 2009.
- Abu Dhabi will house the only Guggenheim museum in the region, which, at 30,000 square metres, will be larger than any existing Guggenheim worldwide. It is expected that the museum will be constructed within five years.
- Abu Dhabi is forecast to award more than Dh47 billion of construction projects by 2007 and it is anticipated over the next five years that investment in all sectors will reach more than Dh500 billion.
- The Abu Dhabi economy is expected to attract more than $4 billion this year in direct foreign investment. That figure is expected to double over the next few years with the establishment of new industrial cities and estates alongside progressive real estate investment and property holding laws.
- The Abu Dhabi economy claimed the highest per capita GDP in the world last year at Dh169,500. The private sector's contribution increased by 17.6 per cent, improving economic performance and boosting the achievement of potentially high, sustainable growth rates which are expected to hit 9.8 per cent in 2006.
When one looks at the future of Abu Dhabi, an urgent requirement for a substantial increase in residential and commercial stock is obvious.
As private investment by developers increases in Abu Dhabi, a competitive market will emerge for investors, both individual and institutional. Buy-to-let yields are likely to be attractive given that the current demand for units to rent in the capital far outweighs the available supply. Put together the positive forecasts for Abu Dhabi's economy and the extensive plans for tourism, with the current tax-free investment environment and the fact that the emirate already has a legal structure in place for the ownership of property - and the future looks very bright indeed.
Residents who have long been paying 'dead money' in high rents will look forward to being able to invest in their own homes and see capital growth. The prospect of owning the place you call home, without having to worry about tenancy contracts, is attractive to long-term residents, many of whom have put their roots down here.
- The writer is Director of Business Development, LLJ Property.
