Just in case there was any residual doubt, it is now full steam ahead on the development front in the UAE capital, if last week’s Cityscape Abu Dhabi is anything to go by.
The emirate’s biggest real estate investment and development event opened the eighth edition of the annual gathering of the great and the good in the property industry, attracting a raft of local and international investors with cash to splash.
More than 120 exhibitors took part in the showcase at the Abu Dhabi National Exhibition Centre (Adnec) and the three-day event offered leading property developers the chance to flaunt their new and rebooted projects.
Analysts have recently reported that all sectors of the Abu Dhabi property market are gaining momentum towards a healthy recovery. They also say the real estate sector is showing strong signs of maturity, as the emirate looks forward to achieve its 2030 vision. And certainly the mood at Cityscape was unmistakably upbeat.
Shared optimism
But that isn’t to say lessons haven’t been learned. Exhibitors Property Weekly spoke to repeated the same mantra: there is real cause for optimism but financial caution must be exercised and incoming tougher regulation and more transparency are going to be the keys to success. Regarding Cityscape, the prevailing view was that things look better this year than in 2013.
One new development on display that embodied the cheery outlook was the Dh3-billion Bawabat Al Sharq luxury mixed-use complex, which was a hive of activity at the show. The almost sold-out development, located about 20 minutes outside Abu Dhabi city on the way to Al Ain, has been created over the past five years by Baniyas Investment and Development Company (BIDC). It includes a 60,000-sq-m shopping mall and a Gems-operated school for 3,400 students, which are both already open. There is also a Fifa-standard sports stadium and a large medical centre.
BIDC has completed the first phase of Bawabat Al Sharq’s residential section, consisting of 164 apartments and 56 luxury villas. Phase two, also complete, comprises 129 detached villas with private gardens and swimming pools. It also features 500 apartments in 14 buildings occupying six blocks.
“I believe Bawabat Al Sharq is the flagship when it comes to mixed-use developments, because it is a community where you can live and have all the services you need right around you,” says Wael El Ashry, Commercial Vice-President of Baniyas. “It has world-class infrastructure and residents can live, play and entertain in their own neighbourhood. It is a place that can support many areas of a person’s lifestyle.”
The project is for sale to UAE nationals only and is not an investment zone. However, El Ashry said several clients have purchased units to be rented out. “The rental market is definitely picking up,” he says. “There is increased demand and we feel that with the apartments that will be coming online at the end of this year, we are in a good position to benefit.”
He adds: “Cityscape Abu Dhabi is very important in terms of our planning for our commercial activities throughout the year. It is the platform of choice for developers wanting to take the pulse of the market and it is not just about interacting with investors, but also with suppliers and stakeholders. There are deals that can be made here, which in the end translate to value.”
Apartment rents in Abu Dhabi increased on average by nearly 12 per cent in the previous quarter compared to the same period last year, according to published figures. Government intervention has been widely credited for the rebound in residential activity over the past year.
Community projects
Mixed-use projects in general led the way at Cityscape as developers identified community living areas as the most profitable long-term real estate offerings for investors in the Middle East.
Several exhibitors took advantage of the upbeat investor sentiment to launch new projects. Hydra Properties, for instance, pre-released several units of Hydra Avenue Phase II on Reem Island and offered buyers a special 60-40 per cent construction-linked payment plan.
“We understand that real estate development is more than just building houses, it is about building communities and, therefore, we try to differentiate ourselves by being a comfortable living developer,” says Mohamad Al Habech, Chief Commercial Officer of Hydra Properties. “Amenities such as gyms and swimming pools, children’s playgrounds complemented by social rooms and a running track define comfortable living and establish our projects as desirable for both investors and end users alike.
“We aim to create a more enjoyable urban lifestyle. In order for us to succeed we must remove the boundaries of only putting buildings and houses in place and must start thinking how to build communities, which highlight social interaction. This is really what differentiates us.”
This year’s event saw quite a few foreign firms in attendance, notably Turkish and British developers, all out to lure GCC clients.
Several Dubai-based real estate companies were also exhibiting, partly for visibility and partly eyeing to move into a lucrative neighbouring market.
Maria Merchak, a property consultant at Roots Land, says the company exhibited at Cityscape Abu Dhabi to “present our Dubai products, while at the same time to look into possible agreements with Abu Dhabi developers, as we are definitely looking to expand”.
Estidama programme
She says big, futuristic green projects on display such as Masdar City impressed her the most.
Indeed, environmentally themed designs were apparent at the show and it was clear that many developers and the government are extremely serious in this area. The issue of sustainability is central to Abu Dhabi’s 2030 vision and the emirate’s Urban Planning Council (UPC) placed a special emphasis on its Estidama programme, designed to promote sustainable living in the capital, at its mammoth exhibition stand.
“Estidama is a vision and a desire to achieve a new sustainable way of life in the region and we hope that by exhibiting at Cityscape Abu Dhabi we can promote and share this vision with others,” said Falah Al Ahbabi, General Manager of the UPC.
“Through careful design, construction and operation, the mandatory Estidama Pearl Rating System can help residents and developers design and construct attractive buildings with a longer lifespan and reduced operating cost, which are both in the best interests of these stakeholders and the emirate as a whole.”
Bright outlook
With the growing investor confidence in the capital and the recent expansion in other sectors such as finance, hospitality, aviation, healthcare and tourism, the residential sector looks set to enjoy a period of sustained growth in price and rental values.
“I think we need to throw a bit more light on the efforts of the Abu Dhabi Government and the UPC,” says El Ashry. “Legislation continues to improve and investments in real estate are being made more accessible for a bigger segment of the market and for international buyers who want to come here.
“At the same time, the government is very progressive and has an eye on environmentally friendly homes. All this helps to really put Abu Dhabi on the map when it comes to residential investment opportunities.”
