ADCB unit plans Dh5b realty foray

Abu Dhabi: Abu Dhabi Commercial Properties (ADCP), the real estate affiliate of Abu Dhabi Commercial Bank (ADCB), on Saturday revealed plans to establish 700 new projects providing 18,000 units at an estimated cost of Dh5 billion.

The company is in the process of taking over the management of 2,500 buildings, or more than 40,000 units, in the capital from the Department of Commercial Buildings (Khalifa Committee), a process that will be completed by the middle of this month.

"We received our first newly-constructed commercial building in the first week of June, while the new projects are planned in the city of Abu Dhabi, Mussafah, Al Ain and Al Gharbiya [Western Zone] to cater to the growing demand in the emirate," Jasem Al Darmaki, ADCP's managing director, told Gulf News.

The construction sector in Abu Dhabi is now required to follow strict guidelines related to protecting the environment, as a step towards implementing new laws and regulations, adding to the costs which are already soaring owing to the increasing prices of building materials.

"All our new projects are environment-friendly, as we seek to utilise internationally recognised expertise in the field to maintain the concept of sustainable development," Al Darmaki said.

"These new units will be accomplished within two years with the government providing the necessary finance, and we will introduce more than 9,000 new units by August 2010," he said.

ADCP has recently opened new offices in Abu Dhabi and Al Ain, and is planning more offices in Mussafah and Al Gharbiya soon, to match its new role as the successor to the Khalifa Committee.

According to the Department of Planning and Economy, the real estate sector's contribution to the gross domestic product of Abu Dhabi has recorded a 22 per cent annual growth rate during the past five years, and is expected to grow further till 2010.

"The increasing prices reflect the imbalances between the supply and demand, but the market will achieve equilibrium by 2011 or 2012, when the ongoing mega developments are expected to enter the market," Al Darmaki said.

ADCP is already providing units leasing and management services, after partially taking over Khalifa Committee's tasks, through its office at the Tourist Club area.

Daunting challenges

The increasing prices of building materials and labour costs represent the greatest challenges for the further growth and development of the real estate sector in Abu Dhabi, according to a senior executive.

"During the first six months of 2008, steel, cement, and labour costs recorded an increase of about 40 per cent, and forecasts predict higher increases next year," Jasem Al Darmaki, managing director of Abu Dhabi Commercial Properties said.