Capital gains

The Guinness World Records' recognition for Abu Dhabi's Capital Gate tower couldn't have come at a better time. The world's furthest leaning man-made structure will be one of the crucial drivers in Abu Dhabi's quest for quality office space. Besides housing the five-star Hyatt Capital Gate, the tower will be home to premium offices spread across 15 floors.

"While there is significant amount of commercial space that will be launched in the Abu Dhabi market in 2010-2011, very little of this is superior Grade A office space. Even less of it will be able to rival Capital Gate's location," says Ali Saeed Bin Harmal Al Dhaheri, managing director, Abu Dhabi National Exhibition Centre (Adnec).

Unwilling to commit on the tenant profile it is seeking, Adnec has adopted a strategic approach about the kind of organisations it wants to be represented within the building. The project promoters will count on the exclusivity of location to delineate commercial units in Capital Gate from the influx of office space in the capital.

"It is expected that Capital Gate will compete with top business addresses from all over the world and leading local business entities. The target market will be major corporations involved in activities that are strategically important to Abu Dhabi and who may set up their regional headquarters in the tower," says Harry Goodson-Wickes from Cluttons, Abu Dhabi.

This would in effect mean that the tenant mix could be from industries which would contribute towards Adnec's events and exhibition business, such as aerospace, oil and gas, financial services and home-grown emerging and mainstream entities. Work on the exterior of the Capital Gate is over, while the interior fit-out will be ready by the end of the year.

A global conferencing hub

Once completed, it is widely perceived that the 35-storey tower will help cement Abu Dhabi's position in the global conferencing industry. Touted to be the centrepiece in the multi-phased Dh8-billion Capital Centre development, the landmark building will also raise the capital's profile internationally and heighten interest among high-spending business tourists.

Capital Gate will be connected to the grandstand and exhibition centre by a stainless steel mesh that descends down the face of the tower. The uninterrupted floor plates and desirable location are likely to draw in blue-chip commercial tenants.

It is expected that the supply of new office space in Abu Dhabi and the current economic situation might slow down the take-up in Capital Gate in the short-term. However, iconic buildings, all over the world, enjoy high occupancy rates and strong demand in the medium- to long-term. At the same time, market experts feel that the completion of Capital Gate in isolation may not cause price appreciation in the Adnec precinct.

"Despite being an iconic building, it is unlikely that the Capital Gate will cause the prices of properties in close vicinity to appreciate. However, once the adjoining Capital Centre project is completed, prices might be positively affected by the Capital Gate as both will form a live, work and play community," says Saadallah Al Abed, senior consultant, research and advisory, Colliers.
 

Meanwhile, some other components in the Capital Centre masterplan are complete. These include the Adnec grandstand, exhibition halls, conference and meeting facilities, two multi-storey car parks, the Aloft Abu Dhabi hotel and a wedding hall. A marina zone on Khaleej Al Arabi Road, comprising a 350-metre quay wall and approximately 20,000 square metres of open space, is also ready. This will be linked by a pedestrian bridge to the Adnec grandstand.

Capital Centre is Adnec's Phase 4 development, comprising 23 third party developments. One of these, the Element Hotel, is also being developed by Adnec. This phase also includes masterplanning of the site (now complete), the development of infrastructure such as roads, landscaping and services (commenced), a district cooling plant and an electrical sub-station on an adjacent land plot (being developed by a third party).

"As is to be expected in a master development of this scale, we are following a phased approach. We are constantly in dialogue with the plot developers who are eager to maximise the potential from this thriving events destination. The plots themselves are in varying stages of development," Al Dhaheri adds.

Businesses such as Al Nasser Holdings and The National Investor (TNI) have already decided to relocate their headquarters within the Capital Centre development. Meanwhile, construction of International Tower (commercial), developed by SinoGulf is progressing.

Hospitality element

To address the affordability concerns of event planners, Adnec is adding mid-range hotels such as the Aloft and Holiday Inn to the mix in Capital Centre. Other leading hospitality brands such as Rotana, Millennium and Premier Inn will also have a presence.

"Events attract a diverse array of participants and the accommodation and entertainment alternatives need to reflect this. The hotels at Capital Centre will provide a range of options — three-, four- and five-star. The availability of these options, next to a thriving commercial event destination like Adnec and within easy reach of Abu Dhabi city and the airport, will certainly heighten the attractiveness of these hotels," says Al Dhaheri.

According to a research by Reed Travel Exhibitions and Meetme, a trade publication, Abu Dhabi has moved up to second place regionally in terms of its popularity as a destination for organisers who will be holding business events over the next year. Last year, it was in third place after Dubai and Egypt.

This could partly be owing to the Advantage Abu Dhabi initiative by the Abu Dhabi Tourism Authority (ADTA) which offers incentives to business event organisers to lure them to the capital. "Event organisers can apply to this initiative for start-up financial grants, government endorsement, leadership patronage, cost rebates and marketing support if their event is related to key sectors outlined in the 2030 Economic Vision," explains Al Dhaheri.

This could explain how the number of events Adnec hosted in 2009 grew almost nine-fold from just four years ago (from 14 events held at the old events facility in 2005 to 119 events last year). Adnec is currently the largest exhibition centre in the Middle East and North Africa region and boasts 73,000 square metres of live event space. It also features the UAE's largest single hall auditorium with retractable seating, 20 meeting rooms, outdoor exhibition space and a 20,000 square metre waterfront event space. "Adnec is one of the few venues in the world capable of staging major indoor, outdoor and marine events simultaneously," the Adnec executive adds.

The capital's investment in hotel inventory, infrastructure and tourism will help it stave off competition from more established conference destinations like Dubai. While high prices were earlier a major concern for organisers looking to place events in Abu Dhabi, the emergence of mid-range hotels and drop in rates by suppliers have helped attract meeting planners.

"Seven new hotels have come online in Abu Dhabi within the past six months and ten more are due to open in the emirate this year. Abu Dhabi now boasts a state-of-the-art inventory of meetings facilities and a hotel room stock of 17,500, which is due to expand by a further 5,000 this year," Al Dhaheri forecasts.

Adnec is building the Al Ain Convention Centre district in Al Ain. Its international portfolio includes ExCeL (Exhibition Centre London), the UK capital's largest exhibitions venue, in Docklands. In addition, Adnec has just announced the development of the 252-room Aloft London ExCeL, which will be delivered before the London 2012 Olympics. The Aloft brand is part of Starwood, which also has the W and Le Meridien brands.