Asset diversity will be a key talking point with more Abu Dhabi developers launching projects in the middle-income segment Image Credit: Supplied

The next three years will be keenly observed by analysts and stakeholders in the real estate industry as the Abu Dhabi government carries out economic initiatives that are part of a Dh50-billion stimulus packaged announced this year. One of the initiatives outlined by the government is a cost-cutting review of building regulations for infrastructure, residential properties, commercial and industrial sectors, which is expected to help reduce costs for developers and encourage urban development.

While the fence sitters among investors and other industry players in the UAE capital search for clues and signs within the next few months, the International Real Estate and Investment Show (IREIS), which opens tomorrow at Adnec in Abu Dhabi, could serve as sort of a curtain-raiser to a new era in Abu Dhabi real estate.

“There are various government initiatives behind the Dh50-billion public spending announcement aimed at stimulating private sector investment in the Abu Dhabi economy,” said Peter Stebbings of JLL Middle East and North Africa (Mena), who will moderate a talk on Abu Dhabi real estate market trends along with Sameh Muhtadi, CEO of Bloom, and Maan Al Awlaqi, commercial director of developer Aldar. “If successful, this would lead to a more diversified economic base and an improvement in demand for and returns from real estate.”

Guidance from the government

All eyes, however, will be on key participants from the public sector, as market players look for further guidance on the government’s plans related to real estate. One of the top government officials expected at the event is Khalifa Al Mansouri, under-secretary of the Abu Dhabi Department of Economic Development, who will conduct a presentation at the exhibition’s Abu Dhabi Investment Conference, focusing on why the emirate is an ideal destination for doing business.

An important development this year is the participation of the Abu Dhabi Investment Office (ADIO). Ahmed Bin Ghanam, CEO of ADIO, is expected to announce new investment opportunities in Abu Dhabi, following up on the investor-friendly economic reforms announced by the government.

“We are privileged to have ADIO with us as our strategic partners. Having them will prove to be a one-stop shop for our exhibitors and trade visitor who decide to invest in Abu Dhabi in particular, and UAE in general,” said Antoine Georges, managing director of Dome Exhibitions, which is organising the exhibition. “It will accelerate the process of doing business and help bring investment flow. The tie-up is one-off, but we are talking to a permanent arrangement and we are also in touch with other relevant authorities so that our exhibitors and visitors take the full advantage of their presence in the IREIS.”

Industry numbers

With the government’s stimulus package now gradually playing out in the real estate market, the inputs and takeaways during the conference will be invaluable to investors and stakeholders keenly observing price trends and looking for signs of an uptick and a stronger final quarter.

According to the Cavendish Maxwell Q3 2018 Abu Dhabi Market Report, while prices remained under pressure in the third quarter, the pace of decline in Abu Dhabi’s investment zones has slowed. Apartment sales prices in investment zones have declined by 2.7 per cent on average over the last 12 months, and by 1.7 per cent over the quarter. Villa sales prices saw average quarterly and annual declines of 2.8 per cent and 4.2 per cent, respectively, with Al Reef villas registering the highest decline of 3.7 per cent over the quarter.

Residential rents in Abu Dhabi investment zones were also down by 5.6 per cent over a 12-month period.

Apart from price trends, asset diversity will also be a main talking point moving forward with some developers now launching projects in the middle-income segment since the end of last year, according to the Cavendish report. “Investors are being more cautious and waiting for stability to return to the market before making any decision regarding property purchase,’’ said Manika Dhama, associate partner, strategic consulting and research at Cavendish Maxwell.


CITIZENSHIP AND REAL ESTATE

With many countries now offering a citizenship or residency in exchange for real estate investment, immigration specialists find the UAE a treasure trove of potential customers on account of the country’s huge expatriate population. According to experts, residency prospects for countries in Europe, America, Canada, the Caribbean and Australia have attracted wealthy investors and skilled immigrants through business and investment immigration programmes.

The Expo opens residency and second citizenship prospects to realty investors Supplied

Demand from UAE expats for Caribbean citizenship, for instance, has increased by 51 per cent, the highest in the world, according to organisers of the Residency & Citizenship Expo at the International Real Estate and Investment Show (IREIS), which opens tomorrow in Abu Dhabi. Some of the popular countries offering such schemes include St. Kitts & Navis, Dominica, Grenada, Antigua & Barbuda and St. Lucia. Among the nationalities that have sought second citizenship are those from Syria, Yemen, Lebanon, Saudi Arabia, Bahrain, Kuwait, Oman, India and Pakistan.

"We are promoting the three Caribbean countries that are Dominica, St. Kitts & Levis and Grenada where we are government mandated," said Alexander Bello, managing partner of CS Global Partners, which is participating at the expo. "We saw high-level interest in our premium real estate projects and in the business immigration industry."

It is estimated that the UAE hosts more than 8 million expatriates, or around 88 per cent of the population, according to IREIS, making the country an ideal hub for second citizenship and residency prospects.