Abu Dhabi: After years of focus on prime residential projects, property developers in the UAE are turning their gaze to mid-market accommodation and are aiming to capitalise on growing demand in that sector.
At Cityscape Abu Dhabi, which kicked off on Tuesday, developers showcased their plans for new mid-income projects, which included a Dh1.3 billion, 1,272-unit residential development from Aldar Properties, the Abu Dhabi developer.
Talal Al Dhiyebi, Aldar’s chief development officer, said that a growing number of end users is entering the market as buyers, after the market had been dominated by investors, and that trend is driving demand for mid-market housing.
“There’s a lot of latent demand (for mid-market units), but I think the problem is with supply; there wasn’t enough quality supply of mid-income product to tap that demand. We tested it with Meera, which was our venture into this market in 2015, and we were pleased with that … It’s a totally new ball game; we’re playing in a new segment of the market that was, in our view, untapped, and that’s why we’re seeing very good demand,” he told Gulf News.
Al Dhiyebi said that Aldar may consider launching new mid-market products this year if the company sees enough demand.
Other developers such as the Tourism Development and Investment Company (TDIC), which is known for its high-end villas on Saadiyat Island, said it is currently examining options in mid-market housing and may announce a new project in that segment soon.
Similarly, Bloom Properties said it is focusing on mid-market housing as the developer unveiled its plans for Bloom Towers, a mid-market residential development in Dubai’s Jumeirah Village Circle. It is scheduled for completion in the fourth quarter of 2020.
“[Mid-market accommodation is seeing] the highest demand. We’ve done our own research, we’ve sought the input of consultants, and that is the one market segment that continues to grow, and that’s where the strongest demand is,” said Sameh Muhtadi, chief executive officer of Bloom Properties.
So far, Bloom has launched 1,600 mid-market units in Dubai, and it plans to do the same in Abu Dhabi. The CEO said the company plans to launch a mid-market residential project in Abu Dhabi in the next few months.
Discussing outlook of the overall property market, Muhtadi said, “There are certainly headwinds in certain segments. We are tackling what remains in demand, so I’m optimistic about that particular sector.”
The new property launches come as developers eye new segments of the market away from the prime sector, which has been hit by softening demand as investor sentiment weakens on the back of slower economic growth and lower oil prices.
A report from property advisory JLL on the market’s performance in the first quarter of 2017 said that further declines are expected in certain sub-sectors over 2017 due to the decline in demand growth and sentiment. The report pointed that the recovery of Abu Dhabi’s real estate market was “heavily dependent on the return of government spending to drive economic growth and sentiment.”
Cityscape Abu Dhabi was officially opened on Tuesday by Shaikh Hazza Bin Zayed Al Nahyan, vice-chairman of the Abu Dhabi Executive Council. The event runs till April 20 at the Abu Dhabi National Exhibition Centre (Adnec), and brings together over 100 exhibitors.