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169 Real Estate & Construction All real estate segments in recovery after downturn Residential property prices rising since end-2012 Government to continue promoting market stability Major urban planning projects set to spur growth Pipeline for construction projects looks promising 170 REAL ESTATE OVERVIEW The sector is currently witnessing a period of growth and rising prices The price is right Growing demand and tight supply seem likely to continue over the next few years As of the third quarter of The real estate sector in Abu Dhabi is currently in a peri- CEO of TDIC, told OBG. “The development of its three 2014, all segments of the od of growth and rising prices, after a downturn fol- museums bolsters the growth of the leisure and hos- real estate market were in lowing the global financial crisis that began in 2008. pitality industries.” Outside of Saadiyat, the company simultaneous recovery for the first time since the According to a real estate market overview for the emi- is also undertaking several projects on Abu Dhabi Island downturn in 2008. rate by Jones Lang LaSalle (JLL), the third quarter of and in the Al Gharbia region. 2014 saw all segments simultaneously in recovery for Mai Hassan, a JLL financial analyst, told OBG the gov- the first time since 2008. The firm reported that the ernment is set to maintain its high level of involvement office, hotel and retail segments were all in the early in real estate investment development for the foresee- stages of a period of accelerating growth in late 2014, able future. “The government is likely to want to remain while rents in the residential segment were transition- active as a major player, as it appears to want to man- ing from a period of accelerating growth to slowing age supply and demand, and keep the market stable.” growth, though not yet in decline. BIG NAMES: Founded in 2004 and based in Abu Dhabi, MAJOR PLAYERS: Aldar Properties is one of the most Tamouh Investments is a real estate development com- prominent real estate developers active in the emirate, pany focused on developing communities and sustain- with a portfolio of Dh14.1bn ($3.8bn) of investment able living. In April 2014 the real estate developer scaled properties and Dh2.7bn ($735m) of investment work up construction activity on Al Reem Island projects. in progress as of September 2014. The Abu Dhabi gov- The island covers an area of 6.5m sq metres – 60% of ernment is a major shareholder in the firm, via a 29.75% which has been allocated to Tamouh for development stake owned by government investment firm Mubadala in accordance with the “city within a city” master plan. Development Company; it is also listed on Abu Dhabi The firm is planning for a community of 100,000 res- Securities Exchange. Aldar is the master developer for idents, as well as daily commuters and professionals. several major projects, including the leisure, retail and Tamouh’s offerings on the island include: Marina Square, tourism development Yas Island. The company was cre- home to more than 8500 residents with 3440 units, all ated through the 2013 merger of government-backed of which are smart home enabled; Paragon Bay, a com- developers Aldar and Sorouh. Until the merger, the lat- munity mall with more than 100 specialty retail and din- ter was the master developer of Al Reem Island. In ing options; City of Lights, a mixed-use development December 2014 Aldar saw its rating upgraded by Stan- project comprising seven residential towers and two dard & Poor’s from “BB+” to “BBB-” with a stable out- buildings for offices and commercial use. City of Lights look, reflecting its improved financial profile. is set to be completed in stages between 2014 and 2016. Another major player is the fully government-owned Tamouh resumed work in late 2014 on Meena Plaza, Tourism Development and Investment Company (TDIC), a 246,500-sq-metre project that consists of three apart- which describes itself as the “master developer of major ment towers and one office building, and includes tourism, cultural and residential destinations in Abu recreational areas, a cinema and health care facilities. Dhabi”. The firm’s flagship project is the development Joe Ong, managing director of Tamouh, told OBG, “Pro- Pursuant to its goal of of the 27-sq-km Saadiyat Island, where three major jects like the development of Al Reem Island and Meena preserving market stability, museums – Louvre Abu Dhabi, Guggenheim Abu Dhabi Plaza illustrate the complexities of accommodating a the government is set to and Zayed National Museum – are being built, in addi- diverse resident profile in Abu Dhabi. The island is home maintain its high level of involvement in real estate tion to other developments, such as several hotels. to families that enjoy the quality of life and calmer sur- investment development for “Saadiyat can be thought of as an extension of Abu Dhabi roundings, while also attracting more and more young the foreseeable future. with a special emphasis on culture,” Ali Al Hammadi, the people.” Tamouh is also building some 3000 villas for www.oxfordbusinessgroup.com/uae-abu-dhabi-2015 REAL ESTATE OVERVIEW 171 nationals at Jebel Hafeet in Al Ain. The development will to develop sustainably built homes, comprehensive Urban development plans also include associated infrastructure, such as parks, internal infrastructure and facilities such as streets, will see the creation of a eight mosques, a family centre and a health clinic. The schools, parks and mosques, with the aim of ensuring second main hub – Zayed City – as well as limits on contractor Trojan is responsible for construction, with that the needs of residents are largely met within such the expansion of Abu Dhabi the project scheduled to be completed in mid-2016. communities. “CSC applies to all development master City’s metropolitan area to Ong told OBG, “It is important to remember that there plans in the emirate,” Al Ahbabi said. “Our aim is to help ensure the efficient use of is also growth to tap into across the emirate. Our proj- achieve better, healthier and happier communities by resources and ect in Al Ain illustrates that there is an appetite for providing them with better spaces in which to live. infrastructure. comprehensive development with an emphasis on com- Today, many people travel from outside of the city into plete lifestyle offerings, including amenities such as Abu Dhabi; we want to encourage people to live and parks, activities and family resources.” work within their communities.” Founded in 2010 and headquartered in Abu Dhabi, The UPC has designed new communities, such as Aabar Properties is a real estate development, manage- North Wathba, in which residents can, as the UPC puts ment and investment company focused on developing it, “lead a high-quality lifestyle close to home”. A key a range of properties. The firm’s developments are aim is enabling people to live, work and play all within spread across Al Raha Beach, Al Reem Island, Rawdhat a walkable distance – aided by infrastructure such as and Saraya. Aabar Properties’ offerings include: The shaded footpaths – to improve their health and qual- Wave, a 23-story residential tower located in Najmat ity of life. In line with the initiative, in September 2014 along the marina waterfront; Al Durrah Tower, a 40- the UPC announced new Abu Dhabi Community Facil- storey residence on Al Reem Island; Al Raha Beach, ity Planning Standards, mandating the provision of a which will comprise four tower blocks stretching over minimum level of community facilities – such as schools, 87 km of waterfront; and Hard Rock Hotel, a five-star medical facilities, community, sports and leisure cen- hotel that will house the international restaurant of the tres, and police stations – in new communities in the same name, as well as offer 378 luxury apartments. emirate, as well as existing ones that are being rede- Aabar Properties recently announced the launch of veloped, though these depend on the size of the com- its Al Raha Beach project. Construction is already under munity. All development proposals for communities of way and is expected to be completed in 2017, with over 2000 residents must comply with the standards. Ghantoot Murray & Roberts – a joint venture between Another key feature of Plan Capital 2030 is the cre- Ghantoot General Contracting and South Africa-based ation of a second main hub – Zayed City. The planned construction firm Murray & Roberts – winning the con- development, originally known in the Urban Structure tract for construction in March 2014. A month earlier, Framework Plan as Capital District but subsequently Al Futtaim was awarded a $180m contract for the Hard rebranded, is located on the mainland east of the exist- Rock Hotel, and Dubai-based Arabtec signed a memo- ing centre, between the city’s airport and Mohammed randum of understanding with the real estate firm for bin Zayed City. The planned district will span 45 sq km its subsidiary, Arabtec Construction, to build 37 towers and accommodate more than 290,000 residents. Its in Abu Dhabi and Dubai worth Dh22.44bn ($6.11bn). detailed timescale is currently being established. URBAN PLANNING: In addition to its involvement via SUSTAINABILITY: In 2008 the government introduced state-backed developers, the government is seeking to an initiative called Estidama, meaning “sustainability” directly shape the urban development of Abu Dhabi in Arabic. One of its key components is a sustainabili- through a range of planning strategies and regulations. ty ratings system for new buildings, villas and commu- Chief among these is the Abu Dhabi Urban Planning nities, which was launched in 2010 and is based on a Council (UPC) plan for the development of the emirate’s scale of one to five “pearls”.