Abu Dhabi Multi-Billion Dollar Projects
Fingers crossed for Abu Dhabi’s overly optimistic $208 billion-dollar projects
Nothing’s stopping the emirate of Abu Dhabi from catching up with its rival Dubai in the United Arab Emirates; even when it comes to extreme city budgets. Well, why not? This emirate or kingdom/sheikhdom in the UAE has about 94 percent of the oil resources in the country – or 10 percent of the world’s reserves, which Dubai no longer has. On top, Abu Dhabi seeks to diversify its industry and tap deeper into tourism by achieving to deliver 17,000 new rooms by 2015, adding to its luxury resort inventory until 2030, and complement sites and attractions before year end.
This, despite the global recession. Abu Dhabi tries to stay afloat by building its deluxe real estate portfolio to the tune of $208 B. Leading real estate and development experts expressed strong confidence in the continued growth of the Abu Dhabi property sector based on stable and genuine market demand rather than speculation.
In the run-up to CityScape Abu Dhabi next month, experts hold high hopes with the state. “The global economic crisis has cast a shadow over the real estate industry, changing market dynamics and growth prospects,” said Rohan Marwaha, Managing Director of Cityscape.
Similarly, with the mall and retail property aspect of Abu Dhabi, Charles Acworth, Director Research and Head of Commercial Leasing for Aldar, described Abu Dhabi as becoming the location of choice in the Middle East for retailers. As an example of the growth potential of the Abu Dhabi mall market, he said that at weekends up to 30 percent of vehicles in the car parks of two major malls in Dubai were from Abu Dhabi. Acworth remains confident about both the hotel and residential sectors. Though some reworking was taking place, there was still an undersupply of residential property for end-user occupiers. He saw that need extending for five years or more.
On the residential market, Gurit Singh, Chief Property Development Officer of Sorouh, said stability should return to the rental market in three to four quarters from now, dependent on developers delivering new properties currently under construction.
Adel Zarouni, Managing Director of Burooj Properties, said overall growth in the Abu Dhabi property market was based on genuine demand rather than being based on speculation.
Common challenges identified were the need to find financing for new developments and laws to cover both investors and developers. “Islamic or Shariah-based financing in the current market may be more preferable,” said Scott Aitken, Legal Consultant with Clyde & Co.
Perhaps Shariah is the way to go these days when raising any conceivable amount. Looking at the almost recession-proof model Saudi Arabia’s economy currently enjoys, Shariah-based financing takes much of the credit.
By end of October 2008, while most funds have dried out worldwide, an estimated $1.3 trillion in liquidity existed to be tapped by institutional banks, insurance companies, exchanges, asset management companies and other financial product offerers, said Dr. Saiful Azhar Rosly, director of Eon Capital Islamic Bank.
Furthermore, Abu Dhabi’s tourism portfolio remains bullish despite the economic hardship. His Highness Sheikh Sultan bin Tahnoon al Nahyan, chairman of the Abu Dhabi Tourism Authority stands ready to move his projects from the drawing board to a vision for tourism development at a controlled pace. He remains focused on developing Abu Dhabi’s cultural heart, focusing on the cultural district of Sa’adiyat Island, which he describes as the biggest complex of its kind in the world, while adding, there is a cultural gap between the region and other regions of the world of which he hopes to bridge with this brand new development. Sa’adiyat is a large, low lying island some 500 meters off the coast of Abu Dhabi. Budgeted at $27 B, it houses commercial, residential and leisure facilities to be completed in 2018. It will feature contemporary art museums such as the Guggenheim and the Louvre, enriching the experience of visitors as well as the minds of the local population.
On the sustainability front, Abu Dhabi is a providing a global role model with the UK architectural firm Foster and Partners master planning the world's first zero carbon city. Known as Masdar City, the pioneering development has begun construction and will eventually house 40,000 people with no greenhouse gas emissions and no waste. "Though developing business tourism is expected to support Abu Dhabi during the financial downturn, the emirate is pressing on with dramatic cultural attractions for the longer term," said Marwaha. "Saadiyat Island’s cultural district is on track to be completed on time, with construction of the Louvre, Guggenheim and Sheikh Zayed National museums scheduled to start this year, with no delays expected in their progress."
Sheikh Sultan’s Desert Islands project centers on eight islands around the existing Bani Yas nature reserve. It was initiated by the late ruler Sheikh Zayed al Nahyan. “This will be an eco-tourism destination with a wildlife component that will include efforts to protect marine life such as dugongs and turtles,” said the ruler of UAE’s capital, one of the most modern and economically powerful cities in the world which boomed in the 70s following the discovery of oil.
Plan Abu Dhabi 2030 is premised on the prospects of catalyzing tourism, economic and industrial growth throughout the entire Abu Dhabi. It is expected to influence the growth and development of the other neighboring states within the UAE.
Abu Dhabi is fortunate enough to have 'bloomed' much later than Dubai. It is in a privileged position to avoid the mistakes more matured economies have made in recent years. Abu Dhabi's record shows how an extremely rich but tiny state can do better than its predecessors and/or counterparts. Not only does it contribute the largest to the state budget of the UAE, Abu Dhabi’s population boasts per capital GDP exceeding $70,000. It stands alongside the world’s wealthiest cities, if the list still exists. If not, it is perhaps, the world’s wealthiest capital alongside Riyadh in Saudi Arabia and Brunei Darussalam.
Comments
It is Great that Abu Dhabi has been doing this, it is not new to them,
when you see the comparisons of early seventies and that of now, by crossing
all barriers( amidst many world crisis) the City has developed
into a Sophisticated Modern City now, comparable to the standards of Western Cities.
It was the Vision of Late President
Sheik. Zayed and it is fulfilled by the present Rulers. The Place (Abu Dhabi) with its Tranaquility/Hospitablity/Politness/Cleanliness would definitely has good potential to develop into a Greater Tourist Spot of the World.
The present Rulers has much confidence in doing so, that Abu Dhabi would be
Luxurious Tourist Spot of the World
with its beautiful beaches and trees.
R. Kumaraswamy
Chennai, India
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