Capital appreciation

zoom

ADCCI predicts that real estate investment in the capital will reach us$205bn between now and 2012.

zoom

The multi-billion Yas Island project in Abu Dhabi.

Abu Dhabi's property market is hotter than the Gulf's August waters and prices are set to keep soaring amid spiralling demand and supply shortages.

Sometimes it's hard to visualise a market. You can see cranes going up, read up on facts and figures and hear all about supply and demand dynamics, but these factors in themselves do not always paint an accurate commercial picture.

Anyone visiting the first morning of the recent Cityscape Abu Dhabi exhibition, however, would have been in no doubt about the UAE capital's real estate appeal, both physically and economically.

The Abu Dhabi National Exhibition Centre united both entities, with queues of investment-minded people snaking round busy stands, providing first-hand evidence of the city's growing allure.

By the end of the four-day show - it was extended a day due to high demand - the deals totalled a near-stratospheric US$36bn, but this figure almost pales into insignificance when you leaf through a new 50-page report from the Abu Dhabi Chamber of Commerce and Industry, which predicts that investment in construction and real estate will hit US$205bn between now and 2012.

No prizes for guessing what's fuelling the boom; the UAE capital is earning around US$375m a day from oil revenues.

As with Dubai and Qatar, while Abu Dhabi's visionary wheels are in full motion, underpinned by its Plan Abu Dhabi 2030 masterplan, meeting existing and upcoming demand will continue to tax developers' minds.

Abu Dhabi's population is set to rise from 930,000 in 2007 to 1.3 million in 2013 and 2 million in 2020.

The latest in a long line of market reports, from EFG-Hermes, predicts a 20-25% rise in Abu Dhabi's residential rents by the end of this year and 15-20% increase next year.

Research analyst Sama Kapadia said a rapid escalation in construction costs in the last six months has contributed to higher residential property prices.

"Developers are also adopting more of a phased strategy to their projects and are bringing property to the market later, by which time land prices and the selling price have gone up even further."

Colliers International found that house prices in Abu Dhabi have jumped by 53% over the past year to US$580 per square foot, compared with an 18% price hike in the previous 12 months - and it believes the continued shortage of accommodation could push this rate higher in the next few months. Only 27,000 units are expected to be delivered by 2010, compared with a demand of more than 100,000.

Print | Email | Discuss this article |

USER COMMENTS (0 COMMENTS)

POST A COMMENT

CLICK HERE TO POST A COMMENT

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Security Code *
Please click post only once - your comment will not be published immediately.