Abu Dhabi's genuine property demand will fuel construction

by This email address is being protected from spam bots, you need Javascript enabled to view it on Saturday, 14 March 2009

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The Al Dana section of the Al Raha Beach development, an Abu Dhabi mega-project.

Burooj Properties managing director Adel Zarouni said that the Abu Dhabi property sector would continue to grow because the market "was based on genuine demand, rather than being based on speculation."

The comments were made at the first Cityscape Connect business breakfast, held in Abu Dhabi, ahead of April's Cityscape Abu Dhabi exhibition.

The continuation of genuine demand would spell good news for a construction industry that has been stung by rampant speculation in other areas of the GCC, which can result in falling rents and a shortage of end-users.

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Common challenges identified at the breakfast were the need to find finance 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 Clyde & Co legal consultant Scott Aitken.

Aitken's comments tie in with those of Pinsent Masons partner Sachin Kerur who told Construction Week that the lending criteria of Islamic Banks was having a positive impact on the construction industry.

"It's to do with the more stringent nature of Islamic lending," Kerur said. "People may look to adopt those sorts of structures for safe lending in the future."

Looking beyond the next 12 months, Abu Dhabi has a host of projects and mega-projects underway including the US $27 billion (AED100 billion) Saadiyat Island, the $22 billion Masdar City, the $15.8 billion Al Raha Beach and the $11.7 billion Das Islands.