By Annika Vaughan
Abu Dhabi is going all out in its quest for property supremacy with its billion-dollar projects all set to entice business and tourism.
Abu Dhabi, the well-established capital of the UAE has long been considered as one of the wealthiest emirates in the GCC. The home to almost 420,000 citizens, Abu Dhabi the largest emirate in the UAE, and owns 10% of the planet's oil and has the highest per capita GDP in the world (recorded US$54,000 in 2006). Despite its enormous wealth and with almost US$1 trillion investments abroad, Abu Dhabi has been perceived as a bit of a laggard when it comes to developing attractive projects (apart from a few malls, hotels and infrastructure developments) - but this old story doesn't seem to apply to Abu Dhabi any longer. Abu Dhabi is really getting "hot"!
Abu Dhabi - suddenly in the international scene
Since the legislation changed in 2005 to permit foreign investors to purchase "99 years leasehold" of properties, Abu Dhabi property market is suddenly seeing a flurry of activities.
To support this is Abu Dhabi's new strategy to transform the city into one of the region's foremost financial and cultural centres. Its effort is just "phenomenal" in both scale and quality.
In October 2006, the Abu Dhabi government announced its intention to invest more than US$175bn in tourism, energy and infrastructure by 2012.
Following this announcement in late 2006, Abu Dhabi made it public to house the only Guggenheim museum in the region - which at 30,000 sq m will be larger than any existing Guggenheim in the world. When the government signed a 30 year licensing deal with Louvre Museum in Paris, to build first museum to carry the Louvre name outside France in March, this €US$955.7m deal (€US$546m of which are for "Louvre" brand) was perceived with positive surprise by many who did not necessarily anticipate Abu Dhabi to be this committed to "develop" its city and obtain international attention. Moreover the rule of thumb "money brings in more money " proved to be valid. In 2006, Abu Dhabi won a phenomenal US$4bn in foreign direct investment.
All of these actions taken by the Abu Dhabi government have been welcomed by both local and international investors and developers. Abu Dhabi's game plan of stealing the pie that Dubai has been exclusively enjoyed, seems to be working very well. Already, there's so much going on in the market.
Mind-blowing projects in pipeline
The key driver of Abu Dhabi's exponential growth and investment is, of course, the real estate sector. Triggered by an introduction of foreign leasehold system, some mind-blowing scale projects have been launched. Like in Dubai, Abu Dhabi has three major players competing with each other to form an attractive market. These three, ALDAR Properties, Sorouh Real Estate and Al Reem Investments have all been embarked on multibillion developments after securing lands from the government. Their portfolio is very impressive and certainly make us believe that Abu Dhabi's future looks bright.
ALDAR - creating serious dream lands
Of those three, ALDAR was the first private property development company to be established in Abu Dhabi. In less than three years, ALDAR has achieved to secure a staggering US$147.71bn portfolio led by Al Raha Beach Development, the Al Gurm Resort and many other key projects.
One of the major new developments ALDAR has announced is the Yas Island. This US$40bn project off the coast of Abu Dhabi features leisure attractions; such a world class motor sports racetrack, signature hotels and the Ferrari theme park. ALDAR has retained rights to operate this theme park from Ferrari and is planning to open theatre and museum in the same facility. All the attractions will be linked to top quality motor race track on which visitors can experience exciting Ferrari Driving School (Pilota Ferrari and Abu Dhabi owns 5% of Ferrari through Mubadala - its international investment arm).
As Abu Dhabi has recently signed nine-year contract to host a Formula One Grand Prix in the city, this course is anticipated to attract a large number of visitors from 2009.
Moreover, a staggering 300,000 sq m retail area will be built to add "shopping" as part of the entertainment experience.
Al Raha and Al Gurm
Another mega project from Aldar is the US$14bn Al Raha Beach project. Situated in the suburbs of Abu Dhabi, this 5.2 million sq m water city is designed to accommodate a population of 120,000 in some of the most spectacular buildings, marinas and water features seen in the UAE. The development constitutes of eight residential and commercial districts, each with their own distinct character, including 60-storey towers to low-rise buildings. The construction work has started and it is anticipated to complete in 2019. Very recently, ALDAR announced a launch of another residential development project right next to this (to be more precise, across the motorway) called "Al Raha Garden". Although, Al Raha Beach project is open for all nationalities to purchase 99 years leasehold, Al Raha "Garden" is only open for the UAE and GCC nationals.
Another very unique residential resort project is the "Al Gurm Resort". Scheduled to open by the end of the 1st quarter of 2009, this is an exclusive tropical island and spa complex fringed by emerald green mangrove forests. A Thai based luxury spa brand ‘Banyan Tree' has been retained to manage the resort. Interestingly, a trendy "eco-tourism" philosophy was employed in conceptualising the resort. Reflecting this, the island is also going to be a home for over 60 species of bird life.
In the complex, over 70 private suites will be built around a lagoon and 158 exclusive islands chalets will surround them. The project also includes building health clubs, boutiques and restaurants offering fine cuisine. A signature seafood restaurant, only accessible by boat, will be open in this complex, too. This project will allow both tourists and residents to experience "tropical island in the desert".
Reem Island - Creating the second Abu Dhabi
Because Abu Dhabi is a natural island, mega projects here tend to take place on islands and waterfront as well. Another of this kind is the "Reem island", however, this is not an ordinary waterfront project; this 633 hectare island is located 300 metres offshore and will be linked to Abu Dhabi by two bridges. The project is one of the largest in the region and is expected to accommodate approximately 100,000 people.
Three master developments are planned to take place here. Principal developer is Tamouh Investments, who owns 60% of the island; the company is developing Marina Square on this island. Other two developers Sorouh and Al Reem Investments share the remaining 40% equally (20% each). Both of them have launched extraordinary projects, "Shams Abu Dhabi" (Sorouh) and "Najmat Abu Dhabi" (Al Reem Investment).
Shams Abu Dhabi
Shams Abu Dhabi from Sorouh means "the Sun" in Arabic and it covers 20% of Al Reem Island, (almost 134.6 hectares). The project includes iconic developments such as Sky Tower, The Gate and Central Park. This is primarily a residential development as 90 % of the area is devoted to residential living environments and only remaining 10 % for the commercial and service sectors. Sorouh has been welcoming other developers to take opportunity in using the remaining space and it aims to create as many as 22,000 residential units. To add green and water to this comfortable urban living zone, a 8.3 hectares central park and 4 km of water canals that run throughout the development, are planned to be built.
The most prestigious development of Shams project is the Sky Tower. This tower is going to have more than 80 storeys and will be the tallest landmark in Abu Dhabi. From the 41st floor, it will feature luxury one to four bedroom apartments and penthouses for which up to 97% finance is available from Sorouh and Amlak. An adjacent 18,000 sq m sports/leisure centre and a community mall with shops and restaurants are planned to be included as well. Indeed, this seems to provide "affordable luxury" to Abu Dhabi residents. The entire project is scheduled for completion by 2011.
Najmat Abu Dhabi
When Sorouh is building a "Sun", Al Reem Investment is constructing a "Star". Another project going on the same island is Najmat Abu Dhabi, (meaning "Star of Abu Dhabi" in Arabic) This project is worth US$8.17bn and is the maiden project of Reem Developers (the real estate arm of Reem Investments). The development includes three marinas - Bay Centre Marina (250m diameter), Residential Marina (200m diameter) and Resort Marina (180 m diameter). All of these will be linked by a canal which traverses the spine of the sprawling development from northwest to southeast. The largest of the three, The Bay Centre Marina will serve as a business, entertainment and retail hub of the development.