The stage is set for Abu Dhabi to shake things up in the property sector with its billion-dollar developments.
How many places can you say, ‘I want world-class hospitals, universities and museums,' and boom, the Sorbonne, Cleveland Clinic, Guggenheim and Louvre are on the way?" observes HE Khaldoon Khalifa al Mubarak, CEO of Mubadala Development, the Abu Dhabi government's investment arm.
Indeed, Abu Dhabi is fast asserting itself as a serious global contender in many fields. In October 2006, the government announced that it was investing more than US$175bn in tourism, energy and infrastructure by 2012. However and unsurprisingly for this part of the world, most of the emirate's growth is being propelled by the booming real estate sector.
"With an estimated US$270bn in construction projects either planned or underway, Abu Dhabi has the financial muscle to attract regional and international investors looking for access to some of the most ambitious projects in the world," commented Mark Goodchild, project manager, Cityscape Abu Dhabi.
In recognition of both the scale and the quality of the real estate projects taking place, Abu Dhabi will be staging its own Cityscape Exhibition (the world's largest international B2B real estate event) which debuts at the Abu Dhabi Exhibition Centre on May 8-10, 2007. The forthcoming success of the event is already being realised - 80% of exhibition space has been confirmed with Cityscape officials confident of a total sell-out.
In all, Cityscape Abu Dhabi is expecting more than 200 exhibitors from over 50 different countries, covering a total of 25,000 sq m. In addition, two parallel conferences will run alongside the exhibition, one focusing on Waterfront Developments and the other on Real Estate Finance. Another highlight is the Cityscape Real Estate Awards - ‘Excellence in Real Estate Investment And Development'.
Although considered six years behind its Dubai rivals in the UAE domestic market, with US$100bn of projects currently underway, Abu Dhabi is finally launching its own assault on the dynamic Middle East property market.
To date, Abu Dhabi projects have been concentrated in the hands of six major local heavyweights - Sorouh Real Estate, Aldar Properties, Al Qudra Holdings, Tamouh Investments, Al Rayan Investments and Hydra Properties - who are responsible for in excess of US$100bn worth of real estate projects.
The US$100bn plus includes the US$40bn Yas Island, the US$27bn Saadiyat Island, the US$18bn Al Raha Beach, the US$9bn Danet Abu Dhabi, the US$8bn Al Reem Island, the US$3bn Shams Abu Dhabi and the US$2bn Capital Centre.
The most high profile of these are the US$40bn Yas Island on which construction began earlier this year. Occupying a total land area of 2500 hectares, Yas Island is a mixed-use development featuring such world-class attractions as a motor sports racetrack and a Ferrari theme park. The US$27.2bn Saadiyat Island has also generated many headlines.
Unveiled by Abu Dhabi Tourism Authority, the island (half the size of Bermuda) will become the Middle East's largest single natural island development and is due for completion in 2018.
The US$18bn Al Raha Beach is an 8.1 million sq m development that involves the construction of more than 50 high-rise towers and also includes Al Raha Gardens - the first development to be offered to UAE nationals in Abu Dhabi on an ownership basis.
Meanwhile, last month Abu Dhabi's four largest developers Al Qudra Real Estate, Sorouh Real Estate, Aldar Properties and Reem Investments announced a new joint venture known as Al Maabar (‘The Gateway') as a vehicle to expand into the rest of the Gulf, North Africa and Europe.
Although the initial level of capitalisation of Al Maabar is yet to be revealed, already Al Maabar has announced plans to partner with the Moroccan government to build a US$1bn high-end real estate development on the outskirts of Marrakech.
"Our aim is to jointly develop property overseas and to diversify our revenue sources," commented Ahmed Ali Al Sayegh, the newly appointed chairman of Al Maabar and the chairman of Aldar Real Estate.
However, the domestic market in Abu Dhabi shows no signs of flagging and is expected to contribute US$10.9bn to the emirate's GDP this year alone.
While Gulf developers have already made well-publicised investments overseas, they have only been done on an individual basis; the formation of Al Maabar as a joint venture with the specific objective of going global is a major step forward. Furthermore, Al Maabar has stressed that it wants to adopt a slower approach to overseas expansion in order to avoid some of the pitfalls that have dogged other investors, most notably Emaar Properties' US$1bn acquisition of Laing Homes in the US last summer which is now seen as poorly timed given the recent slump in the US housing market.
Similarly to its credit, Abu Dhabi has been careful not to rush headlong into mass development, potentially ruining its natural beauty. Its long-term eco-strategy combined with meticulous planning in developing infrastructure so that the current journey times within the city are minimally affected by construction, is now beginning to pay dividends.
"We have been overwhelmed by the response from key international and regional industry players.
"Abu Dhabi's sustainable promise has caught the imagination of designers, architects and developers and whet the appetite of investors," explained Rohan Marwaha, Group Director, Cityscape.