Cityscape Abu Dhabi reveals opportunities in a softening market
There were of course announcements, with several major UAE-based developers showcasing their key developments, such as Sorouh Real Estate’s launch of its retail property brand Boutik.
The Abu Dhabi-based developer will open its first Boutik branded space in Sun and Sky Towers on Al Reem Island in June this year, hosting the first ever Waitrose supermarket in the UAE capital. In the second half of the year, Sorouh will also open its shopping mall, Boutik Al Ain, home to a Carrefour hypermarket.
Baniyas Investment and Development Company (BIDC) showcased its Bawabat Al Sharq project, in Bani Yas city and many other developers were on hand to reveal their latest projects in the UAE capital.
So as the annual barometer for the Abu Dhabi and wider GCC real estate market, the show certainly seemed to be more upbeat; associate director for Cluttons in the Middle East, Paula Walshe confirming to AMEinfo that the show had been “very positive and successful”.
“We had a lot of interest in our work in the City and the region from a variety of potential clients,” she asserted.
“The show was very upbeat and footfall pretty good throughout the four days – it certainly felt stronger than in previous years. Enquiries were of a serious nature and the quality of the exhibitors and visitors was very good.”
And Walshe claimed the softening of the capital’s rental market was making Abu Dhabi a more attractive location for both residential and commercial tenants as rents fall and the city becomes more affordable.
“The new stock entering the market is also giving greater choice and quality to tenants and encouraging companies and individuals to upgrade from their current accommodation,” she asserted.
Growth opportunities in niche markets
However, Emile Habib, managing director of property developer Gulf Related, suggested that as demand still has yet to catch up with supply in the emirate, niche markets still exist that could offer unique growth opportunities for property developers to satisfy the needs of more discerning tenants and buyers.
“There are always opportunities to define a niche market for property developers,” said Habib, who spoke at the Middle East Real Estate Summit that ran alongside Cityscape Abu Dhabi at the Abu Dhabi National Exhibition Centre.
“In Abu Dhabi, buyers are looking for quality; they are looking for location, accessibility to highways, schools, to shopping, and new products that we are beginning to see are mixed use developments such as the ones on Reem Island and the Corniche. If developers build a property ideally located that is different from what we have on the market today, there is potential for growth in the residential sector.”
A further boon to the real estate sector were the announcements made by Abu Dhabi Executive Council at the beginning of 2012 of new multi-billion infrastructure projects going ahead in the UAE capital.
The Executive Council’s reaffirmation of the government’s commitment to the 2030 Vision was welcomed, and while Habib acknowledged that in the residential sector, supply still needed to be absorbed by demand, the retail sector in Abu Dhabi was still undersupplied, with a differentiated product again being the unique selling point.
“Retail in Abu Dhabi is currently undersupplied compared to Dubai,” he added. “A lot of retailers that are in Dubai want to set up in Abu Dhabi, but due to the lack of available space in the current market, retailers have no place to go.”
Concerning the suggested lack of retail in many Abu Dhabi developments, Walshe agreed with Habib, but welcomed new projects that are about to come to fruition.
“We understand that some of the retail units particularly on Al Reem are scheduled to open within the next few weeks,” she explained.
“In addition the development of Yas and Central Mall will give residential areas of Al Raha, Khalifa and MBZ far better choice of retail options as well as the convenience of not having to travel to the city malls. Malls such as Dalma and Bawabat Al Sharq are also filling up and we hope to see the successful launch of the Sowwah Square retail phase and Etihad Towers boutique retail mall later this year.”
But for Walshe the big opportunity for residential and retail developers in the UAE is Al Ain.
“Al Ain seems to be attracting serious interest at the moment – particularly from residential developers and several new retail schemes are underway,” she said. “The northern emirates are still under-represented in the retail market with the RAK Mall opening recently.”