Abu Dhabi real estate construction sector - busy days ahead
Until a few years back, Abu Dhabi emirate's construction sector was dominated by Oil & Gas projects and Independent Power and Water (IWPP) schemes.
Though there were few prestigious building projects, the building sector was completely over shadowed by the Oil & Gas and IWPP projects. Major development schemes were announced in the real estate sector, but were delayed or cancelled.
In the year 2004, a breath of fresh air was breathed into the local building construction sector with the formation of Aldar Properties and with the launch of Al Reem Island development scheme. The emergence of Aldar Properties in 2004 was a major milestone in changing the mindset of the local real estate industry. Aldar Properties unveiled their first major development scheme on 5th February 2005 - the estimated Dhs.54 billion Al Raha Development.
A host of other major projects were announced by Aldar during the year, the largest among the lot was the Mina Zayed development which is expected to cost Dhs.55 billion.
The multi-billion Dirham Al Reem Island development is another major scheme, announced in the year 2004 which is expected to take the emirate's building sector to new heights. Al Reem Island development is carried out by three companies - Tamouh Investments, Sorouh Investments and Reem Investments, each responsible for a certain section of the island. The combined projects portfolio of the three developers in the island are understood to exceed Dhs.75 billion.
Sorouh Investments has also made its intention clear to become one of the leading developer in the emirate by announcing projects elsewhere in Abu Dhabi and Al Ain. In a recent development, Lulu Island, a project which was in the government's card since 1993, has been awarded to Sorouh Investments for development.
Abu Dhabi Tourism Authority (ADTA) is expected to play a major role in positioning the emirate as a hot tourist destination. Saadiyat Island which was previously earmarked for development as an offshore financial market and was eventually shelved has been given a fresh impetus by ADTA with the announcement of a Dhs.100 billion development scheme in the island. A public joint stock company called Tourism Development and Investment Company (TDIC) was formed in April 2006 to manage the project.
In addition to the Saadiyat project, ADTA has joined hands with the local Al Jaber Group for a 5 star hotel project in Abu Dhabi, which will be managed by Shangri La Hotels & Resorts. ADTA has a second 5 star hotel, which is also under construction and will be located next door to the Shangri La Hotel. A host of new hotel projects were announced since the beginning of 2006. The major hotel projects announced in the last 6 months include Hyatt Regency by Al Masaood Group, Emirates Pearl Hotel by TDIC and Atlas Group, Hotel at Jebel Naqfa by Sorouh Investments, Luxury Resort in Saadiyat Island by Abu Dhabi National Hotels Company (ADNHC), Park Rotana Hotel by Al Mada Tourism, Holiday Inn by Al Qudra Real Estate and a Luxury Hotel by Al Habtoor Group.
Abu Dhabi emirate's new property ownership laws which were put in place in August 2005 has already raised the interests of new players in the market, who are marching ahead with their own plans. Start-up companies are being launched at regular intervals and other developers from the region have already started moving in to the emirate. With a flurry of activities already on the cards, the coming years is undoubtedly set to place Abu Dhabi on top of the construction activity chart.
The major multi-billion Dirham schemes planned in the emirate of Abu Dhabi include:
Source: Ventures Middle East GCC Projects Database (www.ventures-uk.com)
Construction Contract Awardss
According to Ventures Middle East, a leading management consultancy firm in the region, Abu Dhabi emirate's building construction industry is expected to witness the award of over Dhs.22 billion worth of projects to contractors by the end of the year 2006. This figure is expected to rise to over Dhs.28 billion in 2007 and is expected to hit the Dhs.35 billion mark in 2008..