Dhabi now has half-a-dozen real estate
companies, all formed within the past two years,
that are spearheading the transformation of the
capital into a modern Arabian metropolis.
To some extent time stood still in the previous decade with a moratorium on construction. This created pent-up demand and put upward pressure on rentals which has only become more acute with the oil boom of the 2000s. The change of leadership was the catalyst that led to a change of policy and the creation of the new real estate companies as investment vehicles.
It is no surprise that Abu Dhabi's new property companies have studied the experience of neighboring Dubai, both to learn best practice and hopefully how to do things better. Dubai legalized freehold ownership for foreigners three years ago, although its main property companies date from the late 1990s.
plus for Abu Dhabi has been the immediate
clarification of the legal position regarding
ownership for foreigners and nationals well in
advance of starting construction projects. There
are 99-year leases for expatriates and freehold
In terms of the phased release of projects, this has followed the Dubai pattern with demand generally greatly exceeding the supply of property on the day. This has created market awareness and a feeling that some property may be under priced.
Abu Dhabi has also gone for very large development projects from Day One just like Dubai. This is partly a matter of prestige but there is the danger that Abu Dhabi might suffer the time and cost over-runs which are typical of large construction projects all over the world and which buyers have found annoying in Dubai.
It is to be hoped that the development companies will learn from this particular experience and plan accordingly. Certainly senior managers who talked to AME Info had this matter uppermost in their minds and have engaged some of the world's finest construction managers, so it may be different in Abu Dhabi.
This leads to the issue of quality of construction which is a part of the same problem. Building large projects can lead to a skimping on quality. But this does not have to be the case. Visit the Emirates Palace Hotel in Abu Dhabi to see a building of awesome quality of finish and it only opened a year ago.
Perhaps where Dubai can best show Abu Dhabi a
lesson is in marketing and public relations. The
Dubai property companies have done a superb job
in getting their message reported around the
globe on television, the Internet, newspapers
and magazines thanks mainly to the excellence of
the media sector in Dubai.