Construction Week Newsletter

The long awaited move by the government in Abu Dhabi to introduce foreign ownership property rights should be a positive development for the local real estate market.

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By  Sean Cronin Published  August 20, 2005

Is this the beginning of Abu Dhabi’s rise?|~||~||~|The long awaited move by the government in Abu Dhabi to introduce foreign ownership property rights should be a positive development for the local real estate market. That the announcement falls short of the hoped for freehold property law, may not be of huge importance, although that is what the market clearly wanted. The key thing is that the market knows exactly what the deal is from now on, and likewise, foreign investors will be under no illusion when they part with their cash and sign on the dotted line. What investors want is clarity from the outset, rather than vague assurances of impending legislative reform. The decision to grant long leasehold property rights to foreign investors may well mark the beginning of a new chapter in the development of Abu Dhabi — up until now considered very much as an ‘oil and government’ town. The expectation in the market is that this will act as a catalyst for a wave of residential developments in the designated property hot spots around the emirate that have been earmarked for foreign investment. That is why home finance companies are already jostling for position just days after the announcement. But developers will also be asking whether there are enough end users in the market to justify the scale of development envisaged. The vast tourism potential offered by its many offshore islands has yet to be fully unlocked — but that potential has got to be worth thinking about for the foreign investors currently considering acquiring properties in Abu Dhabi. It could also mark the beginning of a new chapter for the UAE construction industry, which as yet remains firmly focused on Dubai. If what we are told is true, and the projects currently on the drawing board in Abu Dhabi do indeed make everything else in the region pale in comparison, then it may not be long before the focus of development activity starts to move westwards. The decision to open up the emerging residential property market to foreign ownership is exactly the sort of trigger that could make that happen. Sean Cronin Editor ||**||

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