Abu Dhabi young guns unveil masterplans set to rival Dubai
Contractors have been awaiting the explosion of Abu Dhabi’s residential development market for the last two years. Now it finally seems to be happening as the emirate’s developers unveil rival masterplans that could yet eclipse its headline-grabbing neighbour. Angela Giuffrida reports.
The long awaited awakening of the Abu Dhabi development market has been the talk of the local construction industry for the last two years.
In that time the market has watched the formation of a small handful of companies, that together will be responsible for billions of dollars in development over the next decade.
Now these firms, which include Sorouh Real Estate, Aldar Properties, Reem Investments and Tamouh Investments,
are finally moving on masterplans that could even eclipse neighbouring Dubai in scale and ambition.
With the value of construction projects to be tendered rising from US $2.3 billion in 2005 to $6.3 billion in 2006, Abu Dhabi is quickly gaining ground in the regional construction industry.
Work is already underway on Aldar’s projects, including the central market redevelopment; the Al-Gurm Resort and Spa, which is being built off Abu Dhabi island, and the $15 billion Al Raha Beach development, which will be home to more than 60 high-rise towers.
The company is also behind the Al Raha Gardens development, a 665,000m2 community project located next to Al Raha Beach in the city.
In total, mixed-use projects comprising residential and commercial buildings account for $10.17 billion of property spend in Abu Dhabi, making it the largest segment of ongoing project development.
The fight to gain a place among the tallest towers in the world is also on: Sorouh Real Estate this week announced plans for the 375m Sky Tower, which will form part of its $2.7 billion Gate project, an eight-tower development at the Al Reem Islands Shams Abu Dhabi project.
Meanwhile, Reem Investments is building towers of up to 80 storeys at its $8 billion Najmat Abu Dhabi project on Al Reem Island. Designs for Sorouh’s proposed Lulu Island development, which will host a range of residential, commercial, health and recreational facilities, were also approved in March.
Major projects are also springing up outside of real estate — contract packages are out to tender for the new runway and the Etihad terminal on the $6.8 million expansion of Abu Dhabi International Airport, while billions of dollars are being invested in developing and diversifying the emirate’s industrial free zones — for which 300km2 of premium land has been set aside.
The construction of the 110m tall Grand Mosque is now well into its second phase, while more than $1 billion a year
is spent on road infrastructure projects by the Abu Dhabi
But such a huge scale of simultaneous development has presented challenges to developers. Regulations may have been relaxed to attract foreign investors, but sourcing the right contractors — particularly as many order books are full — to ensure quality and timely completion of projects, is proving more of an issue.
Developers are being urged to pay careful attention to every rung of the market chain, from management expertise, research, site selection and contractor selection to on-site project management, supervision and long-term maintenance of projects.
“Quality, iconic projects support the drive for excellence that is now the watchword of the Abu Dhabi emirate’s leadership. Poorly designed and built projects, in an increasingly free market, will have an impact far beyond our shores,” said Ahmed Ali Al Sayegh, chairman of Aldar Properties.
“The market will be shaped by the quality of our product and the brand image that results — as well as by the new regulations that will permit expatriates to buy property in such iconic projects.”
In the drive to ensure such targets are met, developers are being more careful about the way they select contractors and are coming up with different ways of attracting the right ones for the job.
For its projects, Sorouh Real Estate is devising a strategy encouraging local and foreign contractors, as well as consortiums made up of local and international players.
Reem Investments, on the other hand, has no plans to directly target foreign companies, unless they are in partnership with local firms.
“We are looking for contractors already based here, or setting up here, and they will be selected according to the specification of each development,” said Ibrahim Belselah, CEO of Reem Investments.
“A lot of local contractors go into joint venture with a foreign company, or a business person builds a relationship with a foreign company and brings them in — but we don’t want to go directly to foreign companies.
“It’s more for practical reasons — we want to promote the economy here for existing companies; usually they’re the experts so we don’t want to take their role away by going directly with foreign companies. There are a lot of good quality, home-grown contractors available in the country,”