As Abu Dhabi accelerates efforts to diversify its economy away from a reliance on hydrocarbons, development of Al Maryah Island has become a top priority for real estate and construction. An international financial free zone and mixed-use real estate development, the island is expected to become a major financial and business district, supported by retail development Al Maryah Central, as well as high-end residential and commercial projects.
Although a subdued macroeconomic climate has delayed a number of the island’s projects, a new focus on the creation of open public spaces and promotion of pedestrian traffic will help developers maintain a competitive edge. At the same time, the flagship Abu Dhabi Global Market (ADGM) continues to up its number of registered companies, which will also support development.
The 114-ha Al Maryah Island is located midway between Abu Dhabi’s existing central business district, Al Reem Island, Mina Zayed and the city’s new cultural district on Saadiyat Island. Billed by its developer – Mubadala Investment Company – as central to the Abu Dhabi government’s long-term plans, Al Maryah Island will be rolled out in phases.
Phase one, which was designed and supervised by Atkins, launched in 2008 and involved major preparation and infrastructure construction, including an extensive, multi-tiered road network and four bridges. As reported by Construction Week Online, the island’s development involved an extraordinary feat of engineering – elevating 57 ha of its territory to 14 metres above sea level. Some 400,000 cu metres of concrete was poured onsite for these works, as well as 8000 cu metres of precast concrete for 3700 I-beams, 150,000 sq metres of bridge decking and 1420 30-metre-deep piles.
Phase one also included construction of ADGM Square, which is home to ADGM and serves as the island’s main business district. The square consists of four commercial towers, each between 30 and 36 storeys, including the recently opened Al Sarab and Al Khatem office towers.
A separate trapezium-shaped building houses the offices of ADGM, as well as a terraced atrium and The Galleria luxury shopping mall.
In addition to commercial, retail and residential developments, long-term urban planning priorities are woven into the island’s design, including public transit, walkability and easy access to public spaces. Pedestrian traffic is promoted through features including an encircling promenade that is expected to complement the city’s existing Corniche as a public waterfront space. The 5.4-km promenade offers residents and office workers maximum waterfront access and scenic views. Contract awards for development of new public space on the island are ongoing, and in November 2016 Mubadala announced that it was seeking expressions of interest for a project to extend the promenade.
The development’s second phase will extend activities to the island’s central and southern areas, emphasising mixed-use residential and commercial buildings, community facilities, public spaces and landscaped areas. The third phase will see the northern part of the island developed. Mubadala said that the island will eventually support a working population of 75,000, and over 30,000 residents. A host of residential, retail and commercial developments are under way, including Al Maryah Central, a mid-tier mall connected to La Galleria, as well as Taiwanese developer Farglory’s residential project, Maryah Plaza. Al Maryah Central will bring 260,000 sq metres of new retail space to the emirate, offering connections to Reem Island, Abu Dhabi Island, greater Abu Dhabi and The Galleria Mall, which features a 200-room, five-star hotel with 150 apartments and a 225-unit residential tower. It will also be within walking distance of the Rosewood and Four Seasons hotels, ADGM and residential towers. The $1bn project is scheduled for completion in August 2018, offering more than 400 brands, as well as 100 food and beverage outlets, 9290 sq metres of green open space divided into five public parks, and – in a first for the emirate – the Macy’s and Bloomingdale’s department store brands.In September 2016 Gulf Related, the mall’s developer, announced that it had already leased 50% of the retail space on offer at the development, after securing 72,900 sq metres of commercial commitments from major UAE retailers.
“Al Maryah Central is a lot more about location with great connectivity right in the centre of everything,” Kevin Ryan, managing director and COO of Gulf Related, told OBG. “The positioning is also really about The Galleria and Al Maryah Central together, playing off of one another for a destination. The Galleria will be more like a luxury zone within a larger retail establishment.” In keeping with emerging trends, the mall will also offer two recreational attractions, Family World and Sports World, as well as a cinema, public library and health club. The mall is set to play the role of community centre, with Gulf Related focusing on the creation of public spaces, including a public library.
Available at a lower price point than high-end tourist attractions, these features could also help the mall attract new footfall in an increasingly crowded and competitive retail market – an important priority for all Al Maryah stakeholders.
Farglory announced in September 2016 that it plans to resume work on its high-end residential project. Although Farglory plans to offer more studio, one-bedroom and two-bedroom units, sales could still be challenging, with local property brokers reporting that average apartment prices in Abu Dhabi were around Dh1600 ($436) per sq foot in late 2016, with prime properties reaching a maximum price of Dh2000 ($545) per sq foot.
Originally launched in 2010 with a proposed price point of Dh3750 ($1021) per sq foot, the Farglory residential project broke ground in 2013 after redesigns brought this down to Dh3000 ($817) per sq foot. The latest redesign should bring prices to Dh2500 ($681) per sq foot in an effort to maintain profitability against subdued market conditions and rising oversupply of high-end space.
Commercial development also picked up on the island in 2016. In May MPM Properties, Abu Dhabi Islamic Bank’s real estate advisory subsidiary, reported that Al Maryah Island was bucking the general office market trend, with ADGM releasing 98,000 sq metres of grade-A space during the first quarter of 2016 through its Al Sarab and Al Khatem office towers.
Although rising oversupply and subdued market conditions could also weigh on future real estate growth, Al Maryah’s commercial pipeline is looking more promising as a result of a planned government investment, while recent private sector announcements indicate the market is set to become a worthy complement to the neighbouring Dubai International Financial Centre, Qatar Financial Centre in Doha and Saudi Arabia’s King Abdullah Financial District.
In July 2016 ADGM and the Abu Dhabi Securities Exchange announced that they were undertaking feasibility studies for the establishment of a new financial exchange on Al Maryah Island, signing a memorandum of understanding which seeks to foster bilateral cooperation and support financial services sector growth.
Financial Services Expansion
Although ADGM’s initial strategy has been to focus primarily on private banking and wealth and asset management, it is permitted to expand its activities across the financial services spectrum, including securities trading. It also licenses non-financial institutions.
Private sector confidence in the market’s long-term growth prospects continues to improve even further, and in October 2016 PwC announced that it is planning to increase its ADGM employee numbers by two-thirds after moving its personnel into two floors of the Al Khatem Tower.
The company also has a number of staff at Al Sila Tower, with 300 people employed in total at the market. According to PwC’s international chairman, Robert Moritz, the move and expansion plan is “very much a vote of confidence” in ADGM’s growth prospects. In addition, 2016 witnessed large-scale players like Aberdeen Asset Management and Macquarie Capital set up shop in the financial free zone.
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