Real Estate & Construction
From The Report: Abu Dhabi 2015
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The real estate sector in Abu Dhabi is currently in a period of growth and rising prices, following the global financial crisis that began in 2008. As of the third quarter of 2014, all segments of the market were in simultaneous recovery for the first time since the downturn. The government is set to continue promoting market stability, maintaining its high level of involvement in real estate investment development while growing demand, coupled with tight supply in some areas, suggests that overall prices will continue to rise across most market segments in 2015. Meanwhile the emirate’s construction industry appears to be entering a period of renewed growth, with the total value of construction projects under way or in the pipeline standing at $727bn as of April 2014, making the UAE the second-largest construction market in the GCC.

This chapter contains interviews with Saeed Al Ghafli, Chairman, Department of Municipal Affairs; and Mohammed Al Mubarak, CEO, Aldar.

Articles from this Chapter

Overview

Growing demand and tight supply seem likely to continue over the next few years
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The real estate sector in Abu Dhabi is currently in a period of growth and rising prices, after a downturn following the global financial crisis that began in 2008. According to a real estate market overview for the emirate by Jones Lang LaSalle (JLL), the third quarter of 2014 saw all segments simultaneously in recovery for the first time since 2008. The firm reported that the office, hotel and retail segments were all in the early stages of a period of accelerating growth in late 2014, while rents…

Interview

Maintaining a top spot: OBG talks to Saeed Al Ghafli, Chairman, Department of Municipal Affairs
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Interview:Saeed Al Ghafli How do you respond to those calling for greater uniformity amongst government institutions with regards to public tender processes? SAEED AL GHAFLI: I agree that fair and systematic procedures for tendering and procurement are essential for good financial management in government institutions, and this is what we in Abu Dhabi consider to be a basic element of good governance. We always look for an efficient and robust public tendering process that will ensure value…

Interview

Mohammed Al Mubarak, CEO, Aldar: Interview
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Interview:Mohammed Al Mubarak Are developers now looking to restart schemes that were placed on hold after the market downturn? MOHAMMED AL MUBARAK: The slowdown afforded Abu Dhabi the time it needed for the market to catch up with customer needs. Dialogue between regulators, master developers and key stakeholders helped formulate policy to create a suitable market structure that allows for positive economic gains and provides greater protection to end users and investors. We anticipate further…

Analysis

The upturn is being sustained by a profusion of upcoming projects
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The residential segment was the first in Abu Dhabi’s real estate market to experience recovery from the sustained post-2008 downturn. Prices in the segment have been rising since the end of 2012, when, according to Jones Lang LaSalle (JLL) data, asking prices for residential units in investment zones (areas where expatriates are allowed to buy apartments) in the emirate bottomed out at Dh10,200 ($2776) per sq metre, down from Dh17,500 ($4764) per sq metre in late 2009. By the fourth quarter of…

Overview

The upturn is being sustained by a profusion of upcoming projects
OBG
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As of April 2014, the total value of construction projects under way or in the pipeline in the UAE stood at $727bn, according to estimates from the Middle East Economic Digest (MEED), making the country the second-largest construction market in the GCC. Some 36% of this amount was made up of mixed-use developments, followed by residential (33%) and commercial (11%). Companies operating in Abu Dhabi are set to benefit from a project pipeline replete with opportunities across a range of sectors in…

Analysis

Centralisation of the process may bring short-term challenges, but the change is set to improve efficiency over the longer term
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Known as Musanada (meaning “support” or “assistance”), the Abu Dhabi General Services Company is charged with providing assistance and support services for all government departments, agencies and entities, as decided by the Abu Dhabi Executive Council. Established in 2007 to provide a variety of support services, including procurement, to Abu Dhabi government entities, Musanada’s responsibilities include acting as a tendering body for public construction and infrastructure contracts. The…

Analysis

The large number of projects in the pipeline augurs well for the segment
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The engineering, procurement and construction (EPC) segment in Abu Dhabi is dominated by oil and gas. The largest EPC project currently under way in the emirate is the development of the offshore Upper Zakum oilfield, which was awarded to Petrofac Emirates – a joint venture between Petrofac and Abu Dhabi government investment firm Mubadala Development Company – and its partner, Daewoo Shipbuilding and Marine Engineering, for $3.8bn in April 2013. The project covers EPC, transportation and commissioning…