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For the first time in years, Cityscape Abu Dhabi is witnessing a double-digit increase in participation from local and international exhibitors. The growth figures are a strong indicator of the current positive sentiment that exists in the real estate sector in Abu Dhabi and the region.
Buoyed by government initiatives such as a $100-billion (Dh367.31 billion) investment in housing and infrastructure and a move to allow foreign investors to own freehold property, Abu Dhabi is making strong progress after being bogged down by the global recession in 2008.
Wouter Molman, Director of Cityscape Group at Informa Exhibitions, the organiser of Cityscape Abu Dhabi, shares his thoughts on the resurging property market and this year's edition of Abu Dhabi's biggest real estate show.
• Tell us about this year's Cityscape Abu Dhabi.
- Last year Cityscape Abu Dhabi attracted more than 15,000 participants and early indications are that we will see a double-digit increase in visitors this year to match the growth of the show, which has grown by 10-20 per cent.
Pre-registered visitor numbers had grown by 26 per cent year-on-year some five weeks before the opening day, signifying the largest number since 2010.
So we are certainly very pleased with the growth this year and look forward to a hugely successful eighth edition of the event.
• Who are the major exhibitors this year?
- There will be more than 120 exhibitors from countries far and wide, including Egypt, Turkey, Oman, Kuwait, India, Russia, the UK, the US and Qatar, covering four halls and more than 15,000 sq m of exhibition space.
Turkey will have the largest representation from the international countries taking part, with at least ten developers showcasing their latest projects and developments, including Torunlar, Bakyapi, FCC and Viatrans.
Major local developers will take centre stage as well, including Aldar, Mubadala, the Urban Planning Council, Al Maabar, Manazel, Wahat Al Zaweya, Bloom and Eshraq, while new exhibitors or those participating after a year or two away include Masdar, Tamouh, Baniyas, Farglory, Flash Properties and Hydra Properties.
• Is there anything new to expect this year?
- As with all our Cityscape events, we expect several developers to announce new property development launches coinciding with their participation at Cityscape Abu Dhabi. They are typically tight-lipped beforehand, but all will be revealed in due course.
Aside from thousands of properties on show in Abu Dhabi and across the world, other highlights at Cityscape Abu Dhabi include the Abu Dhabi Market Overview Conference on the opening day, hosted in collaboration with JLL and supported by Masdar City.
The half-day conference will put a spotlight on Abu Dhabi's latest project development updates from the emirate's largest developers, while a dedicated panel discussion with industry experts will outline the way forward for the emirate's property market.
Meanwhile, today's VIP Networking Reception in association the Royal Institution of Chartered Surveyors will also provide a platform for influential decision makers, international investors, developers, architects, designers and consultants to meet, exchange ideas and share development updates in a relaxed and informal setting.
• Tell us more about the Abu Dhabi Market Overview conference.
- The Abu Dhabi Market Overview will coincide with the release of JLL's Q1 2014 Abu Dhabi Real Estate Market Overview, so we expect that the more than 200 delegates will be filled in with the most up-to-date information and details about the UAE capital's property market.
The high-profile line-up of leading experts taking part in the one-day conference include David Dudley, Regional Director and Head of Abu Dhabi Office at JLL, Gurjit Singh, Chief Development Officer of Aldar Properties, Alex Thursby, CEO of the National Bank of Abu Dhabi, Faris Mansour, Director of Mubadala Pramerica Real Estate Investors, Anthony Mallows, Director of Masdar City, and Masood Al Awar, CEO of Tasweek Real Estate Development.
• What's driving the growth of Abu Dhabi's property market?
- There has been a lot of activity in Abu Dhabi's property market in the past year, with plenty more in the pipeline over the coming years as well. The Abu Dhabi government's $100 billion investment in housing, schools, transport and other projects will transform the emirate into an integrated, cosmopolitan global city.
As such, Abu Dhabi's residential, retail, hospitality and office sectors are all showing positive signs. According to JLL's Q4 2013 Abu Dhabi Real Estate Market Overview, there are currently 218,000 residential units in the UAE capital, with 11,000 of these delivered last year. This year, some 20,000 units are expected to be delivered, with new projects mainly located in Reem Island, Saadiyat Island, Danet and Rawdhat.
On the back of increased consumer spending and a surge in tourism, the retail sector is also starting to finally mature in Abu Dhabi. There is currently about 2 million sq m of retail space in Abu Dhabi, with the new World Trade Centre Mall and the Eastern Mangroves Promenade among the major deliveries coming to market last year. The Yas Mall, the Capital Mall and the Nation Towers will be the headline openings this year.
A 40 per cent increase in tourists to Abu Dhabi last year (for a total of 2.8 million visitors) has certainly put its hospitality sector on the map, and this is reflected in the surge of new hotels popping up all over the emirate. Abu Dhabi currently has 18,500 hotel rooms, with the Capital Centre Arjaan by Rotana, Novotel and Adagio in Bustan Complex all expected to open this year.
• How can Abu Dhabi sustain this recent growth?
- The Abu Dhabi government has a key role to sustain this growth. Its economy is heavily dependent on oil which accounts for about 50 per cent of its GDP and the bulk of fiscal and external revenues.
Its huge oil sector creates wealth but does not lure many of the foreign professionals who can be expected to buy homes in the emirate. Abu Dhabi's sustainable growth ultimately depends on government initiatives to diversify its economy and generate sustainable employment in the private sector, such as banking and tourism.
• What are the main obstacles for property Investors in Abu Dhabi?
- Traditionally, foreign investors have only been limited to 99-year leases in designated investment zones across Abu Dhabi. In a bid to attract more investors to its real estate sector, Abu Dhabi Municipality announced in January that foreign investors can now own property in Abu Dhabi on a freehold basis in these zones.
Some of the recent regulatory updates include the mortgage lending regulations issued by the UAE Central Bank, as well as the removal of the rental cap in Abu Dhabi, which will ensure landlords can safeguard their property as an income generating asset that is more in line with market rates.
Another update includes Abu Dhabi government's decision to limit housing allowances to employees living in Abu Dhabi, affecting an estimated 20,000 people. The incentive reportedly caused an increase in demand for residential property in Abu Dhabi, although specific figures are not available.
• What real estate improvements can we expect to see over the next five years?
- There has been speculation in the market about further extensive regulatory updates in Abu Dhabi, although the timing and content of which are yet to be announced.
The ongoing recovery in Abu Dhabi's real estate market is expected to continue, although in the short term it will be limited to prime real estate, with the residential sector leading the way.
• What are the major differences between the property markets in Dubai and Abu Dhabi?
- While both markets have followed comparable growth, decline and recovery patterns over the past decade, Dubai and Abu Dhabi are in different phases of recovery today. Dubai is experiencing a fast, market-wide recovery, while in Abu Dhabi the market growth is limited to prime properties, with secondary properties being largely stable or still recording minor decline.
Moreover, both markets are driven by distinct fundamentals, investor sentiment and demographics, economic sectors and laws governing the markets' recovery.
• How will the World Expo 2020 in Dubai impact Abu Dhabi?
- In the short term, Dubai's Expo 2020 bid has improved the investor sentiment in Abu Dhabi. The Dubai Expo is expected to create 277,000 jobs and will attract some 25 million visitors, so certainly Abu Dhabi will feel the positive effects from that leading up to the event. It is too early, however, to predict the exact impact on Abu Dhabi's real estate market.
• What are the kay driving factors for Abu Dhabi's property market?
- At the moment it’s the government investments and regulatory updates that are driving the emirate's real estate market. In the long term, these government investments should facilitate a sound foundation for private businesses and enterprises, which can then take the property market forward.
Source: Syed Ameen Kader, Special to Property Weekly, gulfnews.com