|18 April, 2018

Cityscape: UAE developers showcase projects worth $4bln in Abu Dhabi

3-day property exhibition ends on April 19 in the UAE capital

Image used for illustrative purpose. The Abu Dhabi Downtown Skyline and Corniche with the newly developing Central Market Towers at dusk.

Image used for illustrative purpose. The Abu Dhabi Downtown Skyline and Corniche with the newly developing Central Market Towers at dusk.

Getty Images

The UAE's top developers are exhibiting new projects collectively worth more than Dh15 billion at the 12th edition of Cityscape Abu Dhabi, which ends on April 19.

The UAE capital city has been seeing an erosion in capital values of its residential properties. In Q1 of 2018, Abu Dhabi's residential capital values were 7.5 per cent lower than last year and 1.8 per cent than the previous quarter, according to consultancy ValuStrat.

"Abu Dhabi's residential capital values have been declining for the last 2 years, however the rate of decline seems to have slowed over the last 9 months at a rate of less than 2 per cent per quarter. It will be interesting to see if this trend continues in the medium term," said Haider Tuaima, head of real estate research at ValuStrat.

Apartments in Al Reem Island and Al Reef saw quarter-on-quarter declines of 2.4 per cent and 1.9 per cent respectively, while villas in Al Reef and Hydra Village fell 2 per cent and Mohamed Bin Zayed City declined 2.3 per cent, estimated ValuStrat.

In terms of apartment sales, Al Ghadeer saw the most significant decline in sales prices with a decrease of 17 per cent, followed by Hydra Village (-9 per cent), Al Raha Beach (-7 per cent), Yas Island (-6 per cent) and Al Reem Island (-3 per cent) and Al Reef (-3 per cent), according to data by dubizzle Property.

ValuStrat estimates that overall median residential asking rents in Abu Dhabi fell 8 per cent when compared to the same period last year. On a quarterly basis, citywide median asking rents declined moderately by 2.7 per cent.

Data from dubizzle Property revealed that Al Khalidiyah experienced the largest decline in apartment rents by 22 per cent YoY, followed by Al Shamkha and Mussafah East (-14 per cent), Al Mushrif (-12 per cent), Al Reem Island (-12 per cent), Al Muroor (-12 per cent) and Al Reef (-11 per cent). Three-bedroom apartments for rent in Al Khalidiyah experienced the largest decrease in rents by 49 per cent.

Rents for villas experienced a similar decrease, with Al Raha Beach seeing the largest decline by 16 per cent, followed by Al Mushrif (-15 per cent), Al Raha Gardens (-10 per cent), Al Khalidiyah (-9 per cent), and Al Reef (-5 per cent), informed dubizzle Property.

Meanwhile, BNC Network has estimated that the total value of the 1,200+ residential and commercial building projects in Abu Dhabi has exceeded $62 billion (Dh230.45 billion).

Of the 1,600+ active projects in the urban construction sector, 76 per cent belong to residential and commercial buildings category. However, when split on value of the projects, 41 per cent of the projects belong to the residential and commercial buildings category while the remaining 59 per cent belong to other urban construction projects such as hotels, hospitals and malls.

Approximately 700 projects worth over $16 billion are under construction while over 60 residential and commercial building projects valued at $2.3 billion are currently being tendered. Approximately 130 projects worth $7.3 billion are in preliminary stages of the construction life-cycle.

"Abu Dhabi is a major economic power backed up by large hydrocarbon reserves that puts the emirate's economy on solid ground. However, low global oil prices in the period of 2014-2017 compelled oil-dependent economies to undertake conservative growth strategies, resulting in a slowdown in construction activities," says Avin Gidwani, CEO of BNC Network. "This is expected to be a temporary phenomenon as crude prices hover around the psychological $60-70 per barrel, investment in housing projects and other development initiatives is expected to increase.

"We would expect to see a surge in the construction activities in Abu Dhabi in the next few years, if the current level of crude oil prices hold. As it stands, major Abu Dhabi developers have already started announcing new projects, especially in the affordable home segment."

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