Construction fever is running high
Abu Dhabi, July 22, 2007
With Abu Dhabi pouring hundreds of billions of dollars into its infrastructure, industry, tourism facilities and real estate, construction fever is running high as the emirate presses ahead with visionary plans to invest and diversify its economy.
For players in the construction industry, these are exciting times to be in Abu Dhabi, which is taking the dictum – if you build it they will come – and applying it with single-minded determination to secure the emirate’s future in preparation for the day when oil eventually runs out.
One of Abu Dhabi’s senior planners recently summed up the mood when he said that a radical transformation of the government and economy was under way.
“We have set about implementing changes that are intended to revolutionise the way in which Abu Dhabi operates,” Abu Dhabi Executive Council Mohammed Ahmed Al Bowardi said in comments to the British Business Group’s Capital Letter magazine.
These changes, he said, include restructuring, revising and updating the government’s machinery, and a fresh focus to diversify the economy with special economic zones.
“Now,” he said, “the process has begun to accelerate, helped, in part, by the fact that high oil prices have generated substantial revenues that can be ploughed into other forms of economic development.”
The statistics speak for themselves: Gulf Construction estimates that major real estate projects worth more than Dh380 billion ($103 billion) are already in various stages of progress in the emirate while another $43 billion are on the drawing board, including the $7 billion Mohammed bin Zayed City. This apart, several industrial ventures including an estimated $5 billion petrochemical venture and a $8 billion aluminium smelter have been initiated.
The major projects under way in the emirate include the Saadiyat Island at Dh100 billion, the Yas Island development (Dh147 billion), Al Raha Beach (Dh54 billion), Danet Abu Dhabi (Dh34 billion), Al Reem Island including Najmat Abu Dhabi (Dh29.36 billion) and Shams Abu Dhabi (Dh9.1 billion) and Capital Centre (Dh8 billion).
Over the past nine months projects worth Dh100 billion have been unveiled including the Dh18.35 billion Green Community by Masdar, the Dh11 billion Desert Islands project by the Tourism Development and Investment Company (TDIC), the Dh7.34 billion Marina Rise project by Eshraq, and Manazel’s Dh7 billion Building Materials City.
The emirate’s real estate sector is experiencing a boom, thanks to the opening up of the sector to foreigners.
This has seen several developers – not only local but also from the rest of the Gulf as well as from further afield such as from Singapore (CapitaLand and Keppel Land) – join in the lucrative development projects unveiled by Abu Dhabi.
These mega mixed-use developments will enfold a multitude of hotels, retails and recreational facilities, allowing Abu Dhabi to capture some of the growing regional tourist traffic. In the next three years alone, the emirate is expected to see some 4,500 rooms brought on to the market.
Apart from the real estate bonanza, the emirate is also planning well into the future with its diversification programme which aims to reduce its reliance on hydrocarbons reserves. Now well under way, the programme will focus on public-private partnerships, with developments encompassing tourism, energy, real estate and social programmes.
Although the basis of the emirate’s economic strength remains its oil and gas wealth, the emirate is firmly focused on diversification, with the launch of the Industrial City of Abu Dhabi and the Khalifa Port and Industrial Zone, where almost half of the $25.5 billion project cost is coming from private sources.
New zones will also be created, with clusters being set up for petrochemicals, plastics, aluminium, steel and glass.
A key development in this a