THE RIGHT TIME
Oversupply of real estate leads to highly competitive prices, while government initiatives such as 10-year visas for foreigners and increased tourism activity are expected to help demand pick up over the next few years.
The momentum experienced by the construction sector in Abu Dhabi has created a wide offer base for all kinds of properties. According to American real estate firm JLL, at the moment, the office, residential, and retail submarkets are fully supplied and experiencing slight to moderate declines in prices for both rent and purchase, which leaves potential investors and newcomers with bargaining power to negotiate rates. The hospitality sector is registering increases in occupancy rates following intensification of tourism arrivals.
Office
The Abu Dhabi office real estate market is moving toward consolidation. A set of mergers and joining measures by government entities and financial institutions has relieved the demand for office supply, creating a downward tendency in prices. n the case of Grade-A space, the price as of 2Q2018 stands at AED1,700 per sqm, a decline of 3.5% compared to last year. Grade-B space has seen a sharper decline of 12.6% yearly, with current prices at AED900 per sqm on average.
This tendency has also been caused by a considerable increase in office supply. By the end of 2018, 170,000sqm of office gross leasable area (GLA) is expected to have entered the market, which means an increase in supply of 4.8% compared to 2017. Major constructions such as Omega Tower, ADIB HQ on Airport Road, Leaf Tower, Wafra Commercial Building, and United Square are contributing to this supply increase. The growth rate of supply for office space is expected to reduce significantly in 2019, with an estimated addition to the market of 50,000sqm.
Retail
There have been two trends shaping the retail sector recently. On one side, the introduction of VAT in the UAE has made retailers focus on offering greater value to shoppers, who have become more price sensitive. On the other side, as e-commerce gains ground in the country, the demand for retail space is becoming more storage-centered. The only delivery over 2018 in Abu Dhabi expanding retail space offering has been Leaf Tower on Reem Island. With other multi-purpose deliveries expected by the end of 2018, the market will see an increase of 62,000sqm of GLA, while 20,000sqm are expected to enter the market in 2019.
Some projects in the pipeline are expected to increase supply of retail space in the medium term. These include plans for expansion at Marina Mall, Reem Mall, and City Centre Al Jazeera.
Residential
The UAE government's decision to allow 10-year visas for foreigners as well as 100% foreign ownership in companies has brought more security to expats living in the country, which will serve as a boost for demand of residential real estate in the next few years. 2018 is expected to see a total additional creation of supply in Abu Dhabi of 3,000 units, adding up to 255,000 residential units in total by the end of the year. Over 2019, 7,000 additional residential units are expected to enter the market.
Hospitality
2017 saw a breaking record year with 4.88 million visitors to the Emirate. Prospects for 2018 indicate that the number should reach 6 million.
The total room stock in Abu Dhabi will reach 22,400 rooms by the end of 2018 with the addition of 600 rooms resulting from the completion of Grand Hyatt Abu Dhabi Hotel & Residences, Rotana Saadiyat Beach Hotel, and Edition Al Bateen Harbour Hotel, among others.
According to Department Culture and Tourism-Abu Dhabi, the average occupancy rate of hotels in the Emirate stood at 74% over 2017. Data from January to May 2018 registered an increase of 1.4% compared to the same period of last year. The average daily rate (ADR) at Abu Dhabi's hotels over the January-May 2018 period stood at USD114, which is a 7% decrease compared to 2017. This fall in price is mostly due to the creation of additional hotel room supply.
THE RIGHT TIME
TABLE OF CONTENTS
Focus: Tackling Unlawful Cryptocurrency Use
Crypto Crime
The rapidity and anonymity of crypto-transactions make them attractive not only to risk-prone investors, but also to criminals. Finding an efficient solution that does not completely undermine or overturn the nature of digital currencies is proving to be extremely hard.
read articleGuest Speaker
Juan Carlos Varela, President, Republic of Panama
TBY talks to Juan Carlos Varela, President of the Republic of Panama, on expanding the country's diplomatic footprint, the importance of participating in Expo 2020, and both countries' respective leadership roles as regional entrepôts.
read articleInterview
Rashed A. Al Blooshi, Chief Executive, Abu Dhabi Securities Exchange (ADX)
TBY talks to Rashed A. Al Blooshi, Chief Executive of Abu Dhabi Securities Exchange (ADX), on highlighting the opportunities available to companies on ADX, adopting best practices in the field, and further developing the market.
read articleFocus: ADNOC’s Partnership Model
Spheres of Influence
Following the announcement of an expanded partnership model and a more active approach to managing its businesses and portfolio of assets, a series of cooperation accords position the national oil company as a champion of commercial liberalism.
read articleInterview
hmed Omar Abdulla, CEO, Abu Dhabi Polymer Company Ltd (Borouge),
TBY talks to Ahmed Omar Abdulla, CEO of Abu Dhabi Polymer Company Ltd (Borouge), on the impact of its new Borouge 4 plant, specialized solutions for global challenges, and the need to continue to invest in innovation.
read articleInterview
Philippe Peccard, President Middle East Engineering & Investment Projects, Linde Group
TBY talks to Philippe Peccard, President Middle East Engineering & Investment Projects of Linde Group, on being a key partner of its regional partners, developing the downstream value chain, and further enhancing operations with technology.
read articleFocus: In-Country Value
Time to Commit
The announcement of the In-Country-Value program is a significant step for ADNOC and Abu Dhabi in growing the local private sector. Vertically, it will develop the energy industry through a trickle-down effect; horizontally, it will affect other sectors through a multiplier effect in the long-term.
read articleInterview
Ali Vezvaei, Executive President & CEO, Bilfinger Middle East
TBY talks to Ali Vezvaei, Executive President & CEO of Bilfinger Middle East, on its keys areas of focus in the UAE, trends in the hydrocarbons sector, and the application of energy efficiency technologies to new sectors.
read articleInterview
Samia Bouazza, Managing Director , Multiply Marketing Consultancy
TBY talks to Samia Bouazza, Managing Director of Multiply Marketing Consultancy, on satisfying sophisticated consumers with high purchasing power, targeting different categories of the population, and thinking globally while acting locally.
read articleInterview
Yousuf Al Shaibani, Director General, Mohammed Bin Rashid Space Centre (MBRSC)
TBY talks to Yousuf Al Shaibani, Director General of the Mohammed Bin Rashid Space Centre (MBRSC), on the goals of the national space program, attracting youth to the program, and the significance of KhalifaSat.
read articleInterview
Abdulla Jassem bin Kalban, Managing Director & CEO , Emirates Global Aluminium (EGA)
TBY talks to Abdulla Jassem bin Kalban, Managing Director & CEO of Emirates Global Aluminium (EGA), on its expansion upstream, strategies to grow the sector, and sustainability initiatives.
read articleInterview
Sheikh Abdulla bin Mohammed Al Hamed, Chairman , Department of Health (DoH)
TBY talks to Sheikh Abdulla bin Mohammed Al Hamed, Chairman of the Department of Health (DoH), on facilitating investment for local and foreign investors and building and maintaining a sustainable workforce.
read articleFocus: Technical Training vs. Academic Teaching
Balanced Learnıng
Abu Dhabi's technical institutes are growing in popularity among young Emiratis; however, finding a balance with more traditional academic programs is paramount to ensure the development of a truly knowledge-based economy.
read articleInterview
Noura bint Mohammed Al Kaabi, Minister , Culture and Knowledge Development
TBY talks to Noura bint Mohammed Al Kaabi, Minister of Culture and Knowledge Development, on the Creative Industries Contributions Index, bridging the AI-culture divide, and adopting a systems leadership approach moving forward.
read articleInterview
Mohamed Khalifa Al Mubarak, Chairman , Department of Culture and Tourism (DCT)
TBY talks to Mohamed Khalifa Al Mubarak, Chairman of the Department of Culture and Tourism (DCT) Abu Dhabi, on the role of innovation, the late Sheikh Zayed's cultural vision, and strengthening cultural engagement among youth.
read articleInterview
Saif Saeed Ghobash, Undersecretary , Department of Culture and Tourism (DCT)
TBY talks to Saif Saeed Ghobash, Undersecretary of the Department of Culture and Tourism (DCT) Abu Dhabi, on becoming a beacon of cultural tourism, tailoring its approach to different markets, and penetrating the MICE segment.
read articleInterview
Humaid Matar Al Dhaheri, Group CEO , Abu Dhabi National Exhibitions Company (ADNEC),
TBY talks to Humaid Matar Al Dhaheri, Group CEO of Abu Dhabi National Exhibitions Company (ADNEC), on fast-tracking Abu Dhabi's economic diversification, the importance of the Year of Zayed, and technology's impact on the world of event planning.
read articleInterview
Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister , Climate Change and Environment
TBY talks to Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of Climate Change and Environment, on the UAE's commitment to reducing its ecological footprint, transitioning to a climate-resilient green economy, and the importance of sustainable green finance.
read articleInterview
Neri Askland, Vice President , Middle East and UAE Country Manager of Statoil
TBY talks to Neri Askland, Vice President of Middle East and UAE Country Manager of Statoil, on its efforts to help reduce its carbon footprint, opportunities for R&D in the area, and its collaboration with Masdar.
read articleFocus: Nuclear Energy
The Nuclear Option
The UAE is the first country in the MENA region to develop nuclear power, with Abu Dhabi's Barakah nuclear power plant. The Emirate hopes to achieve energy security and embrace alternative sources of energy, ensuring full cooperation and support from the international community.
read articleInterview
Christer Viktorsson, Director General , Federal Authority for Nuclear Regulation (FANR)
TBY talks to Christer Viktorsson, Director General of Federal Authority for Nuclear Regulation (FANR), on the role of the institution in advancing the nuclear energy regulatory environment, the Barakah Power Plant, and the importance of an integrated network.
read articleInterview
Eng. Omar Husain Al Hashmi, Acting Managing Director , Abu Dhabi Sewerage Services Company (ADSSC),
TBY talks to Eng. Omar Husain Al Hashmi, Acting Managing Director of Abu Dhabi Sewerage Services Company (ADSSC), on its successes with STEP, helping Abu Dhabi to reduce its carbon footprint, and its successful Emiratization policies.
read articleInterview
Saeed Al Bahri Salem Al Ameri, Director General , Abu Dhabi Food Control Authority (ADFCA)
TBY talks to Saeed Al Bahri Salem Al Ameri, Director General of Abu Dhabi Food Control Authority (ADFCA), on the Farmers Income Support Program, the UAE's agroecological climate, and introducing intelligent control systems.
read articleInterview
Falah Al Ahbabi, Chairman, Department of Urban Planning and Municipalities (DPM)
TBY talks to Falah Al Ahbabi, Chairman of Department of Urban Planning and Municipalities (DPM), on coordinating joint-investment programs and strategic alliances with the private sector and integrating technology within developments and services.
read articleInside Perspective
Mohammed Ahmed Bin Abdulaziz Al-Shehhi, Undersecretary of Economic Affairs, the Ministry of Economy
Mohammed Ahmed Bin Abdulaziz Al-Shehhi, Undersecretary of Economic Affairs of the Ministry of Economy, on efforts to enhance the UAE's intellectual property framework, creating a knowledge-based economy, and fostering a culture of innovation.
read articleInterview
Khalifa Al Mubarak, Group Chief Executive Officer & Managing Director, Mubadala Investment Company
TBY talks to Khaldoon Khalifa Al Mubarak, Group Chief Executive Officer & Managing Director of Mubadala Investment Company, on the company's diversification strategy, its technology investments, and its focus on innovation.
read articleFocus: Economic Stimulus Package
Desert Breeze
Abu Dhabi unveiled the new stimulus package, Ghadan 21, in effort to counter the post-oil crisis slowdown. While it might be too soon to call for the end of austerity measures, it definitely signifies the leadership's commitment to grow the Emirate's economy.
read articleInterview
Rashed Lahej Al Mansoori, Chairman, Statistics Centre- Abu Dhabi (SCAD)
TBY talks to Rashed Lahej Al Mansoori, Chairman of Statistics Centre-Abu Dhabi (SCAD), on its efforts to improve data collection and lower costs, innovative statistical development tools, and its Emiratization policies.
read articleInterview
Saeed Al Neyad, Director General, Abu Dhabi Monitoring and Control Centre (ADMCC)
TBY talks to Saeed Al Neyadi, Director General of Abu Dhabi Monitoring and Control Centre (ADMCC), on being a critical enabler for various key partner organizations, efforts to increase Abu Dhabi's competitiveness in tourism and commerce, and improving the quality of life for citizens and visitors.
read articleInterview
Nick Cochrane-Dyet, Chairman, British Business Group (BBG)
TBY talks to Nick Cochrane-Dyet, Chairman of British Business Group (BBG), on Abu Dhabi's forward-looking strategy, the need for British firms to continue to bring value to the Emirate, and areas of opportunity for the UK.
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