Cityscape Connect concludes there is ‘vast opportunity’ for the right buyers in the Abu Dhabi real estate market but greater transparency will improve investor sentiment

More accurate and timely market information, greater transparency and further legislation are required to attract institutional investors to the Abu Dhabi real estate market.

These were the conclusions from the expert panel at the second Cityscape Connect Abu Dhabi Business Breakfast, which attracted over 100 senior real estate industry players on 27th October.

Cityscape Connect is the not-for-profit initiative from leading global real estate event and business information brand Cityscape. It is designed to stimulate networking and information sharing and acts as a year-round platform to discuss business-critical issues in the real estate industry.

Philip Gray, Country Manager, UAE for DTZ, opened up the session by commenting, 'This is a really interesting time to be holding the Cityscape Connect session, as 600million pairs of eyes will be on Abu Dhabi this week in its quest to become a global city.  The basic fundamentals of the market look good and there are a number of exciting opportunities going forward for investors and developers.”

“Abu Dhabi should look at building products that can be marketed to funds on a global basis,” said John Davis, CEO of Colliers International Middle East, one of the panellists at the session.  “International investors are very interested to enter the market. As property is a long-term investment, we should be looking at development on a long-term view. We are missing a big trick. We should start thinking on a global basis – not just for immediate profit.”

The panel was in agreement that due to economic conditions, there has been a significant decline in the levels of speculative investment, but saw this as a positive indication of the ‘maturing’ of the Abu Dhabi real estate market.  The more risk adverse institutional investors, while showing interest, are taking a more cautious approach with the largest obstacles around ownership issues, lease terms and the quality of properties on offer.

With a shortage of quality completed developments in Abu Dhabi, “Al Reem Island and Al Raha Beach, when finished, will help to fill the gap.” said Rami Nasser, Director of Sales and Commercial Leasing for Aldar, who was also one of the panellists.

Philip Ward, CEO of Abu Dhabi Finance, another expert panellist, commented that he “sees a shortage of opportunities for the right type of investor. The UAE mortgage market is only 6 years old and there are already more than 20 entities offering residential mortgage finance. In 2-3 years time, the market would see a lot more products available.”

Much of the discussion was focussed around the need for greater transparency in legislation. David Nunn, Partner and Head of Middle East Real Estate and Leisure for Simmons & Simmons sees the introduction of more regulatory control, encompassing Strata and Agency Law as well as planning and building control in the next year. He added that, “Abu Dhabi is a very young market and is a work in progress. Until 2005, even locals could not buy property without the approval of the ruler. This is already a radical step in terms of sophistication.” 

Transparency and new regulations will go a long way towards stimulating investment into the Abu Dhabi real estate market and panellists agreed that Abu Dhabi is well positioned for recovery, with John Davis commenting, “There are vast opportunities for real estate investment, not only in Abu Dhabi, but in Dubai and across the region.”