CAPITAL INSIGHT
CLEAR SIGNS OF CAPITAL UPTURN A
t the time of writing, stocks on Abu Dhabi’s ADX General Index (ADSMI) were at their highest level since November 2011; bolstered
by the news that 2001 profits of Aldar (Abu Dhabi’s biggest property developer) beat estimates; while Sorouh Real Estate Co., the emirate’s second-largest developer, headed for the highest close in almost five months.
Aldar, the company behind the Yas Marina Formula One circuit and the
Ferrari World theme park, made a fourth-quarter profit of AED182.1 million, Reuters calculated, compared with a loss of AED11.14 billion during the same period in 2010. “Recent news on the real estate sector, including progress on Aldar
and the commitment of the United Arab Emirates to some key projects, provided a rebound,” said Ahmed Talhaoui, Abu Dhabi-based head of investment and asset management at Royal Capital PJSC. A positive wind is blowing across the construction-filled skyline of the
UAE capital, after a few rocky years. Aldar is on an even keel; a new iconic building seems to be unveiled almost every month, and property pricing is on a gradual upward curve. With a plethora of exciting, world-class developments slated to come
on line this year, the real estate market in the capital will be anything but stagnant. Developers are going out of their way to generate interest in the thousands of new homes, offices and retail space they are creating across the city. Property experts CBRE suggest the Emirate might still be in for a bumpy ride, however, according to its most recent local market report. Despite an increasingly strong economic outlook, bolstered by the
continued flow of petrodollars, Abu Dhabi’s real estate sector still faces some downside risks, according to CBRE. Tis year, supply is forecast to outstrip demand. CBRE suggests a further
drop in rental rates is inevitable, although with a highly fragmented market, the impact will vary, dependent on the quality and location of individual products. City centre (on-island) real estate will continue to command premium
prices, both residential and commercial - particularly as Abu Dhabi awaits completion of Sowwah Square and further delivery of developments in Marina Square, Reem Island, although the overall trend for office rents has been downwards. Te last quarter of 2011 saw a marginal fall in office lease rates, ending the
28 I CITYSCAPE I APRIL 2012
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