The most recent Gulf State to join the wave of property ownership reform, Abu Dhabi is both uniquely well advantaged and determined to move ahead in 2007. There will be the first sales of off-plan apartments to foreigners on 99-year renewable leases, and the mobilization of huge construction sites.
But this is also going to be a year of considerable challenges for the sector which is somewhat late to market. The main danger is that market conditions will change. That might mean a softening of oil prices, or a downturn in the neighboring Dubai market where Abu Dhabi investors have been very active.
However, Abu Dhabi is the wealthiest city in the world per capita, with both 10 per cent of the world’s oil in the ground and an estimated $500 billion investment fund, and if deep pockets are required to overcome short-term market changes then this emirate is uniquely advantaged. Even in the worst possible circumstances Abu Dhabi will not run out of money.
Very wealthy city This is unusual in the world of property development where high leverage, big risks and big gains for the astute or lucky are the name of the game. Abu Dhabi is more like a very wealthy person who decides to build themselves a new house; market conditions are irrelevant, it is the new house that counts.
It is this environment that makes Abu Dhabi attractive to global property funds who prize security of asset values above the opportunity to make a fast buck.
