AL­DAR RE­VEALS PLAN FOR DH10BN PROJECT NEAR BOR­DER WITH DUBAI

First phase of the ‘super-af­ford­able’ com­mu­nity com­prises 611 homes start­ing at Dh290,000

The National - News - - OPINION - SARAH TOWNSEND

Al­dar, Abu Dhabi’s big­gest listed real es­tate com­pany, un­veiled yes­ter­day a Dh10 bil­lion mas­ter plan for a mixed-use project called Al­ghadeer, lo­cated close to the Dubai bor­der.

The 3-mil­lion-square-me­tre scheme is an ex­ten­sion of the com­pany’s Al Ghadeer neigh­bour­hood near the Kizad Free Zone, Dubai’s Al Mak­toum In­ter­na­tional Air­port and the Expo 2020 site. The project will be Al­dar’s first foray into a res­i­den­tial price bracket “even more af­ford­able” than what the Abu Dhabi de­vel­oper has tapped re­cently in re­sponse to three years of weaker oil prices that have tight­ened bud­gets and pushed down prop­erty prices.

“We promised the mar­ket [two years ago] we would fo­cus on af­ford­able hous­ing and saw some niche pock­ets of op­por­tu­nity, in­clud­ing our Wa­ter’s Edge and The Bridges schemes, for which there has been strong de­mand, and we will con­tinue to de­velop them,” Talal Al Dhiyebi, chief ex­ec­u­tive of Al­dar, said.

“How­ever, we also saw op­por­tu­ni­ties in an even more af­ford­able sec­tor. There has def­i­nitely been a soft­en­ing at the pre­mium end and it is our duty to sat­isfy the mar­ket’s needs.”

Al­dar has priced units at Al­ghadeer “ag­gres­sively” in re­sponse to mar­ket con­di­tions, he said, with prices for maisonettes – two-storey homes where each floor is leased as an in­di­vid­ual apart­ment – start­ing at Dh290,000 and town­houses at Dh899,900.

A hand­ful of de­tached vil­las will be priced be­tween Dh1.4m and Dh1.6m each. The first phase of 611 homes will be mar­keted off-plan at this week’s Ci­tyscape Global ex­hi­bi­tion in Abu Dhabi and is sched­uled for com­ple­tion in 2021. A con­struc­tion ten­der is ex­pected to be is­sued in Oc­to­ber.

Av­er­age apart­ment and villa rents in Abu Dhabi de­clined by 10 per cent and 7 per cent yearon-year in 2017 as the im­pact of low oil prices caused a slow­down in the UAE prop­erty mar­ket, while apart­ment and villa sales prices de­clined 10 per cent and 4 per cent, ac­cord­ing to con­sul­tancy Asteco’s fourth-quar­ter 2017 mar­ket up­date.

Rents are fore­cast to drop by 4 to 7 per cent in 2018 – a slower pace than last year, as mar­ket sen­ti­ment im­proves on the back of sta­bil­is­ing oil prices and in­creased govern­ment spend­ing, bro­ker Core Sav­ills said in a re­port ear­lier this month. Al­dar, which re­ported an 80 per cent drop in fourth quar­ter 2017 prof­its on a one-time charge re­lated to its as­set man­age­ment busi­ness, en­tered into a strate­gic part­ner­ship with Emaar Prop­er­ties, Dubai’s big­gest listed real es­tate de­vel­oper, last month to de­velop schemes.

Mr Al Dhiyebi said Al­dar was “open to col­lab­o­ra­tion” with Emaar wher­ever there was mu­tual ben­e­fit, but that there were cur­rently no talks on­go­ing with Emaar to jointly de­velop Al­ghadeer. Al­dar will fund the scheme through a com­bi­na­tion of in­ter­nal re­serves and bank fi­nanc­ing, but the chief ex­ec­u­tive would not re­veal the planned debt-to-eq­uity ra­tio. “The vast ma­jor­ity of the scheme will be fi­nanced through pro­ceeds from sales,” he said. The de­vel­oper is re­quired to fi­nance at least 20 per cent of each phase be­fore con­struc­tion be­gins – Dh200m each in this case – un­der UAE real es­tate laws.

Al­dar does not is­sue bonds to sup­port project fi­nanc­ing but it in­tends to re­fi­nance a non-project spe­cific $750m sukuk due to ex­pire later this year, Mr Al Dhiyebi said. Al­dar said its ex­ist­ing Al Ghadeer com­mu­nity is 90 per cent oc­cu­pied and com­prises 2,130 com­pleted homes first brought to mar­ket in 2014. The broader mas­ter plan com­prises a fur­ther 14,408 units – 1.3m square me­tres of built-up res­i­den­tial space in to­tal – in­clud­ing 449 vil­las, 2,174 town­houses and 11,784 maisonettes, de­liv­ered over a pe­riod of 15 years across three or four phases.

The sec­ond phase of 682 homes will start around six months af­ter the first phase, sub­ject to progress on sales, with the to­tal in­vest­ment value of those two phases reach­ing around Dh1.2bn, Mr Al Dhiyebi said. As well as res­i­den­tial units, the mas­ter plan con­tains of­fice space, retail space, ho­tels, schools and com­mu­nity ameni­ties in­clud­ing a neigh­bour­hood farm called Har­vest.

Reuters

A vis­i­tor ex­am­ines prod­ucts dur­ing the China Im­port and Ex­port Fair, also known as Can­ton Fair, in the city of Guangzhou, China, yes­ter­day

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