Abu Dhabi Takes on Skeptics, Insisting It's Not Dubai

Abu Dhabi Takes on Skeptics, Insisting It's Not Dubai

Commercial News » Commercial Real Estate Edition | By Kevin Brass | April 26, 2010 1:10 PM ET

(ABU DHABI, UAE) -- If nothing else, the Abu Dhabi government makes spectacular models, attendees at this year's Cityscape Abu Dhabi agreed.

The centerpiece of the show floor during the annual conference was a spectacular 75' x 55' scale representation of Abu Dhabi's 2030 plan, a sprawling model depicting how the U.A.E. will look if all the projected developments come to fruition. Plans calls for several eye-popping projects, including a soon-to-open Ferrari theme park on Yas Island, billed as the largest indoor theme park in the world, and Saadiyat Island, an ambitious development scheduled to include branches of the Louvre and Guggenheim museums.

That type of serious development bling might draw comparisons to Dubai, but promoters used Cityscape to assure the market and investors that Abu Dhabi's growth is more reality-based than its Emirates sister.

"This is a stable place," said John Bullough chief executive of Aldar, the developer behind Yas Island and the Ferrari theme park. "If you are looking for a safe haven, this place shines."

Nevertheless, many attendees remained skeptical that Abu Dhabi would be able to fill all the planned luxury condominiums and hotel rooms.

"I've listened to what everybody has to say and to be honest I still don't understand it," said Craig Cowie, managing director of real estate for Saudi Arabia-based Al Rajhi Capital.

> Residential sales prices in Abu Dhabi decreased 42 percent from the peak in 2008, according to the latest market report by Colliers International.

However, there are ample signs that Abu Dhabi's fundamentals are much different than Dubai. Rental occupancy remains close to 100 percent, according to Colliers. During Cityscape, one American executive said his company will pay $85,000 a year to rent a moderate two-bedroom apartment in the city.

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