Aldar Starts Mid-Range Development Amid Slowing Abu Dhabi MarketBy
The Bridges to include 1,272 apartments on Reem Island
Half of the 1.3 billion-dirham project to be retained for rent
Aldar Properties PJSC is starting a housing development to cater to mid-income buyers amid a wave of consolidation among some of Abu Dhabi’s biggest companies.
The emirate’s largest developer and the builder of a Ferrari theme park plans to build six towers comprising 1,272 apartments by early 2020, Aldar executives said at a press conference in Abu Dhabi on Monday. The company will own half of the apartments in the 1.3 billion-dirham ($354 million) project to strengthen its recurring revenue.
“The supply in the Abu Dhabi market has been very controlled over the last few years,’’ Aldar Chairman Abubaker Seddiq Al Khoori told reporters. “The indications we see from our own property sales are very strong. We have over 90 percent occupancy in our properties and we have sold almost everything from the projects we have launched.’’
Aldar, partly owned by an Abu Dhabi sovereign wealth fund after a government bailout, has been boosting its recurring income, with money generated from malls, hotels, leased homes and offices, to guard against volatility in residential sales. The Reem Island development comes amid consolidation among Abu Dhabi companies, such as the merger of two banks, and a drop in property transactions.
Prices for single-family homes and apartments in the emirate fell an average 5 percent in the first quarter, according to real estate broker JLL. Rents for single family homes, known as villas, declined as much as 12 percent and apartments slid 6 percent on average.
“Conditions are tough,’’ said Craig Plumb, head of Middle East research at broker JLL. The market weakness “is coming from reduced demand because of cut back on employment and government spending,” he said.
The Bridges, as Aldar’s development is called, is the company’s second “mid-market’’ project catering to households with monthly earnings of 20,000 dirhams to 30,000 dirhams. There is high demand for such properties as the segment has been under-served in the past years, the chairman said.
The development will include studio apartments starting at 450,000 dirhams and one to three bedroom apartments from 750,000 dirhams, according to Aldar.