Good investment opportunities in Abu Dhabi’s mid-range residential and retail sector

ABU DHABI: A government-led infrastructure programme has helped create a sense of stability to the real estate investment market but it would take time for it to become fully established, according to senior executives of the top-three Abu Dhabi master developers.

Mid-range residential rental and the retail property sectors were identified as having the greatest investment potential during an investment and finance panel debate at the Cityscape Abu Dhabi conference, held from April 18 to 21 at the Abu Dhabi National Exhibition Centre.

Government investment in infrastructure will have a beneficial effect on Abu Dhabi’s property market, creating more employment opportunities, which will in turn bring more demand for residential and commercial projects, said Gurjit Singh, chief operating officer of Sorouh Real Estate, one of the three developers for the multi-billion dollar Al Reem Island project, in a press release on the Cityscape Abu Dhabi website.

Developers will be in a good position to capitalise if they were to tap into the mid-range residential rental sector as a future investment opportunity, Singh added.

“This is what we are doing. It’s a substantial element of the market,” said Gurjit. He added that the return of stability to the Abu Dhabi market was ongoing but the “speculator activity of the past still has to be absorbed”.

According to John Thomas, executive director of Mubadala Real Estate and Hospitality, it will never be possible to totally eradicate the speculative element in real estate but governments can bring in measures to control the speculators, adding “times are different now and there is a new maturity level”.

The retail sector was singled out as an “unsung opportunity” as Abu Dhabi has relatively low retail space per capita, said John Bullough, chief executive office of Aldar Properties.

On the impact of the global recession, Bullough said: “We have all felt the pain. The last 18 months have been cathartic for the market. We now need to give investors solid future prospects and that is a long-term play. This isn't a quick win. Property is a long-term investment.”