Land prices have tripled in a year; new developers open ‘almost daily’ and there are few planning barriers. Welcome to Abu Dhabi
Since the release of Plan Abu Dhabi 2030 in September 2007, land prices have tripled. Plots are traded nine or 10 times before any work starts – and when it does, sometimes it is merely the developer trucking a single pile of sand back and forth to create the semblance of activity while waiting to sell at an inflated price. Homes pass through multiple owners before becoming anything more real than a sophisticated rendering. New developers open ‘almost daily’, according to Miles Payne of property consultant Strutt & Parker, while development consultants like Atkins have been ballooning at growth rates of 40-50 per cent a year – the 400-strong Atkins Abu Dhabi office is looking to take on 180 more staff before 2009. ‘It’s like the oil,’ says Atkins’ Tabet as he bounces on his chair. ‘It’s boiling! It’s bubbling up!’
Once developers have given the nod, the design and build process is swift. ‘Incentive is to get the scheme on site as quickly as possible because the rate of inflation is so high,’ says Tony Morris, Middle East commercial director at engineering consultant Hilson Moran. ‘The sooner they can get their contracts fixed, the more they limit their risk exposure.’ Hilson Moran is currently working on Gensler’s Tameer Towers scheme – a £62 million, 560,000m2 development comprising one 300m-high commercial tower and four residential towers of 25-50 storeys. Morris says developments also move along because of fewer planning restrictions. ‘If they work to the 2030 masterplan, they’ll have a certain gross and mix of use to achieve, but overall the process is much faster.’
Part four: Boom to bust?