Abu Dhabi’s Bloom Properties has started construction of its mixed-use Al Bateen waterfront project as the residential property market continues to improve in the capital.
The Abu Dhabi Marina will have 225 apartments of one to four bedrooms, a five-star hotel, and 3,000 square metres of retail space.
Spread over 149,719 sq metres, the project will be built by the Dubai-based Al Shafar General Contracting.
Bloom aims to take advantage of the capital’s soaring property market, but the improvements are mixed. While rents and prices of prime units in the residential segment improved over the last year, the commercial segment still suffers from oversupply.
“While demand has picked up, there remains a market-wide oversupply [in office sector] and this continues to increase — currently over 3 million sq metres and approaching 4 million sq metres by 2016,” said David Dudley, the regional director and head of JLL in Abu Dhabi.
But the “demand for housing has improved significantly over the last 12 to 18 months”, he added.
Jobs generation and government policies, such as reducing the amount of commuting from Dubai, led to 17 per cent rental growth for prime, high quality units last year.
Removal of the rental cap along with a planned rental index to keep rents at fair levels and maintain competitiveness are expected to further the growth, Mr Dudley said.
The sales market improved on better investor confidence and the safe haven status of the UAE, leading to a 25 per cent price growth last year for prime units.
The retail outlook is also positive. “There is a limited supply of good quality malls relative to the substantial spending power of the population in terms of size and income, and consequently there is significant leakage to Dubai,” Mr Dudley said.
While rents and prices improve in the short term, a longer view is still unclear.
“Markets such as Abu Dhabi can be prone to short, sharp property cycles,” Mr Dudley said. “The demand side of the equation is largely dependent on the pace of government infrastructure and economic development initiatives to generate new job growth.”
Bloom’s portfolio, which is the development arm of National Holding, includes residential and commercial towers, retail and leisure centres in Abu Dhabi, Al Ain and Dubai. It also has projects in Iraq and Algeria.
In September, Bloom said it would build half of the Iraqi government’s US$15 billion housing scheme on the outskirts of Baghdad. The Madinat Al Mustaqbal, or City of the Future, project comprises 15,000 homes and is expected to be ready in six years. It is also working on a project in Karbala with 40,000 homes.
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