Khodr Chahal, Chief Executive Officer at Colossus Real Estate, tells us how Abu Dhabi is shaping up for the future
We have seen a lot of new development in Abu Dhabi over the past few years, and that’s to be welcomed – we want Abu Dhabi to be at least as exciting and entertaining as Dubai.
With the grand opening of the Yas Mall just before the Formula 1 Etihad Airways Abu Dhabi Grand Prix, I think we will be kept busy for a while afterwards – the Hyatt at the World Trade Centre (WTC) will increase our dining-out options, the Corniche beach is expanding, and Ferrari World is to gain seven more rides increasing its capacity by 40 per cent. All that is due to take place around Q2 of 2015. And we must not forget the opening of the Louvre Museum on Saadiyat Island at the end of 2015.
There have also been many new mixed use developments announced in Abu Dhabi recently, including those on Al Reem Island, Al Raha Beach, Saadiyat Island and Yas Island, as well as buildings and villa developments scattered along the Corniche and off the island.
Those include Aldar’s Coconut Island, near the Al Bateen area in Abu Dhabi, a residential development of luxurious villas nestled amongst coconut trees. It will have a private road to get you on and off of the island and also feature a five-star hotel.
During Cityscape Abu Dhabi 2014, Arabtec showed an amazing ranch-style villa compound near Ghantoot on the way to Dubai right by the beach. This project will have rivers and lagoons connected to the Arabian Gulf as well as walkways surrounding the compound – not only for walkers and cyclists, but also for horseback riders as well. The development will include stables, so you can keep your own horses close by.
TDIC will soon be selling 100 off-plan villas next to Cranleigh Abu Dhabi on Saadiyat, and it has already launched Mamsha Saadiyat, a new residential beachfront apartment project. This project is unique and has great potential – in my opinion it has the best sea views in Abu Dhabi and priceless views of the projected Guggenheim museum (due to open 2017) to the west. Although some may consider it overpriced for an off-plan project, realistically it has the character to be the most sought-after residential product in Abu Dhabi for years to come – and TDIC will most likely have the sales transactions to prove it.
Following the success of Al Reef in Shahama, Manazel launched Reef 2 at Cityscape Dubai 2014 recently. This project, consisting of 860 villas, will be located in Samha near the Kizad overpass at the halfway point between Dubai and Abu Dhabi. The two emirates have been slowly closing the distance gap over the past eight years and for this reason I believe this project shows potential.
A lot of this residential development, along with the property that is currently available in the capital, will be absorbed easily by the influx of people coming into Abu Dhabi as a result of job creation. For example, the Global Markets on Al Maryah Island, which we expect to be open in 2015, will bring new companies into this market and in turn will help strengthen our residential sector.
So now is a good time to be investing in property in Abu Dhabi. Here are a couple of pointers when making an investment in property.
An important consideration is the yield and to understand how it may vary depending on the size of the property. Say, for example, you are looking at two-bedroom apartments on Al Reem Island. All the apartments are in the same building with the same view and a similar layout (without study or maids room). If the apartments vary in size we will of course find a respective variation in market rent.
But the key is that the yield, or return on your investment, decreases as the size of the apartment increases. We find similar rents for different sizes of two-bedroom apartments; so as an investor, it is wiser to go for the smaller-sized apartment where you can expect a higher yield.
You can also use this rule when looking at the option of buying one large apartment versus two small apartments, for example, or buying a three-bedroom apartment versus two one-bedroom apartments. Again the yield in most cases may be higher with the latter option.
Gazing into our crystal ball, we see that these are exciting times as Abu Dhabi is showing huge potential. Long-term investments are not risky – so get out there and make some acquisitions.
Our contributor:
Khodr Chahal, Chief Executive Officer, Colossus Real Estate, 02 6797993
