Council on Tall Buildings and Urban Habitat
CTBUH Leads Discussions at Cityscape Abu Dhabi

May 2012
by Kevin Brass

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Council Public Affairs Manager Kevin Brass chaired the Middle East Real Estate Summit, the annual event for the regional property industry. Industry leaders focused on how and why projects are getting built.

Figure 1. Model of the vision for Abu Dhabi in 2030 © Cityscape

Four years ago crowds of buyers pushed and shoved and threw checks at developers during Cityscape Abu Dhabi, hoping for the chance to purchase apartments in projects announced during the annual property show. Along with collectible renderings of spectacular unbuilt developments, the chaotic scene quickly became a symbol of the craziness that gripped development in the UAE, capturing a moment in time.

This year’s Cityscape was a more subdued affair. No announcements of rotating towers or man-made islands. The show floor still features the giant interactive model of the vision for Abu Dhabi in 2030 – probably the “world’s largest interactive model of a city,” given the UAE’s zest for records – but most of the exhibitors were content to focus on existing projects and the much-repeated “signs of stability.”

Since that 2008 Cityscape, residential and office rents in Abu Dhabi have fallen more than 40 percent. Sales have slowed to a trickle and developers are turning to rent-to-own schemes to fill empty apartments.

Many of the projects launched in the heyday are now coming to fruition, including an array of towers on Reem island; and the Domain and Trust towers in the Foster + Partners-designed Central Market development. Tenants are also moving in to the stunning new central business district built around the Napoleon’s-tomb shaped Abu Dhabi Stock Exchange on Sowwah Island, which has now been renamed Al Maryah, for no apparent reason.

But Abu Dhabi is not Dubai. While it is home to its share of the amazing and bizarre—don’t miss Ferrari World, with “the world’s fastest roller coaster” – development is more controlled and relegated to a few zones open to foreign buyers. Last year projects ground to a halt as the government reassessed almost every development. In December, Aldar, once the emirate’s biggest developer, sold US$4.7 billion in projects to the government, including the Foster-designed Central Market, as part of its on-going reorganization of billions in debt.

This year’s Cityscape was much different than the same show a year ago. In January, the Government called an end to its review and announced plans to restart billions of dollars in funding for projects, including a Jean Nouvel-designed branch of the Louvre and a Guggenheim museum designed by Frank Gehry. A few weeks before the show, Aldar and fellow developer Sorouh confirmed they were in merger talks.

I attended Cityscape to chair the Middle East Real Estate Summit, the panel discussion portion of the event. Unlike previous years, when forums typically focused on developers and the ebbs and flows of the consumer markets, this year’s sessions were dominated by finance executives, bankers and investment fund directors, reflecting the state of the industry’s mindset. Everybody wants to follow the money, waiting for signs that the investment community is once again confident and ready to support development.

Figure 2. Cityscape Middle East Real Estate Summit © Cityscape

Abu Dhabi hasn’t hit that point, yet, with most analysts predicting an oversupply of homes and office space for the next few years. Almost 24,000 residential units are scheduled for completion this year, according to Jones Lang LaSalle.

During my panel discussions with financial executives, much of the discussion focused on Saudi Arabia and Qatar, the hot spots for construction in the region. Panelists regularly returned to themes of practicality and cash-flow. Billions of dollars of projects with verifiable income streams are getting funded in the region, while others residential and office projects languish. Education and health care projects are fueling developments, not off plan vacation home shoppers.

Figure 3. CTBUH Public Affairs Manager Kevin Brass leading panel discussion at the summit © Cityscape

One night I was invited to a dinner organized at Capital Gate by Jeff Schofield of RMJM, the lead designer on the project, officially known as the “world’s furthest leaning man-tower.” The swerving Capital Gate tower with the distinctive 18-degree “lean,” is the cover-story for the upcoming second-quarter CTBUH Journal.

Jeff has been entrenched in Dubai for seven years, part of the expatriate community of architects, engineers and construction experts who have made the emirates their home. He creates art in his spare time and has a house in Paris, but he still sees his immediate future in the UAE, which remains the crossroads of the region, where it’s still possible to do interesting work.

Figure 3. Capital Gate, Abu Dhabi © ADNEC

A surprise guest at the dinner was Peyman Askarinejad, the CTBUH country representative for Iran, who spends part of his time working out of Dubai. The conversation veered around the landscape of the UAE’s recent history of development, including the CTBUH’s plans to expand its presence in the region.

Everyone agreed that the UAE development industry is much different than it was a year ago. Select projects are moving forward. There is a sense that short term pain will give way to a more “normal” development market.

But developers are moving away from projects like Capital Gate, which pushed the boundaries for the sake of creating an icon for the city. Flamboyant and eye-catching designs have been replaced with the lean and efficient. It’s the new era of austerity in the UAE, where it’s still possible to buy candy with gold flakes.