10,000 villas needed in Abu Dhabi, says Aldar

The Al Falah government housing project. Ryan Carter / Crown Prince Court

Abu Dhabi could require as many as 10,000 new villas to match its housing needs for middle-income Emiratis, according to estimates from Aldar Properties.

The developer, based in Abu Dhabi, is handing over Al Falah, a residential housing development consisting of 4,857 villas.

"We've already delivered 2,080 villas and the rest of the villas will be delivered by the end of the year," said Mohammed Al Mubarak, Aldar's deputy chief executive.

While there is an oversupply in the private-sector rental market, Mr Al Mubarak said social housing needs could total as many as 10,000 homes for Emiratis.

"When we originally started this project there was a massive demand for housing from locals," he said. "With the market, there are some things oversupplied and some things which are under-supplied. We really feel this market has some demands that are not being catered for."

Spread across a 12.5 million square metre area to the east of Abu Dhabi International Airport, the Al Falah development is intended to house about 60,000 Emiratis.

Local amenities, including mosques, parks, convenience stores and police stations, were designed to be no more than 500 metres away from each home.

Every last detail, right down to the size of kitchens, was decided upon in conjunction with the Government.

"On this project the choice was right and we delivered on time and better than budgeted," he said. "That should put us in a very strong position" to compete for others, Mr Al Mubarak added.

The Al Falah development is part of Abu Dhabi's Economic Vision 2030 for and is being provided free to Emiratis by the Government, which will bear the cost. Abu Dhabi Urban Planning Council is seeking to provide 13,000 new properties to Emirati families by 2015.

Aldar generated sales of Dh4.6 billion (US$1.25bn) in the second quarter of the year, more than five times the same period a year earlier, as it handed over a number of villas to the Government, which will grant them to the public. Aldar currently has Dh12bn of announced asset transfers to the Abu Dhabi Government.

Private-sector residential rates in the capital have fallen by a quarter during the past year as new supply enters the rental market and prospective tenants have more ability to negotiate with landlords, according to estimates from CBRE.

"Deflationary pressures are likely to persist during the second half of 2012 as new supply continues to outpace growth in demand and heightened competition aggravates already falling rents."

Aldar Properties and Sorouh Real Estate announced in March they would study a merger with the "blessing" of the Abu Dhabi Government, effectively uniting the two biggest private-sector developers in the emirate with combined assets worth about $15bn.

twitter: Follow and share our breaking business news. Follow us

iPad users can read the digital edition of business section as it was printed via our e-reader app. Click here