Aabar Investment, a company controlled by the Abu Dhabi Government, is helping fund the development of a 73-storey luxury apartment building and hotel in New York City. Khadem al Qubaisi, the chairman of Aabar, confirmed the company had paid Extell Development for a majority stake in a project rising at 157 West 57th Street in Manhattan, just a block away from Central Park and next door to Essex House, a hotel owned by the Jumeirah Group of Dubai.
Mr al Qubaisi said the deal with Extell, the company of the development giant Gary Barnett, could be the start of several property projects in New York. "We selected Gary Barnett for our first project," Mr al Qubaisi said, adding that the company was also reviewing other potential property deals in New York. "If things go well, we will start another project." The tower would be the latest expansion of Abu Dhabi's presence in the New York property market. Last year, the sovereign wealth fund Abu Dhabi Investment Council bought a 75 per cent stake in the iconic Chrysler building in midtown Manhattan.
And earlier this month, the UAE Government bought a stalled development project for US$44.7 million (Dh164.1m) at 313-317 East 46th Street. An embassy spokesman said he could not yet divulge information about the Government's plans for the building. The site is located near the UN headquarters. Mr Barnett said the 57th Street development would be "one of the greatest buildings in the last 50 years" because of its prime location and ambitious design.
It would also be a lucrative venture because it would begin to be delivered several years from now, when the market is likely to be back on the upswing. "Things are starting to pick up in New York," he said. "Office space is improving because the financial sector is doing so well. We've seen residential buildings selling at between $5,000 and $6,000 a square foot. Even with the current market still slow, we think it will do extremely well when it is finished."
In Aabar's second-quarter earnings report, the company disclosed that it had made advances of Dh491.5m "to a property developer in order to acquire a majority stake in a development project in New York". Mr al Qubaisi said the Extell project would be a "combination of residential, office and a hotel". "We are negotiating now with hotel operators," he said. A construction document filed with the New York City Department of Buildings in March said the building would include 150 apartments and a 20-floor hotel.
Mr Barnett said the design by the French architect Christian de Portzamparc had recently been finalised. "It will be a very unusual building," he said. The tower would be higher than the three tallest skyscrapers within the area: Carnegie Hill Tower, the Metropolitan Tower, and CitiSpire. The deal will add to Aabar's growing international profile as it transforms itself from a little-known energy investor to a major strategic investment company of the Abu Dhabi Government.
On Monday, Aabar announced it had joined with Daimler to buy 75 per cent of the Formula One team Brawn GP for more than £100m (Dh616.6m). The deal capped a streak of major acquisitions over the past six months, including a 9.1 per cent stake in Daimler and a 32 per cent stake in Virgin Galactic, a commercial space flight subsidiary of the Virgin Group. . Blair Hagkull, the head of the Middle East and North Africa office of the property consultancy Jones Lang Lasalle, said that such an investment in a trophy property project could be lucrative because it was being built during a down period and would probably be delivered as the market began to recover.
"There is only one Central Park," he said. "This is a once-in-50-year downturn. There are a lot of opportunities out there." There is a major focus on investing in distressed properties in London and this will probably shift to include Paris, Singapore and New York over the next year, Mr Hagkull said. @Email:bhope@thenational.ae