Tourism Development and Investment Company (TDIC), the flagship developer of cultural and residential projects in Abu Dhabi, is hoping to sell parcels of land on its flagship Saadiyat Island project to foreign sovereign wealth funds.
The government-owned developer building Abu Dhabi's much anticipated cultural district told The National that it was in discussions with overseas funds to invest in land at its 27 square kilometre island, which lies 500 metres off the coast of Abu Dhabi.
"We are talking to sovereign funds for them to come and invest in Saadiyat. I can't say which funds yet and it is at an early stage but we are talking with them about buying plots of land on Saadiyat," Ahmed Al Fahim, the executive director of sales and leasing, said at the Cityscape Global exhibition in Dubai this week.
"They would be sovereign funds."
TDIC has been working on plans to develop the prestigious Saadiyat Island scheme since its inception in 2006. Ambitious plans for the island include branches of the Louvre and Guggenheim museums, a campus for New York University and homes for 145,000 residents.
Plans for the development were put under review during the global economic downturn but Mr Al Fahim said he was seeing signs the market was recovering and it was keen to press ahead with its plans.
The Executive Council earlier this year approved funding for the construction of the Louvre and Guggenheim museums, as well as the Zayed museum on the island.
Investment by sovereign wealth funds into other projects on the island would likely speed up TDIC's plans and allow it to press ahead with its ambitious projects.
"We are recovering now. Once you witness an increase in transactions and market is recovering then we will start to master plan again what we want to build next," he said at the sidelines of the Cityscape Global event in Dubai this week, where buyers of new projects pointed to a rebound in the real estate markets.
"What's happening in Dubai is repeated also in Abu Dhabi. In 2011 for the whole year we sold 16 villas. And in 2012 we didn't finish the year and we've sold 72 villas so that gives you the real picture that really there is an increased interest in properties. Mainly they were on our project on Saadiyat. This is the first time after two years we are participating in Cityscape, obviously because we see that the market is coming back and there is increasing demand so we thought this is a good opportunity to be here."
Mr Al Fahim did not detail which land parcels might be on offer to investors.
Investment from overseas would also shore up TDIC's balance sheet, after years of investment in infrastructure and other investment on the island. In June the company announced it made a loss of Dh1.2bn last year, following a loss of Dh1.15bn in 2010.
However, TDIC ended last year with more than Dh2bn in cash on its balance sheet and Mr Al Fahim was hopeful that the company would be turning a profit in the coming year as it progresses with its plans on Saadiyat and the Eastern Mangroves.
The company last month started leasing its 285 one, two and three-bedroom apartments at its Saadiyat Beach Residences, which Mr Al Fahim said were in high demand. And three weeks ago its announced it was selling 29 villa plots at Saadiyat Golf Views.
"The rents start from Dh70,000. We have people coming and signing contracts. So far we have signed about 20 contracts. We are expecting a lot of demand; we have big companies and we have individuals taking leases - whatever comes."
"We are looking at going into another phase of villas and another phase of apartments because we see demand on Saadiyat," he added.
lbarnard@thenational.ae
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Rating: 4/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Squid Game season two
Director: Hwang Dong-hyuk
Stars: Lee Jung-jae, Wi Ha-joon and Lee Byung-hun
Rating: 4.5/5
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
6 UNDERGROUND
Director: Michael Bay
Stars: Ryan Reynolds, Adria Arjona, Dave Franco
2.5 / 5 stars
