Developers are limbering up to bid for the chance to develop and operate a 1.6 million square feet traditional style tourist souq next to Abu Dhabi's iconic Sheikh Zayed Grand Mosque.
Abu Dhabi Municipality, the landowner, said that more than 20 investors and developers had expressed interest in the multimillion-dirham project to construct and operate the waterfront souq between the bridges on the south of Abu Dhabi island that is considered one of Abu Dhabi's biggest development opportunities to come to the market since the downturn.
As well as providing Abu Dhabi with a souq built along the lines of Madinat Jumeirah in Dubai, the scheme, which has been earmarked by the Municipality to become one of Abu Dhabi's biggest tourist attractions, will also include abra tours, cafes and restaurants, entertainment and leisure outlets, combined with an open air performance space and hotels.
The Municipality intends to develop the souq in partnership with a private-sector partner through a so-called build-operate-transfer model where a developer would build and operate the souq, most probably by taking out a musataha or 30-year development lease. The selected developer will then pay an agreed ground rent to the Municipality for the remainder of the contract.
Local property agents say the winning bid will be evaluated for both technical and financial strengths by a Municipality judging panel.
"This is the sort of major opportunity that is likely to attract developers throughout the UAE and the region," said one broker. "You're likely to see interest from some of the big names out there like Majid Al Futtaim or Aldar Sorouh as well as bidding from private family-owned local developers." Bids are expected to be submitted during the next few months and the project is slated to be completed by 2018. In a statement, the Municipality said that it was in discussion with a range of strategic partners to determine important infrastructure requirements for the project, such as electricity, water and sanitation and marketing.
"We strongly believe that the new traditional souq project in Abu Dhabi will provide further investment opportunities for the private sector," said Rashed Bin Ali Al Omaira, the adviser for investments and assets for the general manager's office at Abu Dhabi Municipality.
The news comes as the Statistics Centre Abu Dhabi announced that a total of 1,842 new buildings were completed in the emirate of Abu Dhabi during the first quarter of this year - a 23 per cent increase on the same period the previous year. However, the number of new homes built in the region fell 6.2 per cent to 2,461 homes.