Aldar Properties has started marketing space in Trust Tower, one of the largest office buildings in Abu Dhabi and a centrepiece in plans to maintain the capital's downtown as the primary central business district.
The 59-storey Trust Tower, part of the Central Market complex, is competing with new developments around the capital, including Sowwah Island and the Capital Centre, next to the Abu Dhabi National Exhibition Centre.
"Downtown is still attractive to many companies," said Rami Nasser, the director of sales and commercial leasing for Aldar. "They still want to be downtown for the proximity to government buildings and the proximity to residential areas."
Trust Tower is entering a competitive market. Overall office rents in the capital fell 29 per cent in the first quarter compared with a year earlier as more office projects were built, according to Cushman & Wakefield.
The volume of available office space in Abu Dhabi is expected to grow by 50 per cent in the next two years. A total of 1.3 million square metres of office space is under construction, which will add to 200,000 sq metres of vacant space, according to a report released yesterday by Asteco, a property management company. Most of the new space is outside the downtown area, which is undergoing a redevelopment effort.
"The Municipality wants to make sure central Abu Dhabi doesn't become a ghetto," said Rupert Bowen-Jones, the senior surveyor for CB Richard Ellis, a property consultancy. "They see other areas as a complement to downtown." Trust Tower, designed by Foster & Partners, offers 72,000 sq metres of office space. The Central Market complex includes: a souq, which is already open; the Domain, a 474-unit residential tower; and two hotels.
Trust Tower is expected to open for business in the second quarter of next year, with the Domain scheduled to finish by the end of that year.
Aldar is marketing Trust Tower as one of the few Grade A buildings in Abu Dhabi. Such amenities include an "intelligent" facade to control temperatures, high-tech lifts and flexible floor space.
"The flight to quality will happen," said David Quinn, the head of agency for Cushman & Wakefield. "I would be concerned if I had an older shabby building downtown."
Many of Trust Tower's prospective tenants are companies already in the city looking to upgrade from their existing buildings, Mr Nasser said. A new regulation preventing businesses from operating out of villas should help to provide clients for the building. "There is a big demand for companies operating in villas to relocate to real offices," Mr Nasser said. Aldar adjusted its marketing plans during construction to target more small businesses, he added. Trust Tower offers spaces as small as 260 sq metres.
"We originally focused on larger tenants. However we realised there is a need in the market for smaller spaces," Mr Nasser said.
Some tenants will come from companies with established operations in Dubai that avoided Abu Dhabi because of the prevailing high rents. "Companies primarily focused in Dubai realise the potential for growth in Abu Dhabi," Mr Nasser said. In the past, building owners typically pre-leased projects during construction. But strategies have changed in the financial downturn, which stalled many projects.
"People want to see the building ready," said Claire Hughes Munro, Aldar's senior manager of commercial leasing.