Four years after construction started, Abu Dhabi’s biggest developer Aldar is looking for tenants to fill some of the 3,533 flats in the imposing three Stonehenge-style linked towers.
Abu Dhabi property demand put to the test as Gate Towers handovers begin on Reem Island
Aldar has started the handover of its vast Gate Towers development on the capital’s Reem Island, a key test of demand for new homes.
It comes as the developer returns to the bond markets for the first time since its merger with Sorouh Real Estate this year with a planned benchmark sukuk sale.
Four years after construction started, Aldar is looking for tenants to fill the flats it owns in the three Stonehenge-style linked towers.
A first group of 60 tenants have been given their keys, with more than 1,000 more apartments coming on to the rental market over the coming weeks.
Aldar said the first tenants had come via a bulk leasing deal with an Abu Dhabi educational establishment. It plans to start marketing other flats in the buildings over the coming days with studios and one-bedroom flats renting for about Dh75,000 a year, two-bedroom apartments at Dh120,000 and three-bedroom flats renting at Dh160,000.
The project, designed by the US architect Arquitectonica, includes the world’s highest penthouse bridge structure, bringing the building to a total height of 245 metres. The bridge contains 21 penthouses, all of which comprise at least 4,000 square feet and most contain their own private swimming pools and gardens.
The scheme comes to the market just as Aldar is hoping to find tenants for more than 1,000 empty rental flats at its 1,538-apartment Al Rayyana complex close to the Abu Dhabi Golf Course on the mainland, which was evacuated last year when a courtyard collapsed. “We have already seen strong demand for the flats in Gate Towers and Al Rayyana,” said Paul Middleton, the executive director for commercial at Aldar Properties. “We are working on another three potential bulk leasing deals and we have had a number of inquiries from people already asking about leasing individual flats.”
The flats come to the leasing market at a time when property brokers are reporting that prime neighbourhoods in the capital are starting to experience an increase in rents after years of oversupply.
The change has been caused in part by an Abu Dhabi Government decree ordering government employees to live in the emirate or risk losing their housing allowance.
Property brokers in Abu Dhabi say that Aldar may face a tough challenge shifting its pricier apartments.
“There is a real lack of studio apartments in Abu Dhabi,” said Drica Rodrigues, the residential leasing manager at Cluttons’ Abu Dhabi office. “The studios will all be let within one month. And we believe the one-bedroom apartments too will be very popular and will be let within three months. However, the market for the two-bedroom and three-bedroom apartments in Abu Dhabi is much slower and we see that developers are worried that there is an oversupply in this market. It’s a big risk.”
With the bulk of apartments at Gate Towers now finished and snagging work on final blocks due to complete over the coming weeks, the developer faces a final moment of truth to find out how many of the investors who shelled out deposits back in the boom years of 2007 and 2008 intend to complete. The company says investors agreed to buy 1,300 of the flats in 3,533-unit complex before the global financial crisis.
“During the financial crisis our priority was our customers,” said Mr Middleton. “We’ve done our best to negotiate to find a payment plan and a price that was right for each investor. The majority of our customers are up to date with their payment plans. We have reduced prices and done our best to help them stay with us.”
Nearly 1,000 more flats were sold off to the Government earlier this year in a deal to help through Aldar’s merger with rival Abu Dhabi developer Sorouh, which was the original developer of the scheme.
The company said it was initially leasing out apartments rather than selling but it could begin a sales campaign depending on market demand.