The cost of Masdar City is expected to drop by as much as 15 per cent, or Dh3.3 billion, as the project adapts to a slower property market.
Masdar City overhaul cuts $3.3bn from costs
The cost of Masdar City, Abu Dhabi's signature carbon-neutral development, is expected to drop by as much as 15 per cent, or US$3.3 billion (Dh12.12bn). The savings will come as the project adapts to a slower property market, its chief executive said. A 10-month review of Masdar identified technology choices that are now not viable and pushed back the huge project's completion date. Costs, previously estimated at $22bn, were reduced significantly as a result of the review, said Dr Sultan al Jaber, the chief executive of Masdar, which is wholly owned by the Abu Dhabi Government.
"Based on the revisions in the master plan and without scaling back and without scaling down … our numbers today show me that there has been about a 10 to 15 per cent reduction on the overall cost of the project," he said. "This was not the drive behind the revision of the master plan. The drive was not to look for ways to cut our costs." The cost decrease was linked to a fall in prices for contractors and building materials, Dr al Jaber said, although he emphasised the estimate could change again over the next 10 to 15 years.
Masdar had to adapt to a property market in which growth was significantly slower than when developers broke ground on the project in 2008, said Alan Frost, the director of Masdar City. "The market has changed. We need to acknowledge that," he said. "In some ways, not having built a whole lot of stock has allowed us to reassess the market." Potential tenants are now seeking smaller apartments and are more concerned with paying less for district cooling and utilities, he said, both factors that would bode well for Masdar.
The six buildings that opened on site last month use 51 per cent less electricity than a typical Abu Dhabi building of the same size and 54 per cent less water, Mr Frost said. They are powered during the day by electricity from solar panels on the buildings' roofs and in an adjacent lot. The first stage, which will include existing buildings plus a surrounding neighbourhood and the Masdar headquarters, will comprise about 8.5 per cent of the total city area and feature more purpose-built space to cater to corporate tenants, he said.
The first stage is now scheduled to be completed by 2015. A phased approach and a flexible deadline for the later stages would allow Masdar to adapt to the demands of the market, he said. "We're not going to be tied into a rigid timeline." Masdar has registered 70 companies to join the free zone at the development, said Ahmed Baghoum, the director of city operations at Masdar. email@example.com