Cleveland Clinic Abu Dhabi has signed a deal with Aldar Properties to lease 607 apartments in the capital as an influx of new workers pushes housing rents even higher.
Aldar said that the agreement, which involves more than a quarter of the 2,120 homes the property developer has rented out through bulk leasing deals over the past year, includes apartments in its Gate Towers development on Reem Island and its Al Rayyana development in Khalifa City.
Its shares closed 2 per cent higher at Dh3.95 each in Abu Dhabi yesterday.
Aldar signed the multimillion-dirham deal for staff accommodation with the Abu Dhabi strategic investment fund Mubadala, which owns 100 per cent of Cleveland Clinic Abu Dhabi. Mubadala also owns 29.75 per cent of Aldar.
The news comes as housing rents in Abu Dhabi continue to rise, pushed up by a lack of new supply following the global financial crisis, a spate of new jobs created by government projects and rules mandating that government workers live within the emirate or risk losing their housing allowances.
In the three months to the end of June, annual rents for mid-market properties in investment areas in the capital rose by about 5 per cent, the real estate agent Asteco reported last month.
The agent said that in June a one-bedroom flat let on the open market in the Shams area of Abu Dhabi, where Gate Towers is located, would fetch between Dh95,000 and Dh120,000 a year and a one- bedroom flat in off-island locations such as Khalifa City and Mohammed bin Zayed City would fetch between Dh40,000 and Dh60,000 a year. However, property developers are understood to offer substantial discounts for bulk leasing deals.
About 60 per cent of the 1,537 homes at Al Rayyana and 45 per cent of the 991 apartments at The Arc at Gate Towers are currently leased through bulk deals including the Cleveland Clinic agreement, Aldar said.
“Leasing activity has been very strong this year, helping to strengthen our recurring income portfolio,” said Mohammed Khalifa Al Mubarak, the chief executive of Aldar Properties. “Abu Dhabi’s strategy of economic diversification and well-planned development is creating significant demand for high-quality, modern residential property.”
Property agents in the city reported that bulk-leasing deals in the capital were galloping ahead of new supply, pushing rents higher.
“There are new units being released on to the market in Abu Dhabi but almost immediately they are being hoovered up by big government-backed companies such as Cleveland Clinic [Abu Dhabi], Etihad Airways or the new Midfield Terminal airport [project], all of which mean a big increase in the population of Abu Dhabi at a time when there is not enough supply to keep rents stable,” said Ben Crompton, a managing partner at Crompton Partners estate agents.
“These government projects get preferential terms from landlords with cheaper rents and better terms and often they are signed up even before the properties come to the market,” he added. “The result is that existing tenants are looking to move further out of the capital or to downsize in order to pay affordable rents.”
Cleveland Clinic Abu Dhabi said that the deal reflected its goal of finding high-quality accommodation for new employees in the capital, which was essential for attracting new staff to come and work in the facility.
Earlier this summer the hospital reported that about 5,500 doctors applied for the 175 positions at the hospital, which is expected to open on Al Maryah Island next year.
“Being able to attract and retain the most qualified caregivers is essential to Cleveland Clinic Abu Dhabi’s world-class medical care offering,” said Dr Marc Harrison, the chief executive of Cleveland Clinic Abu Dhabi.
lbarnard@thenational.ae
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