Mubadala Real Estate agrees deals for seven plots on Al Maryah island
Master developer says heads of terms have been concluded for 150,000 square metres this year, up from 14,000 sq m last year
Mubadala Real Estate and Infrastructure reached agreements with developers to sell seven plots of land on Al Maryah Island, according to a key executive.
The island's master developer has agreed terms on six residential and one school plot with a gross floor area of 150,000 square metres. This compares with just one 14,000 sq m plot sold last year and is indicative of the momentum building in terms of the island's development, according to Mubadala Real Estate and Infrastructure's executive director, Ali Al Muhairi.
"We actually had to refresh ... our pricing strategy. The days of 2007-08 and those ridiculous prices are not there anymore. So we had to step back and we have to be realistic and say 'OK, this is what the price is in Abu Dhabi, this is what the price is in Al Reem. We know that we are a premium to Al Reem but we may not be double [the price]'," he told The National during an interview, although he did not reveal the amounts for which plots had sold.
Mr Al Muhairi had earlier told journalists that progress was being made both in terms of lettings and infrastructure. Occupancy at Abu Dhabi Global Market Square's four office towers now stand at 75 per cent, a growth of 15 per cent year-on-year. More than 65 companies have moved to the financial free zone within the past 18 months, he said, including Citibank, BNP Paribas, State Street and WeWork.
"Two years ago we only had two towers leased at 80 per cent. Now we are 75 [per cent] for all four," he said.
The island's Four Seasons Hotel, which has been open for three years, has an occupancy rate of 70 per cent and the six-year old Rosewood hotel has an occupancy rate "in the mid-80s", the company said. The 251 branded serviced residences operated between the two hotels have typically run at an occupancy rate of over 90 per cent.
"The rates we command for those are one of the highest in the city," said Mr Al Muhairi.
He also pointed to the recent opening of the extension of the Galleria mall, where 210,000 sq m was added to the existing 30,000 sq m facility on September 4. Since then, some 4.7m people visited in September and October, he added. Although the extension currently has an occupancy rate of just 60 per cent, he expects this to increase to 80 per cent by the end of next year.
Al Maryah Island is a 116 hectare island with an anticipated 3.52 million square metres available for development over four phases. The first two phases under development comprise 6.74 hectares, with just over 2 million square metres available for development. Of this, 933,351 square metres has been developed so far.
"We knew that people are willing to come … but they want to invest in a place that is ready to invest in," he said, adding that in the past year connectivity between Al Maryah and Abu Dhabi islands has been improved with the addition of new bridges.
"I look at 2019 and when I see a big jump in the uptake of office space, when I see a big jump in terms of plot sales throughout the year and when I see high occupancy rates on residential, to me these are good indications that the real estate market is in good shape, at least for the island itself. No developer will come and buy without knowing they can actually sell it forward," he said.
"People might say 'we don't see it today in the market' but usually any developer that buys a plot takes three years for everything to be completed. Developers or investors see that the indications are positive and they see that there is an upside coming down the road."
Updated: December 14, 2019 09:03 AM