2011 is to be the year of Reem Island say developers who finally believe they will be able to handover thousands of new homes.
Optimism as home handovers draw near
About 6,000 homes on Abu Dhabi's Reem Island and Raha Beach are expected to be handed over to buyers this year in what is being hailed as evidence that buyers can trust companies to meet expectations.
Developers and executives in property-related businesses yesterday said the delivery of finished homes marked not only an expansion of the city beyond Abu Dhabi Island, but also a sign that confidence is returning to the property market.
"We see 2011 as the year of residential delivery," said Philip Ward, the chief executive of Abu Dhabi Finance, the largest mortgage provider in the capital. "There have been a number of delays. Now there are signs that units will be delivered soon."
Mr Ward said the handovers would lead to new transactions, including buyers from 2008 seeking mortgages to make their final payments or resales.
The three main developers of Reem Island - Sorouh Real Estate, Tamouh Investments and Reem Developers - said the island was about to take a major step forward.
Gurjit Singh, the chief operating officer of Sorouh, said the company had already handed over 58 offices in its Sun and Sky towers on Reem Island and would begin transferring homes to buyers next month.
"Delivery is key," Mr Singh said. "It instils confidence in developers and the market."
Tamouh, the developer of Marina Square on the other side of the island, is also preparing for handovers.
The original plans for the island were for a forest of towers that would house about 200,000 people, but some of those buildings have been cancelled after the global financial crisis.
Reem Developers reduced the size of some of its buildings and decided to use open space and "lifestyle" elements as the main attractions for its Najmat development. The company has also announced a small villa development and a Nobu hotel for its section of the island.
"When you look at the whole government plan for Abu Dhabi, Reem Island is going to be critical," said Bambang bin Kajairi, the chief executive of Reem Investments, which is the parent company of Reem Developers. "It complements the island and the central business district on Sowwah Island."
The lack of deliveries has held up transactions in Abu Dabi property, Mr bin Kajairi said.
"At the present moment, a lot of people have bought units," he said. "It is very important for the handovers [to take place]. It shows buyers that if you invest in something in Abu Dhabi, you can take possession of it and live in it. Real estate is about confidence."
Developers have not disclosed the cause of the delays in delivery, but people involved in projects have pointed to the huge task for the Government to certify buildings and ensure they fit in with other plans for the capital, such as the transport master plan.
Original handovers were scheduled to start last July but were pushed back repeatedly.
Tariq Sultan, the chief executive of Bunya, an infrastructure company co-owned by all three of Reem Island's developers, said while building may have slowed in some areas, installation of roads, power lines and other elements required for projects had gone ahead.
"We are ahead of the game," Mr Sultan said. "We have not slowed down our infrastructure works at all. The only thing that has come up is looking at our plans so that we can fit in with the Government's plans."
Aldar Properties, the developer of Raha Beach, was also planning to finish more phases of the project this year.
Sami Asad, the chief executive, said last week that deliveries would drive transactions in the market because buyers wanted to see the homes they could live in before making a decision.