Building the nation

Al Falah in Abu Dhabi is a major affordable housing project for UAE nationals.

The experience of Al Shafar General Contracting (ASGC) in the region’s construction industry, particularly Dubai, gives salutary insight into how much the market has changed.

One of the top ten contractors in the UAE, ASGC rode the crest of the property wave – a wave that has since crashed and inundated a lot of players. The company was one of the first to embark on large-scale retrenchments of its blue-collar workforce, a decision that allowed it to cut costs dramatically and ride out the worst of the downturn.

A few years later, AGSC is still at the top of its game, though much more streamlined, and with a markedly different strategy. For example, it is now involved with a major social housing project. Housing continues to make headlines, with Abu Dhabi developer Aldar recently announcing it would commence handover of villas at Al Falah by Q1 2012.

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Al Falah is a 5,000-villa community housing project over 1,275ha for UAE nationals, developed as part of the emirate’s 2030 strategy plan. The masterplan comprises five separate villages, with a town centre as the focal point of the development. Mosques, schools and other facilities also form part of this huge project.

A recent report from the Abu Dhabi Gallup Centre revealed that the number of UAE nationals satisfied with the government’s provision of affordable housing had declined over the previous year.

Obviously it takes time for large-scale projects like Al Falah to get off the ground, not to mention the fact that the demand for affordable housing also increases exponentially as the population itself grows. As of 2009, Abu Dhabi had a five-year waiting list for Emiratis applying for affordable housing. This has lead to families sharing accommodation, even though this is frowned upon by the government.

The survey also highlighted dissatisfaction with related problems such as poor location and lack of basic infrastructure. The lesson here is that masterplanning is as important in terms of housing projects as it is with any retail or commercial projects. It is no use planning or building major developments if these are cut off, involve long commutes for residents, or if they lack essential services and amenities.

Dubai, on the other hand, is grappling dissatisfaction related mainly to the application of its Strata Law to multi-tenant tower projects. It was recently reported that residents at Sadaf Towers in the popular Jumeirah Beach Residence were denied access due to unpaid service fees. Tenants in Dubai are often caught in the middle of such disputes, especially when landlords fail to pay over fees to developers.

Despite the myriad problems, the affordable housing market is poised for significant growth in the near future. Expert contractors like ASGC, which have both the capability and resources to deliver projects in this market, have acknowledged that it is an important focus area.

However, it is equally important that governments like Abu Dhabi and Dubai engage with such experienced contractors so that they can leverage the maximum benefit from such developments, and at the same time ensure that the needs of their citizens are addressed as comprehensively as possible.