Site visit: Meera, Abu Dhabi
With its Meera development on Abu Dhabi’s Reem Island, Aldar Properties seeks to offer the mid-market real estate segment a residential product that marries affordability with quality
Aldar Properties has built a reputation within the Abu Dhabi property market that is difficult to ignore. After all, the developer lays claim to having as its headquarters one of the emirate’s most distinctive buildings – a circular structure that teases the imagination, looking as though it got caught mid-roll but could resume motion, if only someone would give it a hard push.
It was awarded Best Futuristic Design in 2008, at the Building Exchange Conference held in Spain.
More than its striking HQ, however, the developer is recognised for maintaining a foothold in a number of sectors.
On the commercial side of the spectrum, Aldar is known for variety, having introduced and completed projects that range from hospitality to retail, such as Yas Viceroy and Yas Mall. Meanwhile, at the residential end, the developer’s reputation is largely associated with high-end, premium products.
But change is afoot. This exclusive association may soon begin to shift, as Aldar turns its attention to the affordable real estate segment. This trend first became apparent in June 2015, when the firm launched Meera, its inaugural mid-market development.
A $148.6m (AED546m), G+27 project with a total built-up area of 76,328m2, Meera consists of two identical towers, each comprising 204 units. These units are a mix of one-, two-, and three-bedroom apartments, with prices starting at $250,000 (AED900,000) and going up to $545,000 (AED2m).
Meera is currently under construction at Shams Abu Dhabi, which is also home to Aldar’s Sun and Sky Towers. The developer’s experience in the area gave it insight into the market, resulting in the decision to pursue more pocket-friendly ventures.
Talal Al Dhiyebi, Aldar’s chief development officer, explains: “As we’ve stated numerous times to our investors, the whole affordable market segment is underserved and undersupplied.
“[At Aldar], we see the market segmented into multiple income brackets,” he continues. “Meera was targeted at people belonging to the $5,450 to $8,300 (AED20,000 to AED30,000) salary bracket, and we have been quite successful with it, as the property is sold out.”
Meera started construction in August last year, and is expected to complete in Q3 2018. Aldar is confident that it will meet the deadline because, as Al Dhiyebi puts it, the contractor is “doing a phenomenal job in terms of progress”.
Fibrex was awarded Meera’s main construction package – worth $70.2m (AED258m) – in 2016, while Aecom was brought in to provide consultancy services.
When Construction Week visits the project site, the developer says that work is advancing according to schedule. The project is nearing the halfway mark, with the super-structure for Tower 1 already complete and only one remaining slab to be implemented for Tower 2.
Moreover, mechanical, electrical, and plumbing (MEP) works have commenced, progressing in conjunction with finishing works. Block work has reached Level 20, and Fibrex is proceeding with ceramic, screed, plaster, and ceiling activities, as well as façade work on all of the project’s three elevations: glassfibre reinforced concrete (GRC), aluminium, and glazing.
Commenting on the success of Meera, Al Dhiyebi says there’s more to the equation than the price alone. He notes that various factors came into play, including the location.
Al Dhiyebi describes Shams as one of Aldar’s “most exciting destinations”, owing to its proximity to mainland Abu Dhabi and to what he refers to as “key demand drivers”, such as the financial incubator, Abu Dhabi Global Market.
He further points out that since Shams is an investment zone on Reem Island, projects developed in the area are available to non-residents and expatriates wishing to buy freehold property.
Indeed, a sizable number of Aldar’s buyers for Meera are expats, Al Dhiyebi reveals, remarking: “What was interesting is that a lot of them have been in Abu Dhabi for a long time, but have never had the opportunity to purchase a property that meets their demand.
“Maybe [some] of them have bought small properties as investments to flip or lease, but none of them have had the opportunity to buy a property that catered to their family requirements. So a high percentage of [Meera buyers] are end-users; people coming in specifically to buy the units [to] live in [themselves].”
Interestingly, Meera is not the only Aldar project under development on Reem Island. The developer is also building Reem Central Park, which it plans to open to the public next year. The project, according to Aldar, will come with interactive water features, a skate park, a mosque, and food and beverage (F&B) outlets, among other components.
“We’re not building houses; we are building communities that have that overall lifestyle element to them,” Al Dhiyebi tells Construction Week, adding that Meera residents will live in a neighbourhood that boasts canal walks, schools, a public beach and a public garden, retail outlets, and healthcare facilities.
“People deserve quality accommodation,” Aldar’s CDO adds. “Quality accommodation does not only have to be available in the premium segment. You can have quality accommodation within the affordable segment, and that’s what we are doing.”
Returning to his point about market segmentation, Al Dhiyebi clarifies that the target bracket for Meera does not define the overall affordability target of Aldar, as evidenced by its launch of The Bridges in April this year.
Elaborating, he says: “With The Bridges, for example, we are targeting people who are in the $1,900 to $5,450 (AED7,000 to AED20,000) bracket.
“If you combine our focus with Meera and our focus with The Bridges, that’ll give you an income bracket ranging from $1,900 to $8,300 (AED7,000 to AED30,000), where a huge portion of the population belongs.”
And this is a demographic that is – as Al Dhiyebi emphasises – both underserved and undersupplied.
“When I say underserved, I [mean] with quality products,” he explains. “There are a lot of products that are at similar price points, but those products are in the older parts of Abu Dhabi, while the more mature, developed parts are undersupplied.
“They are underserved in terms of community services, which means lack of access to gyms, swimming pools, and health clubs. They are significantly underserved in terms of parking. A lot of them do not have any basement car parking.
“And they are underserved in terms of general building upkeep. We have seen buildings that are only 10 or 15 years old, but they are not being maintained well,” he adds.
Remarking that there’s no reason developers can’t offer products that balance quality and affordability, Al Dhiyebi says: “That’s the art of the game. Going in, you need to understand the market. You need to understand that quality does not necessarily have to be expensive; [quality doesn’t] mean that you have to have marble floors.
“Every person has a different perception of quality, so you need to understand what this particular segment of the market is looking for in terms of number of rooms, space and layout, size, and access to community facilities.”
Some developers, Al Dhiyebi continues, mistakenly assume that building affordable products means building only studios or one-bedroom units that can be used as shared accommodation.
He tells Construction Week: “Affordable also applies to someone who is earning $5,450 (AED20,000) and has three kids. That person would not be able to fit his family into a one-bedroom apartment. He would need a two- or three-bedroom unit. And sure, there might be a price point that can meet that need, but is that price point coupled with the quality he aspires to achieve? No.
“That’s what projects like Meera will provide. It’s a need that was previously unsupplied and, again, [the projects are] in downtown Abu Dhabi. A lot of people deliver low-cost homes by moving 50km or 100km outside the city. This is right in the heart of Abu Dhabi, in one of the denser areas of Abu Dhabi Island.”
Aldar’s experience with Meera and The Bridges has assured the firm that increasing its focus on affordable, mid-market projects was the right decision to make.
Al Dhiyebi ends by highlighting that the developer’s affordable ventures will not end here. He concludes: “We’re seeing a lot of demand from customers, so we have plans to do more. In fact, a lot of our new pipeline is going to be focussed on this segment.”