Cityscape needs emphasis on the real
Has Cityscape Abu Dhabi changed to meet new market demands?
Cityscape Abu Dhabi happens in mid-April. There was a time when the Cityscape branded events that concentrated on the UAE were seen as essential events for everyone in the industry.
They were part real estate fair, with queues of paying punters ready to buy just about anything off-plan, part design fair, with endless detailed models of the bright, cleverly designed and record-breaking future to come. But that time has certainly passed.
A more business-like air has settled on the event since then. Words like transparency, delivery and completion have replaced the hyperbole of biggest, tallest and longest. The show also has a new cousin, CityBuild, which moves back down the property supply chain, to get closer to the construction industry.
In the accompanying conference there is an emphasis on investment, diverse sectors and market fundamentals. With subjects like building a viable business model for low-cost housing on the agenda it’s easy to see how things have changed from the days when developers ran short of things to sell.
Other issues include getting money back into the mortgage market and the impact of Abu Dhabi’s transport master plan on real estate development.
“The market has changed substantially,” said Chris Speller, group director for Cityscape. “Now it is more what’s actually happening and what is around the corner. ‘Buy this here’ is not what the show is about and not the message developers want to portray at the moment.”
“[The show] will look at areas where there is direct demand, such as Emirati housing and hospitality. It’s not about turning up and throwing a cheque book around.”
Essentially these and other issues are a search for real value. What is the product of the property development industry worth?
There’s a pragmatic answer to this, as property analysts Jones Lang LaSalle have recently suggested, in terms of defining real value through accurate and consistent valuations. Credible valuations are part of making the market transparent and in turn attracting foreign and institutional investment.
In its March 2010 MENA House View, the company suggested ‘the lack of regular, accurate and professional real estate valuations results in enhanced financial risk exposure to a diverse spectrum of stakeholders’. This is a key factor that will continue to influence where investment comes from.
“In the current environment of suppressed demand we don’t expect to see the hoards of speculative investors that we saw in the boom years of 2007 to 2008,” said David Dudley, head of Jones Lang LaSalle Abu Dhabi Branch. “We expect to see a calmer audience gathered to get an update on development projects and to exchange views on the status of Abu Dhabi’s real estate markets.
“We also expect to see some high profile announcements on the progress of major development projects, but the general themes will be around joint ventures and partnerships rather than speculative investment.”
Looking at the more intangible element of value is something architects must do. Architects who choose to tout their skills at Cityscape must be able to demonstrate how they can design for the emerging regulatory and economic environment. Moreover, they must show that they can produce designs that can be delivered.
“Any architect at the moment needs to show the reality of what has been achieved and what they have done, within their portfolios,” said Speller. “There are still a lot of developers looking to create projects that will stand out in the market. They are wise with their spending and want to incorporate the names of architects that have something new to offer.”
Cityscape Abu Dhabi is expected to be an international show, with professionals coming to meet international investors. Similar style audiences are expected in Jeddah and Riyadh later in the year, with the Dubai edition of the show being pitched as the global event for emerging market real estate.
Three giants of Abu Dhabi development
Aldar Properties is an Abu Dhabi-based property, development, management and investment company. It was listed on the Abu Dhabi Securities market in 2004. Aldar was established to support the region’s infrastructure through the creation of high quality, attractive and sustainable communities equipped with residential, commercial, retail, leisure, hospitality, education and medical facilities. Aldar’s portfolio includes developments in Abu Dhabi including Yas Island, Al Raha Beach and Central Market. The company owns over 50 million m2 of land in strategic locations throughout the emirate.
Mubadala Real Estate and Hospitality (MREH) is a business unit of Mubadala Development Company. With a mandate to drive the long-term development of Abu Dhabi and deliver key projects within Plan Abu Dhabi 2030, MREH develops strategic real estate and hospitality projects including large scale commercial, residential and leisure districts. Key projects include the development of Sowwah Island - the core of Abu Dhabi’s new Central Business District, Sowwah Square, and the Mina Zayed Waterfront.
TDIC is one of Abu Dhabi’s leading developers and the name behind many projects including Saadiyat Island, a 27km2 natural island lying just 500m offshore Abu Dhabi City, which is being transformed into a leisure, cultural and residential destination. TDIC is also behind the Desert Islands - one of the world’s largest sustainable island tourism destinations, under development in its western province.