Will Abu Dhabi surprise at Cityscape 2006?

Cityscape 2006 is going to be the biggest property show ever in the history of the Middle East. Not only the ever lengthening showcase of Dubai property will be laid out, but new entrants from across the region will be plying their offerings both to the investment community and owner occupiers.

But this year the spotlight will be on Abu Dhabi, and the word is that developers are looking to take full advantage of Cityscape to lure new interest in their market. For behind the scenes there is some concern in the UAE capital that its real estate projects have so far not received the same reception as Dubai.

It is perhaps early days. Dubai launched Emaar Properties in December 1997, while Abu Dhabi's new real estate companies are barely more than two years old. But there has been considerable activity since then.

Major projects

Now the visitor to Abu Dhabi is greeted by huge billboards all over the city proclaiming the latest developments - the 10-kilometre long Al Raha Beach, Reem Island and the towers of the Central Market, to name just three of the biggest.

Take up by the local community has been strong, but developers have yet to see the rush by foreigners and expatriates seen in Dubai. Partly this may be because Abu Dhabi is offering 99-year automatically extendable leasehold for foreigners rather than freehold as in Dubai, and there is a misperception in the marketplace that this is an inferior title.

Abu Dhabi also has to convince investors that it has the right strategy for the expansion of tourism and light industry to attract more residents to live in these ambitious new developments. And the recent promotion of the $175 billion, five-year spending plan has gone someway to alleviating these concerns.

Price reductions?

But it will be interesting to see if the richest emirate can spring a few surprises at Cityscape 2006. There are rumors in the marketplace that four-bedroom villas priced from Dhs1.2 million will be on offer, and that several major new project launches are planned.

If there is any price cutting then this would be watched carefully in the marketplace. One of the key's to the start of the Dubai boom three years ago was a big reduction in prices on the Palm Island which resulted in an overnight sell-out.

It could be that the Abu Dhabi market needs a similar initiative to get things rolling with foreign and expatriate investors. On the other hand, Abu Dhabi may be content to phase its projects in line with demand, which is already huge judging from the local rent rises of the past year.