Sorouh allows foreign shareholders

The first was the legislation on property ownership itself which established freehold ownership rights for nationals and 99-year leasehold rights for non-nationals. And last month Aldar Properties became the first Abu Dhabi listed developer to announced non-national ownership of up to 40 per cent of its equity.

'According to article (2-7) from the company's charter and founding principals; the Board was within its legal rights to allow non - UAE nationals ownership of a certain percentage of the company's share, as the law regulates,' said Saeed Eid Al Ghafly, Chairman of Sorouh's Board of Directors.

'In accordance to the company's interest, Sorouh's Board of Directors has voted to allow non-UAE nationals to own 20 per cent of the company's shares, which is both for the benefit of the company and its shareholders.'

Foreign shareholders

Thus the two largest quoted Abu Dhabi property developers have now gone down the foreign ownership route, and will welcome foreign shareholders up to a prescribed limit.

This is a long way from the days when the late Sheikh Zayed decreed that 'not one grain of sand' in Abu Dhabi would ever be owned by a foreigner, although his successors are still not allowing any direct foreign ownership, retaining an important level of control.

However, both Sorouh Real Estate and Aldar Properties have substantial multinational management teams able to draw on the best of international best practice. Having foreign shareholders keeping an eye on their investments will only reinforce this trend, and greater transparency will result.

Richest city in the world

The suitability for Abu Dhabi for global investors is not doubted. One recent survey dubbed Abu Dhabi the 'richest city in the world' with $17 million in assets per capita.

Money attracts money and Abu Dhabi looks to be a very strong real estate market in future years. There is certainly scope for rental yields to fall to global levels against a background of greatly enhanced capital values in a secure and stable market.

It is all about correcting an anomaly in shifting from a closed and controlled property market, in which even Abu Dhabi residents could not sell their own property, to something far closer to the normal modern real estate market seen in any advanced economy.

In this process there will always be winners and losers but in such a clear economic reform scenario there are usually a lot more winners than losers. For the losers in the Abu Dhabi case you will probably have to go to neighboring Dubai which is going to suffer from the rival attractions of a great investment opportunity on its doorstep.