Abu Dhabi's Al Maabar to be a new force in global real estate

Sorouh Real Estate, Aldar Properties, Al Qudra Real Estate and Reem Investments have joined forces to create Al Maabar which means the gateway in Arabic. It will locate and execute projects in the rest of the Gulf, North Africa and Europe.

Dr Mounir Haidar, CEO of Sorouh said the new property giant will form a 'formidable' real estate group with strong international competence, noting that uniting efforts would be 'much better than any of the Abu Dhabi developers tapping into these markets alone'.

Other details are sparse with no indication of the capitalisation of Al Maabar or when it is likely to be officially launched.

Fresh approach

Commentators contrasted this approach with the recent rapid expansion of the Dubai developers overseas which has been done on an individual basis and at great speed.

Emaar Properties' $1 billion acquisition of Laing Homes in the US last summer is now seen as poorly timed given the recent slump in the US housing market. And some other recent real estate purchases overseas by Dubai groups also look to have been fully priced if global realty is losing ground.

Abu Dhabi clearly wants to do things differently, and while six years behind its Dubai rivals in the UAE domestic market, a slower approach to overseas expansion could yet work in Abu Dhabi's favour.

For if US real estate slumps further and global realty markets follow then there could be better opportunities for buying property and development interests looking forward.

On the other hand, decision making procedures in jointly owned investment entities can be a problem. One partner may like a certain project in a particular country while another has a different view.

Governance issues

Hence market observers will keep an eye on the corporate structure that emerges as well as the financial assets that it can command. But make no mistake when Abu Dhabi gets involved in foreign investments then very large sums of money will more than likely be involved.

The state Abu Dhabi Investment Authority is reckoned to be one of the world's largest investment funds with an estimated $500 billion under management. If Al Maabar follows in true Abu Dhabi style then it could emerge as a very significant new force on the global stage for real estate investment.

It is not everyday that a major new player in global real estate is born, and Al Maabar will doubtless be greeted with enthusiasm by consultants and overseas developers.