Abu Dhabi five-year plan to underpin real estate market confidence

The Abu Dhabi Executive Council, which unveiled the strategy, said the main aim is to 'achieve prosperity for citizens and expatriates to make Abu Dhabi a better place for work, residence and tourism'.

Government departments are to be regularly monitored to ensure they are contributing to 'opening up the economy, achieving sustainable economic growth and turn Abu Dhabi into a globally attractive investment, economic and tourism centre'.

Over the next five years the emirate is committed to spending $275bn on infrastructure and real estate projects, with heavy investment in both the oil and non-oil sectors of the economy.

Tourism

Tourism is one focus for non-oil investment. The Abu Dhabi Tourism Authority is targeting 3.5 million tourists a year by 2015 and by then the UAE capital will have 26,000 rooms as well as attractions like the Louvre Museum, Guggenheim Museum and the Yas Island entertainment district.

It is this huge commitment to domestic inward investment that also makes Abu Dhabi a magnet foreign investment. Last year the emirate boasted a GDP of $110bn, up from just $40bn in 2001, thanks largely to high oil prices and booming oil revenues.

The Abu Dhabi Investment Authority has also been in the news recently as the world's largest sovereign wealth fund with estimated assets of around $850bn. This is the legacy of 40 years of oil and gas production by a country which still holds some 10 per cent of the world's oil reserves.

It is perhaps not so surprising against this background of wealth that the new generation of leaders wants to leave their mark in the shape of a physical transformation of the urban landscape.

Playing catch-up

The next five-year plan should be seen in this context. There is also a sense of urgency in wanting to catch up with neighbouring Dubai, and to surpass some of its rival's achievements as well as to strike a new national identity for the UAE.

The question for real estate investors is whether this legacy offers commercial opportunities in the long-run, and that it does not fall victim to building on a monumental scale for the purpose of creating monuments. So far early speculators in off-plan property have turned a handsome profit, and the future looks bright.

However, the proof of great visions is always in their realisation, and there will always be sceptics who will not believe that Abu Dhabi can really pull off its vision of the future until it has proven them wrong.