Despite their relative close geographical proximity to one another, the differences in business thinking between Abu Dhabi and Dubai are demonstrated by the two cities’ real estate markets. Just an hour’s drive apart, the two biggest cities in the United Arab Emirates are experiencing great differences in the rate and manner of growth in the property sector.
Abu Dhabi is a place where the sector experiences a lot of help and involvement from the government in its urban developments, and this isn’t a bad thing in many ways. It was at this year’s Cityscape exhibition that its urban planning council was lauded. In contrast, Dubai has a much more relaxed attitude towards development, with more ‘free-wheeling’ forming a lot of the property investment evolution.
As a result, there are also big differences in rent statistics in the two places according to Jones Lang LaSalle, the real estate consultants. In the last quarter, Dubai rental figures increased 26% on the same period last year, compared with 11.5% in Abu Dhabi.
Head of research and consultancy at CBRE Middle East, Mat Green, suggested that government intervention coupled with economic growth had led to “a rebound in residential activity” in the city. He said that investment in healthcare and tourism will lead to further growth in Abu Dhabi. Green said: “With rising business confidence in the capital and recent expansion in sectors such as finance, hospitality, aviation, healthcare and tourism, the residential sector looks set for a period of sustained price and rental growth.”
Michelle Scholly, an estate agent at Crompton Partners, has said that Abu Dhabi provides a “safer investment” than Dubai and is better for “conservative investors who don’t like a risk”.
Indeed, Abu Dhabi properties are considered to be a more stable option than Dubai properties for sale, which is often associated with speculative investments. This was reflected in the fact that the downturn was more evident in Dubai than anywhere else in the UAE. William Neill, head of the Abu Dhabi office at Cluttons property consultancy, said: “Abu Dhabi is different in demographics, different in geography, different in outlook.”
He continued: “I don’t think you will see the real fast rises and drops that Dubai is prone to and gets affected by. What happened in Abu Dhabi (during the downturn) is more in line with what happened to global markets during the recession.”
While there are differences, it seems that the two cities both have great options available, it just depends on the type of investor. As one visitor to the Abu Dhabi Cityscape noted, the Abu Dhabi market is a stable environment, but “the market in Dubai is very good as there are more options than in Abu Dhabi.”