UAE: Developers have always argued that the government’s involvement is the key to growing the momentum of the real estate industry and as the United Arab Emirates shows, they are not far off the mark, writes FERDINAND MWONGELA
Ladies and gentlemen, welcome to Abu Dhabi International Airport,” intoned the flight purser on Kenya Airways’ inaugural flight to Abu Dhabi, the capital of the United Arab Emirates (UAE).
Making its maiden visit to the city sweltering at more than 40 degrees Celsius, this was another feather in the national carrier’s cap. But it is the magnitude of real estate development in this part of the world that would have Kenyan developers swooning.
Neat, symmetrical and towering, Abu Dhabi looks more like an artist’s impression of a development than the actual brick and mortar thing.
A guide proudly states that the city is reducing reliance on oil, standing at only 30 per cent with the remaining 70 per cent contributed by real estate, tourism and other industries.
Knight Frank’s Prime International Residential Index says that growth in Dubai was aided by “lower prices and underpinned by its location as a strategic hub, able to attract wealth from the Middle East, North Africa, the Indian subcontinent and central Asia.” The guide points to a site and proudly states that the head of state has promised to put up a $2 billion (Sh172 billion) project including apartments and hotels.
Looking at local papers, stories abound of this or that project being undertaken by the different municipalities in conjunction with the private sector. One such is a community structure being built by the Abu Dhabi Municipality to include parking facilities, retail and leisure options.
“The (Abu Dhabi) Municipality has recently announced a slew of projects that it expects to develop under similar partnerships with the private sector,” reported the Gulf News newspaper.
Not far away in Dubai, His Highness Shaikh Muhammad Bin Rashid Al Makhtoum, the Vice-President and Prime Minister of the UAE and ruler of Dubai, was reviewing and approving the construction of projects that included a maritime museum and a mini world park, according to Gulf News. This project is to be carried out by the Dubai Municipality.
The UAE is full of such projects, with the government taking the lead in virtually all the areas and many mega projects or partnering with the private sector.
This level of involvement and commitment is what Kenyan developers argue would help grow the sector and tame prices and interest rates.
Peter Muraya, CEO of Suraya Properties Group Ltd, argues that government involvement is vital to aiding developers, with infrastructural development and incentives, and giving the final buyer a lifeline.
The Government, on the other hand, says it is committed to infrastructural development.
Priority
“The Government is prioritising infrastructural development in its short term plans, as indicated in the recent Budget Speech for the 2013/14 financial year; and in the long term as outlined in the country’s national development blueprint Vision 2030. We are continually investing in modernising and expanding our roads, ports, airports and other infrastructural channels in an effort to re-invigorate inclusive growth and move the country to the next level,” says Engineer Michael Kamau, the Cabinet Secretary for Transport and Infrastructure.
