Having collected Dh400 million from sales of the first two towers of The Bridges during last month’s Cityscape Abu Dhabi, Aldar Properties now plans to open sales for a third tower this month. Around 70 per cent of buyers are young families and under 40 years old, according to Talal Al Dhiyebi, chief development officer of Aldar Properties.
The Bridges, a 1,272-unit mid-market project, is designed to meet consumer expectations, says Al Dhiyebi, adding that Aldar plans to more mid-market communities with attached lifestyle amenities. Aldar also wants to market to untapped buyer segments in the GCC and even in South Asia.
How was the response to The Bridges?
The response significantly surpassed our expectations. It’s the first time in many years that we were actually selling at Cityscape [Abu Dhabi]. Usually, we showcase our product there, market it and open sales later. We didn’t have time to do that.
We totally sold off two towers at The Bridges with Dh400 million in sales. These are not reservations, but executed sales agreements with the first down payments encashed.
It proves the resilience of the Abu Dhabi market. The impact from the Abu Dhabi real estate law has resulted in greater investor confidence. It shows that if you build the right product in the right segment, you will succeed in attracting a brand-new customer.
More than 70 per cent of our buyers were new. That is saying something since we have already sold about 15,000 units over the last 10 years. [So] to launch a new project and get 70 per cent new buyers, it is a testament to the success of the product.
The third tower went on sale on May 6. We are very excited. We’re going to continue to invest in and refine the product. We’re committed to meeting this pent-up and untapped demand.
Is the mid-market segment attracting buyers and tenants in Abu Dhabi?
Al Reem Island, at Shams Meera, was Aldar’s first mid-market project, launched in 2015. We felt that there was more to do. We continued to refine the product and come up with something new. We felt that there was still demand at a lower price point.
Houses are now more efficient. People are looking for location. The Bridges, for instance, is located along the canal. They are looking for lifestyle elements. So there is a common park. The Bridges is also a five-minute walk from Reem Central Park. We have invested in developing a regional park, sports, retail and food and beverage outlets by the water. That park will open to public next year.
Along with the lifestyle, ticket prices and payment plans are important. We worked on all of that. We introduced studio apartments, which we did not have in Meera. There was amazing demand for that product.
When we announced our prices a lot of people asked us [about] the units and if we were going to double [the prices] later. No, these were not marketing gimmicks.
Would you go into affordable homes as well, priced just below mid-market?
We think we’re in the right affordability bracket. We are going to launch and do much more in this domain. We think our ticket prices are where they need to be. We are not selling homes; we are selling communities and a lifestyle. Whether you own a studio or a one-bedroom apartment, you get a gym, a balcony, a canal and great infrastructure.
Is Abu Dhabi seeing an interest from investors and end users?
There is a lot of end-user demand in that income bracket and from those who could not previously afford property. A majority of buyers were under the age of 40, averaging about 35 years old. It shows that in the past people were waiting much longer to buy their first home. This definitely shows that there is demand and there is liquidity.
We are seeing both investors and end users. All who bought are strong believers in this market. These are not flippers. These are end users or long-term investors.
What’s the update on other projects in progress?
Al Hadeel on the seafront of Al Raha Beach has 233 units. The facade glazing is almost complete. The interior fit-outs are progressing really well. It’s sold out and on track for handover in September. Similarly, Ansam, where the first phase consists of 547 units overlooking the Yas Links golf course and the Yas Island waterfront, is also scheduled for handover in September.
At Shams Meera, also on Al Reem Island, structural work is in progress. Al Merief in Khalifa City is almost 30 per cent complete. We’re selling service plots in Neeral and Al Merief. [We’ve awarded] a contract for Mayan, a luxury golf and waterfront development on the island, for Dh500 million. There is solid work in progress at Yas Acres as well. The construction contract award for that is imminent.
Are the prices in Abu Dhabi’s residential market going to fall further this year? Is there demand?
I think there is going to be pressure on older and less-maintained stock. There is a fight for quality. If you deliver the right product, people are ready to pay. I would not say prices are rising. But at Ansam and at Al Hadeel in two years we have not seen prices drop.
We are seeing single-digit premiums from when we sold at launch in 2014. Upon completion they will also get a completion premium.
How do you phase delivery in response to demand?
We’re progressing on schedule. With the Bridges, we’re bringing it forward. We did not expect the absorption to be this high. Where we do phasing, we are cautious to make sure that the people who come in phase one will have all amenities. In West Yas, while the people will come in only in the first quarter next year, the school is already open. In the second half of the year, we will open the mosque and the retail centre. Typically, these come later but we make sure they’re available to the first people who move in.
Who is your primary buyer?
The buyer profile differs from project to project. Nareel and Al Merief are only for UAE nationals. For our new project, we have a very fair balance between three segments, Emiratis, Arab expats and Western expats.
Going forward, the focus would be the GCC markets. We do have a portion of Indian and Pakistani buyers. There is massive interest that remains an untapped area for us. We have to see how we tap into that segment.