Abu Dhabi's Urban Development Plan

Focus on Abu Dhabi's growth strategies and key developments

Abu Dhabi has embarked on a comprehensive and far-reaching economic diversification program that is set to transform this once quiet emirate into a global capital city with rich cultural offerings, a large industrial base and a world-class service sector in areas such as tourism, media, finance, education and healthcare.

In addition, the long-range-planning document, "Plan Abu Dhabi 2030: Urban Structure Framework Plan," which guides all aspects of development within the city of Abu Dhabi, is guiding its urban development plans. In the following pages, top executives discuss how they are helping to shape Abu Dhabi's vision.

Abu Dhabi Airports Company: Success in Every Direction

There are many ways to measure the success of the Abu Dhabi Airports Company (ADAC) over the past year. It was the second consecutive year of more than 30% annual growth in passenger traffic at Abu Dhabi International Airport despite a tough economic environment; ADAC completed much of the airport's $6.8 billion infrastructure and expansion work; and the company brought DFS, the world's leading luxury travel retailer operator, to the airport.

But perhaps the most telling sign of success was the January 2009 announcement that the government of Abu Dhabi, which owns ADAC, had chosen the company's Chairman and Managing Director, His Excellency Khalifa Mohamed Al Mazrouei, to take on the additional role of General Manager of Abu Dhabi Municipality.

The move reflects the central role ADAC is set to play in the emirate's long-term economic development plan, the Abu Dhabi Economic Vision 2030. This plan seeks to increase the non-oil share of the economy from 41% today to more than 60% by 2030 through the development of a range of sectors, from petrochemicals and metals to tourism, media and financial services. The plan also seeks to drive Abu Dhabi's integration into the global economy and build a sustainable, diversified and high-value-added local economy.

ADAC is contributing to this plan, not only by developing and managing some of the most strategic airport infrastructure necessary to achieve these goals, but also by contributing directly to the diversification and global integration of the emirate. It achieves this task through a business model that is rare in the region. Rather than operate facilities itself, it uses concessions and joint ventures with leading international companies to bring best-practice models, quality and expertise to its facilities and properties.

"It is Abu Dhabi International's ambition to be the airport of choice in the region," says Al Mazrouei, who explains that ADAC's business model is the best way "to create a premium airport in Abu Dhabi and develop the aviation industry across the emirate."

ADAC is also pursuing the emirate's global integration strategy through its Business and Logistics Park. In order to attract the best partners worldwide, ADAC is developing the park in phases to allow the company to improve and develop plans in line with specific investor requirements. Construction of phase one began in 2008 and should be completed in 2010. Phase one tenants include the regional offices of Thales, a global provider of information systems to the aerospace, defense and security industries. Development of phase two is expected to begin in 2011 with completion in 2015. Currently, ADAC is negotiating with several international industrial park developers to form an equity partnership to develop this second phase.

As for the infrastructure itself, ADAC has delivered a number of elements at Abu Dhabi International in the past six months. In October 2008, it inaugurated a second runway capable of handling the Airbus A380 superjumbo plane. At the same time, it authorized the first runway for low-visibility operations, making it one of the first in the region to get CAT III B classification.

Most significantly, ADAC recently launched the $367 million Terminal 3, increasing passenger capacity from 7 million to 12 million per year. The new Midfield Terminal Complex (MTC), currently under construction, will have an opening capacity of 20 million, an enhancement that is crucial to supporting Abu Dhabi's business, tourism and trade development goals. In fact, this new capacity has arrived just in time, given that the airport handled more than 9 million travelers in 2008, 30% more than the 6.9 million it handled in 2007. This was a continuation of sustained and strong annual growth: In both 2005 and 2006, passenger growth increased by 20%, and in 2007, it grew by 30%.

Much of the passenger growth at Abu Dhabi International reflects the growing network and frequencies of flights for Etihad Airways, the UAE national carrier based at the airport. It also is a result of the overall strength of the Middle East airline industry — the fastest growing in the world — and the increasing popularity of Abu Dhabi as a business, tourism and transit hub.

Looking toward the future with optimism, Al Mazrouei says that the Middle East is one global region that is weathering the storm better than most. "So it is with a level head that we can be cautiously optimistic of a tempered growth for Abu Dhabi and the region as a whole in 2009," he points out.

The reason for that optimism is obvious: Abu Dhabi is ploughing its infrastructure development funds, estimated at over $36 billion, into aviation-related projects. "In Abu Dhabi, the $6.8 billion investment in the principle gateway to the UAE capital will play an instrumental role in the rapid development of our 2030 plan, which envisages a worldclass city and an Emirate-wide infrastructure to serve the extraordinary transformation Abu Dhabi is set to undergo," Al Mazrouei concludes.

Manazel Real Estate: Building for Abu Dhabi's Economic Diversification

When Manazel Real Estate launched in 2006, its focus on building high-quality but affordable housing for middle-income professionals in the UAE ran counter to the prevailing developer preference for luxury and super-luxury housing. Since then, three roller-coaster years and one global economic crisis have served to highlight in bold relief the foresight that Manazel's commitment to middle-income housing represents.

It took strategic clarity — and smart investors — to dramatically buck the sentiment at the time, in a market and region where developers were fighting to outdo each other with ever more lavish and fantastic projects.

"During the boom period, the market overlooked the basic equation of supply and demand," says Manazel Chairman Mohammed M. Al Qubaisi. "A majority of developers offered high-end products that only approximately 10% of the UAE population could afford."

While more than 70% of the UAE population is categorized as middle income, most developers were focusing on the high-end market during the real estate boom, he explains: "Due to this inaccurate prioritization, the country currently is facing a huge shortage of affordable housing. Manazel is the first company that is putting its efforts toward closing this gap."

What's more, Al Qubaisi says, current economic conditions are leading to a "rationalization" of income and salaries, which increases the demand for Manazel's developments and makes its focus on the middleincome segment even more important.

But quality and affordability are not Manazel's only messages. Al Qubaisi eagerly points out that his company is delivering properties into the market on time. In fact, by the first quarter of this year, Manazel will hand over all 942 apartments in its 460,000-square-foot affordable housing community, Dunes Village at Dubai Investment Park.

In addition, during the second half of 2009, it will deliver 742 townhouses and villas in the "Arabian" themed areas of Al Reef Villas, an integrated middle-income community near Abu Dhabi Airport, in close proximity to Al Raha beach in Abu Dhabi. The remaining phases, "Mediterranean," "Desert" and "Contemporary," are set for completion in the last quarter of 2010, at which point Al Reef Villas will offer all the essential facilities to its occupants, such as a play area, community centers, neighborhood shopping, and education and health facilities. Al Reef Villas, alongside the adjacent Al Reef Downtown urbanliving district, covers more than 1 million square meters.

The company's first overseas development, and one that represents Manazel's vision of bringing its high-quality, affordable homes to middle-income earners across the Middle East and North Africa, is Amman Gardens in Amman, Jordan. Located near the city's international airport, the project's delivery is set for early 2011.

Manazel is also building 9712 BMC, a mixed-use development formerly known as Building Materials City that includes a commercial zone with nine office towers and two Prestige Towers, a residential zone with 17 towers, an upscale 100,000-squaremeter shopping mall and a four-star hotel. As a result of the project's close proximity to the new Capital District announced in the Abu Dhabi Plan 2030, its focus shifted from building materials to services. Manazel changed the name of the project from Building Materials City to 9712 BMC (9712 is the country and city telephone code for Abu Dhabi).

The first phase of the project — including Prestige Towers, where Manazel will have its corporate headquarters, and the 9712 BMC Mall — is expected to be completed by early 2010, with the entire project due to be finished by 2012. Manazel continues to benefit from its Abu Dhabi roots, in particular the business environment and future economic growth path as defined by the Abu Dhabi Economic Vision 2030.

Like most companies in the emirate, Manazel expects that it will not only benefit from this vision, but contribute to it as well. Al Qubaisi explains that the economy is diversifying into areas such as heavy and light industry, renewable energy, pharmaceuticals, media, healthcare and financial services.

These industries employ large numbers of skilled and semiskilled professionals, all of whom will need a place to live. "Manazel intends to offer affordable communities to them and thus contribute to the 2030 plan," says Al Qubaisi.

After all, as government urban planners and strategists across the region have learned, providing a good quality of life — most notably attractive and affordable housing — is crucial to attracting and retaining the talent necessary to drive these high-value-added industries.