Al Ain will provide strong demand for real estate across all sectors of the market as it witnesses a rapid growth in population over the next 20 years according to the Al Ain 2030 plan. Although there is a projected oversupply of luxury accommodation, there is a dramatic potential shortage of residential units particularly for middle income families at current development rates.
"With more units and buildings available now in 2010 than in 2009, and with the completion of the new Al Hili development, consisting of 97 buildings and 1222 units, leasing rates will remain subdued in the short term, but will satisfy increasing demand in the medium term towards 2015," said Tamer Ibrahim Chaaban, Branch Manager, Asteco Al Ain.
It is the tourism sector that will provide a sustainable stimulus for the local economy. Al Ain, historically an oasis town has long been a favourite with UAE Nationals, but now it is making a concerted effort to attract GCC and international tourists.
Numerous four and five-star hotels have opened over the past 10 years, such as Rotana, Hilton and Mercure, with development plans in place for a further four hotels including The Jumeirah Al Ain. In terms of other attractions, the Al Ain Air Show and Flower Show attract thousands of visitors every year and the Al Ain Wildlife Park is planning a new leisure resort that will be Abu Dhabi's first project graded under their new 'Estidama' green rating system.
"With so many potential tourism projects, benefits should filter through to indirect commercial operations, such as suppliers of food and beverage, laundry, facilities management and so on. If so, the current supply-demand real estate dynamics will gradual rebalance, certainly if current supply projections remain constant and infrastructure plans go-ahead," added Chaaban.
Al Ain's population is currently estimated at 400,000 and this is set to rise to 500,000 by 2015 and then to one million by 2030. Improved road infrastructure, affordable rents and increased commercial activity, especially in the tourism sector, are reasons cited for the positive growth forecast in the Al Ain Plan 2030.
"In 2008 we managed a mix of 350 residential and commercial units, now we have over 600 units in our portfolio. We're focusing on leasing, property management and property valuation and as it stands we handle 60% residential and 40% commercial" said Chaaban.
The central district is Al Ain's only high population density area. According to the Al Ain Plan 2030, The Gateway Corridor concept focuses density and intensity into a linear strip of residential and retail space, stretching the length of the city. By 2030 three districts, Al Maqam, Asharej and Al Muwaiji will join the central district to help house the bulk of Al Ain's growing population.
According to the Asteco Abu Dhabi Q3 report, Al Ain is leading the way on the commercial front with rents jumping 10% and 13% in the office and retail sectors respectively, which contrasts sharply with the capital where rents have contracted.
Although softening, Al Ain's residential leasing rates still fared better in Q3 than Abu Dhabi, with apartment and villas rents dropping by an average of 4% and 3% compared to the capital's prime buildings which saw rents fall 7% with lower quality buildings dropping 10%.
