A subdued opening to the "Cityscape Abu Dhabi" property show on Sunday underlined the impact of the global financial crisis and a shift in emphasis to the completion of projects already launched.
"All projects are under construction" read a gigantic billboard put up by a major property developer on the road leading into Abu Dhabi -- to give the impression of business as usual.
The four-day show has drawn 250 exhibitors from 35 countries.
But business has changed dramatically from the pre-crisis era, when property developers in the United Arab Emirates (UAE), mainly Dubai and later Abu Dhabi, would sell massive projects off plan within hours of their being announced.
|Visitors look at a model of the Capital City District project displayed at the Cityscape exhibition in the Emirati capital Abu Dhabi.|
No new projects appear likely to be announced at the show, which features dozens of glitzy models of projects announced during the Dubai-led property boom, which burst spectacularly in autumn 2008.
Among them stands a huge scaled-down model of Abu Dhabi as it would look in 2030, if the government's masterplan keeps to schedule.
"A lot of the schemes announced over the past four to five years have been slowed down," said Mark Morris Jones of research firm CB Richard Ellis, noting that developers have been looking at balancing delivery times with demand.
"We had to look into some projects as the demand in the market has changed," said Ousama Ghannoum, marketing manager at ALDAR Properties, Abu Dhabi's largest developer by market value.
He said developers are now focusing on "affordable housing" with less emphasis on the high-end market.
Due to Abu Dhabi's oil wealth and a lack of newly developed property, the crisis has not hit hard like in Dubai, where prices have halved as investors vanished and thousands of new units went on the market.
Only nine projects, worth 491 million dollars, have been cancelled in Abu Dhabi, while 42 others, valued at 6.8 billion dollars have been put on hold, according to a study by Proleads research company, published at the show.
The study, which counts only projects with budgets of more 10 million dollars, said 307 projects, with a combined value of 153.9 billion dollars, have reached the execution stage.
Another 104 projects worth 73.97 billion dollars are at a pre-execution phase, it said.
The wealthy government of the emirate, which sits on almost all the oil reserves of the UAE, plays a major role in sustaining the pace of construction as it stands behind several landmark developments.
The projects include building state-of-the-art branches for the Louvre and Guggenheim museums.
Abu Dhabi, which is the Emirati capital, is also splashing out heavily on infrastructure, which is in turn helps the economy to overcome the impact of the global crisis.
The strong financial footing of Abu Dhabi, mainly as oil prices have recovered, allows its government-linked developers to feel more comfortable than troubled Dubai firms.
"I don't foresee that we will face any problems in financing our projects," said Carlos Obeid, chief financial officer at Mubadala, which is involved in grandiose projects in Abu Dhabi.
He pointed out that Mubadala was in the final stages of securing a two-billion-dollar syndicated loan.
"Abu Dhabi has strong fundamentals ... Mubadala is owned by the Abu Dhabi government," Obeid said, underscoring the comfortable position of the developer.
Jones also said that Abu Dhabi "has been insulated," like Qatar and Saudi Arabia, in contrast to debt-laden Dubai and other property markets, thanks to their high liquidity levels.
He also pointed out the level of property supply has not been as high as in Dubai, which has also been rife with speculative investments, while demand in the capital has been less volatile.
"It is a question of supply. They (Abu Dhabi) are in a different point of development compared to Dubai, which is delivering huge amounts" of units, said Jones of the CB Richard Ellis research firm.
"They are at a different place in the cycle" of market development, since Abu Dhabi launched its major property schemes later than Dubai, whose market was opened to foreign property investors in 2002, he said.