07th of March 2007

iPropertyCLUB News

Abu Dhabi lures tourists with mega projects

The surge in crude oil prices over the past two years, reaching almost $80 per barrel, has also inflated the coffers of Abu Dhabi's government, enabling it to splash out on economic projects.

"Projects in various sectors valued at over Dh930 billion ($253 billion) have been launched so far," said Salah bin Omair Al Shamsi, Chairman of Abu Dhabi Chamber of Commerce and Industry.

He did not specify the share of government-owned firms in such investments but pointed out that construction and tourism took the lion's share with projects worth about $154 billion and $54 billion, respectively.

And while he did not give a timeframe, another official at the chamber of commerce, who requested anonymity, told AFP of a five-year period.

Abu Dhabi appears to be vying to catch up with the construction frenzy and booming tourism in neighbouring Dubai, which has become a leading business hub and tourist destination in the region. It recently unveiled a Mega project to build four prestigious museums, including a Guggenheim and possibly a satellite of the Paris Louvre, to be part of Abu Dhabi's bid to share a larger slice of the region's tourism.

Abu Dhabi authorities also plan, to double last year's figure of 1.35 million visitors by 2015. The government has drawn a roadmap for its economic ambitions, with an enlarged role for the private sector and development of tourism at the heart of the plans.

Commercial enterprises are to be privatized, the financial market strengthened, the emirate's industrial base diversified, and specialized economic zones are due to sprout up. The aim is to turn Abu Dhabi into an attractive tourist destination, said Nasser Al Suweidi, head of Abu Dhabi Department of Planning and Economy.

“Our strategy is to build –in. cooperation with our partners in the private sector – a new economy that is open, diversified and innovative, which aims to export ... and not he a market for consumption," he told participants.

Officials are also praising the pace of growth in non-oil sectors in Abu Dhabi. "Non-oil sectors grew by at least 18 per cent, in 2006, with their share of gross domestic product (GDP) reaching Dh138 billion ($37.5 billion) and expected to reach Dh163 billion ($44 billion) in 2007," Shamsi said.

He pointed out that the emirate's GDP reached almost 510(1 billion in 2006, and was expected to grow by 8.2 per cent this year, to almost $158.6 billion.

Dubai remains the regional leader in diversifying from oil, faced with dwindling oil resources. It attracted over six million visitors in 2005 and now has plans to receive about 15 million a year from 2010.

Dubai is also home to dozens of grandiose projects, including Burj Dubai, which is slated to be the world's tallest skyscraper.

Abu Dhabi is rapidly emerging as one of the leading development and investment hotpots in the region. It will continue to leverage on its status as a distinct location for real estate omvest,emts over the next decade. Thanks to its political stability, security, tax-free status and stability of the currency.

With current residential occupancy levels reaching more than 90 per cent and hotel occupancy at 80 per cent, the residential and tourism sectors will witness the major share of this investment according to an industry expert.

Abu Dhabi has started a new drive in tourism promotion after the creation of the Abu Dhabi Tourism Authority. It is spending billions of dirham in setting up its tourism infrastructure.

Several mega projects, including the $14.7 billion Al Raha Beach and $6.8 billion Shams Abu Dhabi project by Sorouh Real Estate are already launched in Abu Dhabi to lure more tourists to the emirate.

Meanwhile, Abu Dhabi, which controls more than. 90 per cent of the vast oil wealth of the UAE appears to have set its sights on following the example of booming Dubai, AFP reported.

Officials from the largest emirate in the UAE federation used the podium of a two-day economic forum last month to emphasize the emirate's drive to diversify and restructure the revenue base of its economy.

"Abu Dhabi stands today at the threshold of a crucial period of economy transition," Shaikh Warned bin Zayed Al Nahayan, a son of the founder of the Gulf state. Told delegates at the Abu Dhabi Economic Forum.

"Our political leadership is determined to benefit from the current achievements through building on them to reach a dynamic and diversified economy," he said.

Abu Dhabi sits on more than 90 per cent of some 97.8 billion barrels of the UAE's proven oil reserves, ranking the country as fifth in the world with an OPEC production quota of 2.444 million barrels per day. The black gold has allowed Abu Dhabi to play a leading role within the federation since it was founded in 1971 following the withdrawal of British troops from the region.

Source: Property Times