Bushnaq: Enlistment of family-owned companies will boost Abu Dhabi financial market
Abu Dhabi: As the emirate of Abu Dhabi is hosting International Real Estate and Investment Show (IREIS 2009) in the midst of the economic crisis, many real estate experts are lauding its decision to go ahead with the event as a giant stride forward, and a very important contribution to Abu Dhabi's Economic Vision 2030. The emirate plans to spend USD275 billion over the next five years to enhance and develop its infrastructure and real estate projects, and to invest in the petroleum and non-petroleum sectors.
Ziad Bushnaq, CEO of Cornerstone, one of the largest real estate solutions companies in the region, and a participant in IREIS 2009, said, "IREIS 2009 is being held at a time when attractive opportunities are constantly surfacing in Abu Dhabi, particularly in the residential sector, due to the emirate's financial and real estate economy."
"We have conducted extensive studies that show that the decline in the price of construction material and the decline in the price of commercial spaces in Abu Dhabi has stimulated construction in the residential sector that many investors were previously ignoring. This is a natural reaction, if we consider that a single commercial plot can cost as much as AED 400 million, versus AED 1 million for a residential plot, and the risk arising from buying commercial plots with the declining prices is greater than that for residential plots. However, we expect commercial plot prices will rally in the near future, based on the real estate-investment relation between residential and commercial plots", added Bushnaq.
Bushnaq emphasized the need for the financial market in Abu Dhabi to move quickly, saying, "The Abu Dhabi financial market needs an immediate boost, which can be achieved through two key factors: first, supporting main investments, which increased from five percent to 32 percent in 2008, and accelerating them in order to increase this to 80 percent. The remaining 20 percent should be left to individuals to point the market in the right direction. Second, big companies need to be encouraged to enlist in Abu Dhabi's financial market in order to support the growth of the real estate, tourism, manufacturing and finance sectors in the emirate. Family-owned companies are best suited for this goal, and constitute up to 75 percent of previously enlisted companies. I believe that more agreements should be made with these companies, and that the obstacles to enlistment faced by these companies should be removed in order to refresh the economy."
A recent report issued by the Abu Dhabi Statistics Center showed a decline in the prices of many basic construction materials, with iron prices falling by 25 percent, while the price of 'Portland Star' local cement remained stable at AED 480 per tonne, and white cement was at AED 600. The price of both fictile blocks and Saudi bitumen was recorded at AED2,300 per tonne, while four millimeter Belgian transparent glass was AED30 per square metre, and Belgian mirror glass was AED55 per square meter. Italian marble slabs were priced at AED150 per square meter, Emirati ceramic wall tiles at AED24 per square metre, and ceramic floor tiles at AED22 per square metre, while Chilean white wood declined from AED 1000 to 980 per cubic meter, and different types of dye declining by between five and six percent.
The government of Abu Dhabi has launched a long-term plan, entitled 'The Abu Dhabi Economic Vision 2030', which aims to achieve sustainable growth by attaining an annual economic growth rate of seven percent until 2015, after which a growth rate of six percent will be maintained until 2030. This will increase the Gross Domestic Product (GDP) five-fold, allow the economy depend less on oil, control inflation, and facilitate a 100 percent employment rate for Abu Dhabi citizens.
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© Press Release 2009
