Gulf Construction Online - Stimulating growth

Abu Dhabi

Jubail Island will feature six investment zone villages.

Stimulating growth

Abu Dhabi is spearheading a drive to accelerate growth through multiple initiatives including a whopping $13.6-billion stimulus package and the opening up of the commercial and real estate sectors to foreign investment.

01 September 2019

Four key initiatives taken by Abu Dhabi over the past year have put the emirate on a decisive path to accelerated growth: the Dh50-billion ($13.6 billion) Ghadan 21 stimulus programme; Abu Dhabi National Oil Company’s (Adnoc) Dh486-billion investment plan; allowing foreigners to own 100 per cent of onshore companies; and opening up of freehold real estate ownership to foreigners in investment zones.

These four initiatives are expected to have a manifold impact on the emirate’s economy, which apart from involving a concerted drive to boost Abu Dhabi’s infrastructure, is set to attract significant investment in its real estate, manufacturing and services sector. Needless to say, that the emirate’s hydrocarbons sector is also poised to receive considerable stimulus.

Ghadan 21 (Arabic for tomorrow) is a three-year stimulus programme, under which Dh20 billion has been allocated to this year’s development package. As part of the programme, Abu Dhabi is now setting up a Dh600-million fund to attract entertainment and business events to the emirate.

One of the key tenets of the programme is to develop infrastructure, including transportation, communication and urban development. In line with this strategy, the Abu Dhabi government has appointed developer Aldar to undertake social, economic and infrastructure projects worth Dh5 billion across the emirate.

Etihad Rail ... to connect ports, manufacturing and production points, as well as urban locations.

Adnoc’s massive investment programme includes a plan to spend Dh165 billion on the development of Ruwais City, a 6.9-sq-km community near the Ruwais Industrial Complex in Al Dhafra region, according to a Wam report. The project will see the city’s population nearly double over the next 15 years, to more than 50,000 people.

The Ruwais City development plan complements Adnoc’s decision to develop the world’s largest integrated refining and petrochemicals complex in Ruwais. Along with the growth of Adnoc’s own businesses, the development of both the industrial complex and the city will see a significant spill-over impact on the economy, as local contractors and businesses grow in tandem.

To accommodate the immediate population growth, Adnoc is constructing more than 3,000 new residential units bringing the total number of units to 10,000, with more to be built as required. Development plans also include a number of lifestyle, recreation and community projects as well as the expansion of the public transport network, community and civic centres and a number of health centres.

The investment programme will see the entire Ruwais complex upgraded to increase its flexibility and integrated capabilities to produce greater volumes of higher-value petrochemicals and derivative products. It includes the construction of one of the world’s largest mixed feed crackers, and the development of a new, large-scale, manufacturing ecosystem in Ruwais through the creation of petrochemical derivatives and conversion parks.

Meanwhile, Abu Dhabi government’s move to allow foreigners to own freehold land in investment zones – previously only open to UAE and GCC nationals – has been applauded by developers in the emirate who indicate that it will boost the real estate market and have far-reaching implications on the broader economy.

According to Aldar Properties CEO Talal Al Dhiyebi, the developer is “already reaping the rewards of the recent initiatives and seeing a positive shift in sentiment, evident by strong sales of over Dh2 billion ($544 million)” in its two latest plot developments, Alreeman and LEA.

The transport sector has, however, lapped up the largest contracts awarded in the emirate this year with the flagging off of the much-awaited Stage Two of UAE’s national railway network. A total of three key packages worth a whopping Dh5.9 billion have been signed off this year – with another package anticipated by the year-end (see Page 50).

The proposed HyperloopTT ... first phase of the project involves a 10-km stretch.

Transportation

The transport sector, in fact, is expected to continue to hog the headlines as Abu Dhabi presses ahead with its ambitious development plans that range from the futuristic hyperloop network to the more traditional railway network. The emirate also awaits the opening later this year of its new showpiece airport terminal – the Midfield Terminal building at Abu Dhabi International Airport – built at a cost of Dh10 billion.

Abu Dhabi intends open the world’s first commercial hyperloop system, which is expected to cost between $20 million and $40 million per kilometre, according to Bibop Gresta, chairman of Hyperloop Transportation Technologies, the company that has been assigned to develop the project. Early this year, Gresta announced that Abu Dhabi’s Hyperloop capsule has left the assembly facility in Spain for Toulouse, France, where it will be tested and optimised.

The first phase of the project involves construction of 10 km out of a 150-km system between Abu Dhabi and Dubai and the company has an ambitious target to open it next year.

In 2018, HyperloopTT had signed a memorandum of understanding with Aldar Properties to create a new HyperloopTT centre including a full-scale commercial Hyperloop system, a Hyperloop R&D Advanced Mobility Centre, a Demonstration & Visitor Centre, and an Innovation Hub.

The proposed site within Aldar’s Seih Al Sderieh landbank is conveniently located on the border of Abu Dhabi and Dubai, close to the Expo 2020 site and Al Maktoum International Airport.

Late last year, HyperloopTT appointed leading design and engineering firm Dar Al Handasah to lead the design while joining the project as the latest investor in HyperloopTT.

Meanwhile, Abu Dhabi has demonstrated its intent to go full steam ahead on its national railway by awarding mega contracts for Stage Two of the 1,200-km Etihad Rail. In June, Etihad Rail, the developer and operator of the UAE national railway, gave the go-ahead for the civil and track works of Packages B and C worth Dh4.4 billion for Stage Two of the stretch connecting Abu Dhabi and Dubai.

Package B extends across 216 km, and Package C runs for 94 km – both packages being part of the 605-km line from Ghuweifat to the Port of Fujairah on the eastern coast. The importance of the two packages lies in the fact that they link strategic ports and industrial areas nationwide along a distance of 310 km including Khalifa Port, Khalifa Industrial Zone Abu Dhabi (Kizad), and Jebel Ali Port, upgrading the transport and shipping industry by connecting ports, manufacturing and production points, as well as urban locations.

The Midfield Terminal Complex (MTC) ... full operational trials in progress.

In the aviation sector, Abu Dhabi International Airport is now gearing up to open its multibillion-dollar Midfield terminal building, where operational readiness trials are under way. The terminal has been designed to serve as many as 84 million people per year, with a floor space of over 742,000 sq m.

Work is also under way on the expansion of Khalifa Port in the UAE capital, with National Marine Dredging Company (NMDC) working on a Dh985.17-million dredging contract. The expansion of the port, one of the world’s fastest growing container, bulk cargo and roll-on roll-off vehicle transport facilities of its kind, will enable the container terminal to handle an additional 2.4 million twenty-foot-equivalent units (TEUs) per year. The project is being supported by a $740-million investment from China’s Cosco Shipping.

Power & Water

The power sector, too, has been in the limelight with Abu Dhabi making commendable strides in solar power and nuclear energy projects.

The emirate’s investments in the clean energy sector started in 2006 through Shams 1, the largest renewable energy project in operation in the Middle East at the cost of Dh2.2 billion with a capacity of 100 MW.

Thirteen years on, earlier this year, Abu Dhabi brought on line the world’s largest independent solar power plant, Noor Abu Dhabi, in Sweihan with a massive 1.17-GW capacity at a cost of Dh3.2 billion. And has just followed it up by announcing plans for yet another mammoth development – with a capacity of 2 GW.

Noor Abu Dhabi solar plant is a joint venture between the Abu Dhabi Power Corporation and a consortium of Japan’s Marubeni Corp and China’s Jinko Solar Holding. The project began commercial operation at the end of June. Providing enough capacity to cover the demand of 90,000 people, the plant features more than 3.2 million solar panels, installed across an 8-sq-km site. Beyond size, Noor Abu Dhabi broke another record at the time of bid submission, attracting the world’s most competitive tariff of 8.888 fils/kilowatt hour.

Emirates Water and Electricity Company (Ewec), the UAE’s leading procurer of water and electricity, has issued a tender for the construction and development of the new solar photovoltaic (PV) power project to be located at Al Dhafra. Once completed, the project site will cover an area of approximately 20 sq km, almost doubling the capacity of the current largest operational single-site solar photovoltaic plant in the world, Noor Abu Dhabi.

Meanwhile, the Emirates Nuclear Energy Corporation (Enec) has been announcing key milestones at regular intervals in the development of the Barakah Nuclear Energy Plant also in Al Dhafra. Construction of the $24.4-billion project began in July 2012 and is progressing steadily with the latest construction completion percentages showing that Unit 2 stands at 95 per cent, Unit 3 is more than 91 per cent, and Unit 4 is more than 82 per cent, while the overall construction completion is more than 93 per cent. Each unit has a capacity of 1.4 GW (UAE Focus, Page 29).

In the water desalination sector, Abu Dhabi is building the world’s largest reverse osmosis (RO) desalination plant at Taweelah, 45 km north of Abu Dhabi. Saudi-based Acwa Power, the developer of the project, has appointed a consortium of Spanish group Abengoa and Chinese EPC contractor Sepco III to start early works for the construction of the plant.

On completion, the giant desalination plant, being built at a cost of over $700 million at Taweelah power and water generation complex, will boast a capacity of 909,000 cu m per day.

Industrial zones

In the industrial sector, Emirates Global Aluminium (EGA) has launched operations of its $3.3-billion Al Taweelah alumina refinery, a strategic growth project that expands the industrial giant’s business upstream in the aluminium value chain.

Once full ramp-up is achieved, the refinery which is located in Kizad is expected to produce some two million tonnes of alumina per year, replacing some imports and securing EGA’s competitive supply of this vital raw material.

Meanwhile, Kizad has attracted significant interest from investors with the latest being Chinese manufacturing major East Hope Group which is working with Kizad on the feasibility of setting up projects worth over $10 billion at the industrial hub. Under an agreement, both entities will look into a possible 15-year, three-phase plan to develop 7.6 sq km of land at Kizad.

Abu Dhabi’s first integrated trade, logistics, industrial and free zone and a subsidiary of Abu Dhabi Ports, Kizad said in Phase One of the proposed project, East Hope would develop an alumina facility, while the second phase would include a red mud research centre and recycling project. The final phase would see large-scale upstream and downstream non-ferrous metal processing facilities, it stated.

Earlier this year, another Chinese firm Roadbot broke ground at Kizad on a new tyre manufacturing plant, which is located in the 2.2-sq-km China-UAE Industrial Capacity Cooperation Demonstration Zone.

Among other developments, Abu Dhabi’s pioneering industrial venture Abu Dhabi Polymers Company (Borouge) has begun construction of its fifth polypropylene unit within its plant in Ruwais.

Once the project comes on stream in the third quarter of 2021, it will boast a production capacity of 480,000 tonnes per year, said Borouge, a joint venture between Abu Dhabi National Oil Company (Adnoc) and Borealis of Austria.

The new plant will help boost its polypropylene capacity by more than 25 per cent to 2.24 million tonnes per year and unlock new opportunities to boost the local economy.

Real Estate

The real estate sector has witnessed impressive growth on major developments such as the Jubail Island, Al Qana, Qaryat Al Hidd and Alreeman II as well as the projects under way on Saadiyat, Yas and Al Reem islands, particularly with the opening up of the sector to foreign investment.

In May this year, Jubail Island Investment Company (JIIC) signed up Gulf Contractors Company to carry out enabling works for the Dh5-billion Jubail Island, development, which is poised to become Abu Dhabi’s most sought-after residential sanctuary for wellness and nature enthusiasts.

Jubail Island spans 400 hectares and will comprise a mix of serviced plots, high-end and mid-range properties, as well as retail, office park and food and beverage (F&B) outlets. Set to feature six investment zone villages – Marafaa Al Jubail, Nad Al Dhabi, Seef Al Jubail, Ain Al Maha, Souk Al Jubail and Bed’a Al Jubail, Jubail Island is strategically located between Yas Island, Saadiyat Island, and Abu Dhabi city.

With a Pearl rating from Abu Dhabi’s Estidama certification system, the project is also set to significantly enhance the island’s natural ecosystem through planting new mangrove forests, as well as adding extensive canals and other new marine habitats that will be home to migratory birds, fish populations, sea turtles, and gazelles.

The development will offer 6,000 residential plots ranging in size from 1,500 to 5,000 sq m as well as villas from 300 to 1,200 sq m in size.

Meanwhile, work is in full swing on Abu Dhabi’s latest social dining and entertainment destination, the Al Qana, which is on track for opening in the fourth quarter of 2020. With 2.4 km of panoramic waterfront, Al Qana will offer local and international F&B outlets, a skatepark, world-class family and community social spaces, a unique virtual reality zone, marina, the largest stand-alone cinema in Abu Dhabi and the Middle East’s largest aquarium (see Page 54).

Alreeman II, a Dh1.7-billion masterplanned residential community in the Alshamkha area, was launched in June by Aldar Properties exclusively for purchase by Emiratis. The project follows the success of Alreeman, launched this January, which generated Dh1.6 billion in sales.

Spread across a 2.4-million-sq-m area, Alreeman II features 1,690 villa plots and addresses pent up demand for affordable, infrastructure-enabled land plots where owners can build homes to their specifications and taste. The launch is in line with the trend in Abu Dhabi in the first half of the year towards affordability and competitive pricing

Construction work will kick off later this year, with the first handovers likely to begin from 2021-end.

The Dh2-billion freehold development, Alreeman, with investment zone status, offers residential and commercial land plots available for purchase by all nationalities.

The mid-market, mixed-use development is spread over an area of 2.8 million sq m and includes a series of residential clusters that will feature single and multi-residential villas and apartments, complemented by retail space, F&B outlets, mosques, and sports, education and commercial facilities.

Another key Aldar project is the Dh10-billion master-planned community, Alghadeer, located on the Abu Dhabi-Dubai border. Late last year, Aldar awarded a contract for the infrastructure buildings and early works package for the first neighbourhood in Phase Two of the project.

Alghadeer features 14,408 residential units besides commercial properties, cultural and institutional amenities and entertainment attractions.

Among other developments, Abu Dhabi continues with its programme to transform its islands.

At Yas Island, work is progressing to schedule at Yas Bay, a vibrant new waterfront community, which recently witnessed the completion of concrete works at its first hotel, which will be operated by Hilton. In addition, the first phase of road infrastructure and landscaping of the public realm, parks and promenade has also been completed.

Yas Bay Arena, the first-of-its-kind multi-purpose indoor arena in Abu Dhabi, also marked a major construction milestone in March with the installation of the largest roof truss for the 18,000-seat arena.

The arena is an integral part of Yas Bay’s waterfront destination, which boasts a 14-million-sq-ft mixed-use area that is also under development on the southern end of Yas Island.

Miral, its developer and Abu Dhabi’s creator of destinations, continues to attract interest in Yas Bay with the latest investor Siadah International Real Estate Development having purchased plots for the development of two residential buildings in the area.

Also at Yas, Aldar Properties has launched its freehold waterfront project, LEA, which will be developed on the northern shores of the island. Featuring 238 residential plots adjacent to Aldar’s flagship Yas Acres project, LEA boasts parks, promenades, and waterside walkways. In addition, residents will benefit from the amenities within Yas Acres such as parks, swimming pools, play areas, schools, mosques and the full-length nine-hole golf course.

Yas Island is a core pillar of Aldar’s destination development strategy and features the completed residential communities Ansam and West Yas as well as the under-construction Mayan, Yas Acres and Water’s Edge.

Construction is under way on the three launched phases of Yas Acres, with handovers of the first 652 homes on track to commence this year. Aldar last year launched a new community called The Cedars at this flagship golf and waterfront development.

At Saadiyat Island, work is in progress on Qaryat Al Hidd community development, which consists of two separate residential developments, Sunrise and Sunset, comprising more than 900 luxury apartments are spread across 12 buildings. Qaryat Al Hidd forms part of the larger 1.5-million-sq-m Hidd Al Saadiyat masterplan development on Saadiyat Island and will feature amenities including parks, playgrounds, shops, restaurants, five-star resorts and marina and yacht club.

On Reem Island, meanwhile, Imkan is developing its $540-million Makers District, an 18-hectare waterfront community that promotes creativity. With over 1,000 residential units and 11,000 sq m of commercial and retail space, the scheme is scheduled for completion in 2020.

Imkan has just appointed the main contractor for its Pixel project within Makers District. The community will be made up of 525 residential units within seven mixed-use residential towers. Work on Pixel’s seven towers will begin immediately and the project is scheduled full completion in Q4 2021.

Imkan is also developing AlJurf Gardens, a pristine coastal destination located between the emirates of Abu Dhabi and Dubai.

AlJurf comprises 293 residential villas and land plots with facilities and amenities including residential communities and serviced residences, a renowned wellness clinic, a private beach, private marina and community centre.

Scheduled for completion in 2021, AlJurf Gardens will be the first phase of a 370-hectare destination which will comprise three distinct districts – AlJurf Gardens, Jiwar Al Qasr and Marsa AlJurf, each with its own defining architectural characteristics.