InterContinental is set to open its first residences in Abu Dhabi amid strong demand for luxury property across the country.
The InterContinental Residences Abu Dhabi will feature 130 units ranging from studios to three-bedroom apartments.
“I believe there is solid demand for luxury residential facilities. Having a hotel with adjacent residences is a common model within the IHG brand across the globe,” Dani Demerjian, general manager of the InterContinental Abu Dhabi, told The National in an interview.
“There is a need for hotel/residences and it was evident during Covid that business was flowing and guests needed the diversity of rendered services and facilities.”
The company has registered strong interest for longer stays, especially among residents.
“The UAE remains one of the most welcoming and cosmopolitan countries in the world, especially for existing and new entrepreneurship businesses, where their head offices are based in the UAE and, accordingly, attracts expatriates in light of further ease of visa facilitation,” he said.
“We are forecasting guest length of stay to vary from three to 12 months. However, we will avail a shorter length of stay as well.
“We plan to fill the residences gradually, ensuring memorable experiences are extended to all guests.”
The residences will offer stays for as short as seven days while contracts can go for as long as a year.
Located in the Al Bateen area of the capital, the InterContinental has played an interesting role in regional history.
It played host on May 25, 1981, when six Gulf rulers came together and formed the Gulf Co-operation Council in one of the hotel's ballrooms.
The hotel underwent a full renovation in 2007 but the Dar El Istiqbal ballroom, which was the birthplace of that union, remains almost untouched.
IHG's new property was originally planned to be a hotel as well, but was later converted into the current residences.
Residents can use all of the hotel amenities, along with those at the property, such as a pool and a private beach.
The branded residence sector has grown by more than 150 per cent during the past 10 years and has proved to be resilient in the face of global uncertainty and change, property consultant Savills said in its Spotlight on Branded Residences late last year.
The study ranked Dubai as the number one city globally for branded residences, with more than 40 projects completed.
Globally, developers and brands were seeking regions with large numbers of high-net-worth individuals, the report said.
Over the past five years, the highest growth rates in terms of number of HNWIs were noted in North America (53 per cent), followed by the Middle East (34 per cent) and the Asia-Pacific region (31 per cent).
The UAE is expected to record a 22 per cent rise in the number of high-net-worth households in the next five years, Savills said.
Financial wealth in the UAE is expected to accelerate at a compound annual rate of 6.7 per cent to $1 trillion in 2026, from $700 billion in 2021, management consultancy Boston Consulting Group said in a report last July.
The rapid expansion is being driven by growth in financial and real assets.
About 41 per cent of the UAE’s wealth was derived from ultra-high-net-worth individuals in 2021 and this is expected to grow to 43 per cent by 2026.
Branded residences are a good fit in the UAE because of the level of lifestyle among residents, Mr Demerjian said.
“The lifestyle is at its highest, and the luxury comes as part of the lifestyle and the readiness of guests to have a work life balance with excellence,” he said.
Rental prices in Abu Dhabi were generally stable in 2022 amid a wider economic recovery following the coronavirus-induced slowdown.
On a quarterly basis, they rose 1.6 per cent on average across the city in the third quarter of 2022, ValuStrat noted in its Abu Dhabi Real Estate Review Q3 2022 report.
Among the apartment locations monitored, asking rents rose on a quarterly basis in all the areas with the exception of Saadiyat Island, it said.
As for villa rents, the only monitored area that registered a negative trend was Al Reef.
The yearly asking rents averaged Dh50,000 ($13,610) for studios, Dh72,000 for one-bedroom units, Dh109,000 for two-bedroom units and Dh152,000 for three-bedroom apartments.
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Country-size land deals
US interest in purchasing territory is not as outlandish as it sounds. Here's a look at some big land transactions between nations:
Louisiana Purchase
If Donald Trump is one who aims to broker "a deal of the century", then this was the "deal of the 19th Century". In 1803, the US nearly doubled in size when it bought 2,140,000 square kilometres from France for $15 million.
Florida Purchase Treaty
The US courted Spain for Florida for years. Spain eventually realised its burden in holding on to the territory and in 1819 effectively ceded it to America in a wider border treaty.
Alaska purchase
America's spending spree continued in 1867 when it acquired 1,518,800 km2 of Alaskan land from Russia for $7.2m. Critics panned the government for buying "useless land".
The Philippines
At the end of the Spanish-American War, a provision in the 1898 Treaty of Paris saw Spain surrender the Philippines for a payment of $20 million.
US Virgin Islands
It's not like a US president has never reached a deal with Denmark before. In 1917 the US purchased the Danish West Indies for $25m and renamed them the US Virgin Islands.
Gwadar
The most recent sovereign land purchase was in 1958 when Pakistan bought the southwestern port of Gwadar from Oman for 5.5bn Pakistan rupees.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Ferrari
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Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
The years Ramadan fell in May
