Finance hub springing up on Sowwah

Infrastructure work on Abu Dhabi's planned new finance district is due for completion in May next year

Sowwah Island, the capital's future official financial centre, which has developed by the governmental investment company Mubadala Development, will be connected to the Abu Dhabi island by the end of this year. As the clients of the Beach Rotana hotel who are facing the 105-hectare island can see, construction is quickly moving ahead, on what used to be an empty desert area with only one shisha shack a few years back.

The first of the four office towers to be delivered are close to reaching their ultimate height. But the pace of construction does not fall in line with the pace of sales, as only four plots out of the 25 in total have been sold so far. John Thomas, the executive director of Mubadala Real Estate and Hospitality, the master developer of the project, said: "Although we have not marketed the place, we received many applications from developers. We are not in a hurry to select investors, but we will carefully study the provision of the plots to them."

Last year all the available space had been reserved, but the economic downturn of has presented problems for some of the potential clients. "I'd be lying if I said the financial crisis hasn't affected our leasers," Mr Thomas said in April. "We are focusing on these tenants. Some of them are having to re-evaluate." The development was also classified as an investment zone, which means that non GCC nationals can buy properties there.

So far the National Bank of Abu Dhabi and Al Hilal Bank have bought respectively 6,700 and 4,850 square metres of commercial plots to build their new headquarters. The total built up area of the island will be 3.2 million sq meters, 30 per cent of which will be office space. Nicholas Maclean, the managing director of the property broker CB Richard Ellis, said: "Sowwah Island has indeed the potential to be the banking heart of Abu Dhabi. There is quite a lot of interest from the Abu Dhabi community to occupy accommodation there once the buildings are completed."

The capital has a scarcity of office space, with businesses often forced to move into residential units or villas. According to Colliers International, urban Abu Dhabi contains 1.4 million square metres of office space. That should increase by 67 per cent over the next three years, with developments on Sowwah, Reem and Saadiyat islands, and Al Raha Beach. Mr Thomas promised long term leases of 10 to 15 years, in contrast to the usual contracts offered in the market, which are for a year or two, according to brokers. "We want businesses to settle and feel at home on Sowwah Island. Our offices will be very functional.," he said.

Only the first phase out of three is under construction, including Sowwah Square, which is Mubadala's Dh5.7 billion (US$1.55bn) flagship commercial project on the island scheduled for completion by the end of next year. The square will host the future new headquarters of the Abu Dhabi Securities Exchange (ADX), surrounded by four office towers of up to 36 storeys each. The whole development will provide about 180,000 sq metres of prime office space.

The shape of the new ADX is now clearly visible with the main steel trusses connected to the four concrete towers. Once completed, the four legs of the building will appear to be floating on a water pool that follows the curve of the sea The most original characteristic of the island is the two-level podium system, which is the first in the capital. "You won't see car parks above the ground," Mr Thomas said. "Trucks will be using the underground roads, reducing the traffic above the ground. There will be air-conditioned passageways where people will be able to go from one point to another and avoid the hot weather."

The podium, which will be linked to the offices, hotels, a new metro station and the Cleveland Clinic Abu Dhabi, is now 75 per cent complete and external cladding is being fixed to a multi-storey car park. Once handed over, the development will offer 22,000 sq metres of retail, dining and entertainment facilities. Infrastructure on the first phase will be completed by May next year. The 5.4km seawall surrounding the island is also 95 per cent complete and the first of two district cooling plants is under construction.

Enabling works are under way on the site of the five-star hotel Rosewood Abu Dhabi and the Cleveland Clinic, both schedule for completion in 2012. The second phase which will also include residential buildings, is still at a conceptual masterplan stage. "We are building a new downtown with 30,000 residents," Mr Thomas said. A 4km-long corniche round the island will offer retail, restaurants and cafes to provide for nightlife activity.

Sowwah Island will be connected to the mainland and surrounding islands with 13 bridges and a mass transit system with light and heavy rail. [e-mail]