The Abu Dhabi Urban Planning Council (UPC) has approved a slew of new projects, reflecting positive organic growth in the capital at a time when oil prices are slumping. The UPC more than tripled the total floor area of projects spanning commercial, retail and residential properties from the second quarter of last year. Twenty-six development projects spanning a total floor area of more than 2.3 million square metres have been approved.
The oil price is forcing many Gulf economies to re-evaluate budgets and cut back on a variety of subsidies, so the UPC’s surprise announcement demonstrates crucial movement towards the realisation of the Abu Dhabi 2030 economic vision, which lays out several economic diversification benchmarks for the capital. By 2030, the plan calls for the non-oil sector to contribute 64 per cent to the emirate’s GDP. As a reference, non-oil activities contributed 45 per cent to Abu Dhabi’s GDP in 2013, up by two percentage points from 2012.
These approvals suggest a certain appreciation for recent IMF recommendations for the UAE to diversify its infrastructure development away from large-scale projects and focus on smaller construction and urban land development. Given the robust nature of the capital’s economy, it makes sound sense to focus on the building of housing and infrastructure as a way of facilitating the goal of the 2030 economic vision.
Indeed, the projects just approved include a block of three residential towers, which will each be 24 storeys high, facing the Abu Dhabi Corniche and featuring retail and commercial units on the ground floor. In Mohammed Bin Zayed City, a 300-bed specialist hospital on an 82,000 sq metre site was given the go-ahead, while Abu Dhabi University in Al Ain was granted permission to expand.
Significantly, the UPC’s executive director for urban development, Mohamed Al Khadar, said that he expected the trend of approvals to continue, with more to come in the third quarter. Overall, the amount of gross floor area expected to be approved this year would be 15 to 20 per cent higher than in 2014.
This is further validation of Abu Dhabi’s economic strategy to achieve steady growth rather than seeking overrapid development through large projects.
