It’s a win-win situation with developers and buyers in Abu Dhabi’s property market

“Come and build your home…”

Abu Dhabi developers are now making this pitch and finding takers willing to invest in plots and build their own property. Aldar Properties tested the extent of demand by offering plots for sale at its Alreeman development – and ended up with more than Dh1.6 billion for its efforts. All within a matter of a few days in late January.

Villa plots located in Al Shamka, were going for Dh690,000 a pop, while those designated for commercial purposes were set Dh4.69 million. A few days ago, Aldar launched another plots-only project, the Lea at Yas Island, offering over 200 of them, with prices from Dh990,000.

“There will always be interest in plots, especially among Emirati buyers,” a senior industry source said and has adviced developers on ways to monetise their land bank. “Despite being gifted land, some of the younger Emiratis would still want residential options where the infrastructure is already being set up. That’s why they are going for plots in new communities, whereas at the locations where they have been granted land, the infrastructure and community-feel are yet to be felt.

But buyers need to be well aware that investing in plots come with certain responsibilities. Master-developers will have a clause that they build their property within a four-year period. And buyers will also have to stick rigorously to the design guidelines that master-developers will have for anything they plan to build.

But if played right, there is much investors can get out of the plots. “Plot sales have seen healthy demand lately… unlike previous years, investors are now focussed on sustainable communities,” said Vaibhav Sharma, Chief Strategy Officer at MPM Properties, the real estate arm of Abu Dhabi Islamic Bank.

Will 2019 be all about plots and less about property? The first three months saw about 1,700 homes delivered in Abu Dhabi, according to JLL, which is slightly less than the 2,000 plus units other consultancies estimate.

In the interim, plot sales could give Abu Dhabi’s leading developers an option to bring in much needed revenues. But this will be a “short-term trend before demand picks up again for offplan,” suggests one industry source.

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