World Winning CitiesGlobal Foresight SeriesReal value in a changing world

Abu DhabiA world winning city in the making

Emerging World Winning Cities

Dubai – EmergingWorld Winning CitiesAbu Dhabi – Future EmergingWorld Winning City

Source: Jones Lang LaSalle

Jones Lang LaSalle’s World Winning Cities programme is a multi-year research initiative designed toassess future city competitiveness and to predict the rising urban stars amongst the world’s emergingmarkets in Asia, Central and Eastern Europe, North Africa, the Middle East and Latin America.

The programme was launched in 2002 and over the past six years we have assessed the citycompetitiveness of many of the world’s emerging cities, based on rigorous and objectiveassessment of the key drivers of city success. Our research covers not only the standardmeasures of future performance (relating to the economy and demography), but we have alsodeveloped a framework for embracing softer metrics such as sustainability, quality of life, cultureand city governance; issues that are just as crucial in determining a city’s long term success.

In our first study back in 2002, we highlighted Dubai as being amongst a new wave of city winners,possessing many of the pre-conditions to develop into a “World Winning City”. Dubai is now firmlyestablished as one of 21 Emerging World Winning Cities; cities that have achieved success through avariety of attributes ranging from economic size, global influence, human resources and infrastructureinvestment through to socio-cultural dynamism, innovation capability and strong, visionary governance.

The World Winning Cities programme is now seeking to identify the next wave of risingurban stars; cities which we believe will be on the radar screen of the real estate industr y overthe coming decade. This is based on our on-going monitoring and analysis of city potentialin over 130 emerging cities in China, India, CEE, Latin America and the Middle East.

Abu Dhabi stands out as offering amongst the most favourable prospects of any of the Emerging WorldWinning Cities. The city offers shining possibilities for long term growth through substantial wealthcreating opportunities, massive infrastructure investment, a clear vision, strong governance and theavailability of capital.

Abu Dhabi is in astrong position topunch well above itsweight in terms ofinfluence on the worldstage. We believe thecity is on its way tobecoming a city ofsubstance by 2010, aregional hub by 2015and a World WinningCity by 2020, sittingalongside the likes ofShanghai, Mumbai andDubai in terms of globalreach and influence.

WorldWinningCities

WarsawPrague

BudapestIstanbul

Sao PauloSantiago BuenosAires

Mexico City

Abu Dhabi

Moscow

Johannesburg

Dubai Delhi

MumbaiBangalore

Beijing

Shanghai

Guangzhou

Kuala LumpurJakarta

BangkokManila

Cover: The Abu Dhabi skyline

Abu Dhabi •World Winning CitiesCopyright © Jones Lang LaSalle 2008 3

A bu Dhabi has ambitious plans tobecome a truly sustainable worldclass city, based on massiveinfrastructure investment, large

scale real estate development, world leadingcultural facilities and major events, underpinnedby significant population and employment growth.Uniquely for the region, the city is fully

embracing urban master planning, with thelaunch of “Plan Abu Dhabi 2030”. This plan hascreated a structured and clearly articulatedframework for the city’s long term growth.Significantly, the city also has the vision,governance and the funds to deliver on itspromise, and to make the plan work.Abu Dhabi has entered a new era of

leadership and the city epitomises a fresh spirit ofcity building which is almost unmatchedanywhere in the world. The city has learnt fromthe successes and challenges facingneighbouring Dubai, to create a complementaryvision and strategy for Abu Dhabi’s long termsuccess. Abu Dhabi is offering a rare opportunityto rewrite the accepted standards of citycompetitiveness, unencumbered by the weight ofwhat already exists.Jones Lang LaSalle believes that Abu Dhabi

is a city to watch over the next decade, with animportance and influence that is expected toextend well beyond its immediate geography.Abu Dhabi is unique in its potential to create a newdefinition of urbanity for emerging cities based oninfluence rather than size. Its success in thisregard will be closely examined by city strategistsand real estate practitioners the world over.

Abu DhabiMany of the world’s most exciting city building initiatives are now found in the Gulf, a region that is redefining the veryessence of 21st century city competitiveness. Over the past decade the focus of global interest has been firmly on Dubai,a city that has set a new benchmark for visionary, supply-led city growth strategies. Attention is now starting to shift toneighbouring Abu Dhabi, the federal capital of the United Arab Emirates, which has its own impressive vision for the future

A World Winning City in the Making

ARABIAN GULF

GULF OF OMAN

BAHRAIN

QATAR

UNITED ARAB EMIRATES

SAUDI ARABIA

IRAN

OMAN

OMAN•Manama

•DubaiDoha•

Abu Dhabi •

Muscat •

Abu Dhabi Key FactsPopulationTotal, 2007: 930,000 (1)

Growth, % pa, 2007-2015: 6.2% (1)

EconomyTotal, USD Millions, 2007: 59,800 (1)

GDP/Capita, USD, 2007: 64,300 (1)

Real GDP Growth, % pa, 2007-2011: 7.7% (2)

Real EstateOffices, Million sq m, 2007: 1.4 (1)

Retail, Million sq m, 2007: 0.86 (1)

Hotel Rooms, Number, 2007: 10,000 (1)

(1) Metropolitan Region Estimate (2) National Projections

Source: Abu Dhabi Plan 2030,EIU, April 2008Jones Lang LaSalle April 2008

Abu Dhabiepitomises a fresh

spirit of citybuilding

Abu Dhabi •World Winning CitiesCopyright © Jones Lang LaSalle 20084

Success based on size, scale and position in thehierarchy has been heavily tempered by attributesof physical and virtual connectivity, creativity,quality of life and of course the many shades ofsustainability which are leading the 21st centuryurban agenda. Underpinning these concepts, theissue of effective and efficient city governance hasbecome a focal point in city success factors; themost inspiring visions are redundant without thecapacity to implement change.This already challenging context for the city

maker is further exacerbated by the severepressures that inevitably sit alongside the world’scurrent rates of urbanisation; concerns overresource constraints and environment fragility arefocusing attention on the efficient use of our cities

and on the balance of demands made upon themby their many and varied stakeholdercommunities.All of this is occurring against a backdrop of

unprecedented competition for the status of worldcity where the traditional winners are working hardto re-invent themselves and where globalisation isenabling the emergence of a striking new breed ofbold aspirational cities. Such youthful city makingis unafraid of inventing new rules, and with little ofthe weight of historical problems of mature cities,stand to offer the world not just a modern vision ofa future proofed city, but the framework withinwhich to deliver it. It is in this context that webelieve Abu Dhabi promises a revelation to theworld’s city makers.

Abu Dhabi iscreating a newdefinition ofurbanity foremerging citiesbased on influencerather than size

Any scholar of city building and urban futures will have observed the substantialchanges over the last decade in the defining characteristics of a winning city

The Concept of aWorld Winning City

Abu Dhabi •World Winning CitiesCopyright © Jones Lang LaSalle 2008 5

“Abu Dhabi – A World Winning City in the Making” aims tocapture and understand Abu Dhabi’s future competitive position,articulated through our 10 principles of city competitiveness. Thisreport argues that Abu Dhabi offers amongst the most favourablecombination of winning ingredients to become an Emerging WorldWinning City. While the city has a great opportunity, we alsoidentify a number of challenges that must be addressed andovercome if this potential is to be realised.

So what are the factors that lead us to our prognosis that AbuDhabi has the potential to be an Emerging World Winning City?

1. PerformanceFrom Petro Dollars to Global Partnerships

Economic growth is clearly thefundamental marker of a city’s currentposition and potential. In many emergingcities the economics are transitional;from materials and manufacturing toservices, knowledge and eventually evento cultural economies. In Abu Dhabi’scase, oil-based wealth will be theinstrument of an evolution from resourcedependence to a diversified economythat will not just add income, but colour,flavour, depth and a level of maturity toits commercial standing.

Abu Dhabi, as the federal capital of United ArabEmirates, accounts for about 60% of the nationaleconomy. Over the past five years, the city haswitnessed robust economic growth, with realnational GDP growth averaging over 9% per year,and double digit nominal growth recorded over thepast three years. This growth has beenunderpinned by a combination of a stable politicalenvironment, sound macro-economic policy, highoil earnings and the gradual expansion of the non-oil economy.Oil and gas has clearly brought considerable

wealth to the city. Abu Dhabi is amongst theworld’s richest cities, with GDP per Capita levelsthat are now in the same league as the world’shigh-order business centres such as New York,London, Paris and Tokyo.While its oil and gas reserves will continue to

drive the economy, Abu Dhabi’s diversificationstrategy is expected to bear fruit as the city’s roleand stature as a capital city are further enhanced,and its tourism, cultural and commercial functionsare extended.Most economists are predicting continued

strong growth within a range of 7-9% per year,with Abu Dhabi’s performance boosted by furthereconomic reforms, economic diversification andmassive public and private sector investment.Economic growth rates in Abu Dhabi compare

favourably with most of the world’s majoremerging market business hubs. Only the mainbusiness hubs in China and India, which possessstrong internal growth drivers, are expected torecord higher rates of economic growth than AbuDhabi over the next five years.The city is in the rare position of having strong

economic growth prospects and very high wealthlevels, a combination virtually unmatchedanywhere else in the world.

2. PopulationWhere Scale meets Society

While small by mega city standards, AbuDhabi has the potential to punch far aboveits weight on the global arena. Its intentionto grow through attracting a cadre of newresidents to fulfil its promise as adiversified, culturally rich and continuouslystable environment, gives a vision of aharmonious society which would be theenvy of many a city. The provision of worldclass services for this population in ameticulously managed urban environmentunderpins this growth policy.

Abu Dhabi’s future growth strategy is underpinnedby rapid population growth and in-migration.

Source: EIU, Experian-BSL

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Principles of City Competitiveness The Ten Principles ofCity Competitiveness

PerformanceEconomic GrowthDiversification, Partnerships

PopulationGrowth, Age,Distribution

PlanningControlled GrowthVision, Regeneration

PowerGovernance, InfluenceConnectivity, Funding

PlaceMakingEvents, Culture,Meeting Places

PuritySustainability, Quality ofLife, Environment

PeopleSkills, Education,Entrepreneurship, CreativityInnovation, Inclusion

PhysicalArchitecture, SkylinesInfrastructure

ProcessesBusiness FriendlinessStructures

PropertyRegulation, TransparencyStock, Performance

Strong economicgrowth rates and veryhigh wealth levels are

in a combinationvirtually unmatched

anywhere in the world

ShanghaiMumbai

Abu DhabiDubai

MoscowJakartaManila

Kuala LumpurBuenos Aires

WarsawJohannesburg

SantiagoIstanbulPrague

Sao PauloBangkokBudapest

Mexico City

0 1 2 3 4 5 6 7 8 9 10 11

Emerging World Winning Cities,GDP Growth 2007-2011

Abu Dhabi •World Winning CitiesCopyright © Jones Lang LaSalle 20086

DubaiAbu DhabiKarachiRiyadhMumbaiShanghai

CairoIstanbulTehran

BangkokSingaporeHong Kong

Population Change 2005-2015

The city has set out a clear vision and wellplanned strategy for growth, articulatedthrough the “Plan Abu Dhabi 2030 - An UrbanStructure Framework Plan”, launched in2007. The plan sets out a 25 year vision, andeffectively lays the foundation for growth overthe next 100 years.The emphasis is on sustainable, controlled

development that is sensitive not only to thephysical environment but also preserves andcelebrates Abu Dhabi’s cultural identity. Thisis in sharp contrast to many other emergingcities, which have often been at the mercy ofuncontrolled development, and any masterplanning has been difficult to enforce and theplans rarely extend beyond a five yearhorizon.Abu Dhabi's urban planners have clearly

watched Dubai's less controlled growth and,arguably, an erosion of its local heritage toformulate their own expansion agenda, onethat puts culture and community ahead ofpure commercialization.The city’s plan supports the diversification

away from its oil economy, with an emphasison culture/tourism, government/diplomatic,real estate and commerce (such as Islamicbanking which is growing at a faster rate thanconventional banking).The plan allows for a new high density

CBD development adjacent to the old corewhich will focus on commerce and finance. Asecond city centre - the “Capital District” – willprovide complementary activities relating togovernment, national institutions andknowledge based sectors.Ultimately such master planning is about

creating long term certainty, which will serveto improve market transparency and generateand attract new business activity to AbuDhabi. However, in this context, the cityplanners need to ensure that the plan isenforced and landowners adhere to thezoning and development regulations.

One of the world’sfastest growing richcities over the nextdecade

Above: Proposed developments of Danet Abu Dhabi and right, Al Gurm Resort

The government is planning for its population togrow from just under one million residents, toover three million by 2030 – implying 100,000new residents in Abu Dhabi every year. The mostbullish forecasts point to a population of up tofive million by 2030.Abu Dhabi’s impressive population dynamics

are clearly highlighted when put into aninternational context. The city’s projectedpopulation growth rate at over 6% a year (to2015) compares to rates of 2-3% per year in theworld’s most rapidly growing emerging cities. Forcities in advanced economies, population growthrarely exceeds 2% per year. At over 6% a year,Abu Dhabi will be one of the world’s fastestgrowing rich cities over the next decade.

3. PlanningCreating a Future History

Analysts of urban futures areencouraging city makers to be edgy andto take risks, to be experimental and tothink of injecting excitement as well asefficiency into the urban form. Ultimatelycities need a distinct personality and wayof communicating with their residentsthat reflects the 21st century citizen.Building this kind of vibrancy into themaster planned context that Abu Dhabihas set out may seem a challenge at firstglance, but it will be the look, feel,functionality and flexibility of each of theplan’s components and how they sittogether in this new urban blueprint thatwill be the arbiter of long term success.

Abu Dhabi has fully embraced the concept ofurban master planning and is mapping out itsfuture in a structured way, an initiative whichis unique amongst Middle Eastern cities.

Source: EIU, Miscellaneous National Sources, 2008

USD’000s

New YorkLondonDohaParis

Abu DhabiFrankfurtTorontoTokyoMilan

SydneySingapore

KuwaitDubai

Hong Kong

GDP /Capita Comparisons 2007

0 20 40 60 80

Source: United Nations, Plan Abu Dhabi 2030. Dubai Statistics Centre(Dubai growth relates to 2005-2010)

% Annual Change0 1 2 3 4 5 6 7 8

Urban master planningis creating long termcertainty

Abu Dhabi •World Winning CitiesCopyright © Jones Lang LaSalle 2008 7

4. PowerConnection, Control and Constancy

The role of the City and its relevancein a globalising world is a perennialdebating point in the cities’ community.While it is true that international citiesoften have more commonality witheach other than with other cities intheir own countries, it is also true that,to be successful, any city must be anactive contributor to its own region.Cities that have a natural influencebeyond their boundaries whilesuccessfully nurturing quality growthwithin them are those that manage thebalance between their very differentroles in the local, regional and worldcontexts.

Abu Dhabi is the economic powerhouse andthe central player of the United Arab Emirates.It is the ultimate “power city” measured interms of its energy resources, with anestimated 10% of the world’s proven oilreserves and 5% of gas reserves.However, power is also measured in terms

of political leadership and influence, which ourresearch has identified as a critical factor in acity’s success. Some of the world’s dynamiccities such as Dubai, Moscow and Shanghaihave succeeded on the back of dynamic andvisionary leadership whose sphere of influenceextends well beyond their city limits.Abu Dhabi has entered a new era of city

leadership through His Highness SheikhKhalifa bin Zayed Al Nahyan (Ruler of AbuDhabi and President of the UAE) and HisHighness Sheikh Mohammed bin Zayed AlNahyan (Crown Prince of Abu Dhabi). Theirvision of transforming Abu Dhabi into asustainable and authentic global city hasguided the creation of Abu Dhabi’s outward-looking development strategy. This strategy willbuild on Abu Dhabi’s historic paternal role thatactively supports overseas community andsocial projects.Abu Dhabi’s sphere of international

influence is also being extended through itsposition as a major source of global capitalflows, not only from its sovereign wealth fundsbut also substantial private family capital. TheAbu Dhabi Investment Authority (ADIA), forexample, is the world’s largest sovereignwealth fund, and one of the world’s largestinstitutional investors.Whilst Abu Dhabi is extending its influence

globally, it still needs to work hard to integratethe city into the global and regional networks,not only physically but also technologically andin terms of corporate, cultural and academicconnectivity.

5. Place MakingFrom Oil to Opera

The art of place making has takencentre stage in the armoury of citystrategists. In Abu Dhabi, place-makingis embedded in its growth strategythrough an emphasis on developingsocial, cultural, religious and leisuredestinations, whilst both cultivating andcelebrating the city’s cultural heritage

Abu Dhabi has a unique opportunity to create theauthentic modern Arabic and Islamic city, unlikeDubai which is showing some traits of a globalAsian city. The government intends to combinetraditional and modern, utilizing themes, patternsand structures that are unique to Arabic society.Maintaining the social, religious and culturalvalues of the Arab community are a key aim, andmosques form an integral part of the plan, asrepresented by the Grand Mosque District whichwill be a key focal point for the city.A Cultural District is to be developed on

Saadiyat Island, which will be transformed into aninternational tourist destination. The district isexpected to house five international museums,including the Guggenheim Museum, the LouvreAbu Dhabi and the new Performing Arts Theatre.The city’s strategy is to firmly place Abu Dhabi

on the upmarket international tourist map. Thecreation of Abu Dhabi Tourist Authority and theformation of the national airline, Etihad, havebeen pivotal to the city’s development as a majortourist destination. Annual tourist visits whichstood at 1.8 million in 2007 are projected tovirtually double to 3.3 million by 2013. PublishersConde Nast, has identified Abu Dhabi as one ofthe world’s top 10 future tourist destinations,unsurprising as it increasingly attracts the bestartists with the opulent Emirates Palace Hotel

The ultimate new“power city” in terms of

energy resources,political leadership and

global influence

A unique opportunityto create the authenticmodern Arabic and

Islamic city

Above: New Performing Arts Theatre on Saadiyat Island

Abu Dhabi •World Winning CitiesCopyright © Jones Lang LaSalle 20088

hosting world class theatre and opera. Eventssuch as FIA’s Formula 1 World Championships in2009 and the Abu Dhabi Golf Championship willfurther boost tourism, whilst the opening in 2007of ADNEC (Abu Dhabi National Exhibition Centre)will help position the city as a conferencedestination.

6. PurityQuintessentially Sustainable

The extent of the built environment’scontribution to climate change is nowwell established. The quest of theproperty market to create buildingsthat minimise harmful emissions sitsalongside the quest of the city makerto create cities that also enableclimate friendly behaviour. The greenor eco city movement is muchdiscussed but still in its infancy. WhileShanghai’s Dongtan initiative has ledthe headlines, Abu Dhabi’scommitment and delivery would be avital showcase for the rest of theworld on integrating policy andpractice and on enabling behaviourchange through the efficiency of thebuilt environment.

One of the key pillars of the Abu Dhabi 2030 planis sustainability. The city is committed to creatingthe “sustainable city” by respecting its naturaland cultural resources, and is putting in placemeasures to protect and conserve its ecologicalsystems.The plan speaks to the need for the creation

of green spaces, a “sand belt” (an adaption from“green belts”) has been designated and all future

development will be guided by a Green Gradient.The Abu Dhabi Future Energy Company has

been set up to develop the Masdar Initiative,which is committed to identifying alternativeenergy sources such as solar and wind power,promote sustainable development and developan exemplar project. The Masdar citydevelopment will be the world’s first zero-carbon,zero-waste city. This new six sq km community,when completed in 2013, will house up to 50,000residents and use 75% less power than aconventional city.Abu Dhabi has a huge potential to take the

lead in addressing sustainability in emergingcities. Sustainability initiatives in emerging cities,such as the Dongtan Eco-City in Shanghai, arestill an exception rather than a rule.The city is also advocating green building

practices. Unlike established cities, Abu Dhabi isunencumbered by the need for the retro-fitting ofexisting buildings, so it has a rare opportunity tobecome the global showcase of a sustainable cityin terms of all its property assets.

7. PeoplePopulating the Vision

One of Abu Dhabi’s greatest challengesis in growing its people alongside itsphysical environment. The city needstalent to foster its ambitions but alsoneeds to be tolerant with regards to theneeds of those new companies andoperations who it hopes will help deliverthat vision. The policy interventionsneeded to ensure balanced growth willno doubt be sensitive and requirecareful management.

Abu Dhabi has a large expatriate community.Currently around 80% of the population of AbuDhabi city are non-UAE nationals, a proportionthat will undoubtedly rise as immigrationincreases. Even the most cosmopolitan of worldcities such as London and New York have nomore that around 40% of their residents bornoverseas. Abu Dhabi will need to adapt to a verydifferent demographic model than that found inwell-established cities, and its strategy will needto focus on managing and facilitating populationflows. Whilst rapid population turnover cancreate incredible dynamism and is a feature ofsome of the world’s most vibrant global cities, italso brings challenges relating to communitysoul and social cohesion.On the innovation front, the city is taking

steps to capture and cultivate the innovationcapabilities of its workforce, and to attractfootloose knowledge workers. The CapitalDistrict has been designated as the “city brain”which will focus of knowledge based sectors,research institutions and universities. The

Abu Dhabi has anopportunity to becomethe global showcase ofa sustainable city interms of all its propertyassets

Above: ADNEC, the Abu Dhabi National Exhibition Centre. Below: The Masdar City development

Abu Dhabi •World Winning CitiesCopyright © Jones Lang LaSalle 2008 9

establishment of campuses of Paris-Sorbonneand New York University will help improvelinkages with the global academic network, andtheir alumni will act as future global “ambassadors”for Abu Dhabi.Abu Dhabi has recognized that an overhaul of

the education system and population policy isneeded to bring more young Emirati citizens intothe labour force and reduce reliance on foreignworkers. However it will be impossible for AbuDhabi to realise its ambitious growth strategywithout imported labour, and the greater use ofEmiratisation labour quotas could discouragefirms from locating in the city.

8. PhysicalBuilding The Future

If the pressures of urbanisation in mostof the world are forcing the city maker torethink the shape and functionality of thecity, Abu Dhabi’s plans have alreadyanticipated the pressure points andfactored them into their blueprint. Whileminimising uncertainty has been centralto the city planning objective, thequestion of how the world’s companieswill operate in 30 years and the types ofspace, buildings and even cities they willchose to operate in is in itself a difficultuncertainty to manage.

The government’s strategy of focusing onculture, environment and people is beingunderpinned by massive infrastructureinvestment. The city has had the foresight toplan for infrastructure ahead of time, and anestimated USD 200 billion is earmarked forfuture projects.Abu Dhabi has been a strong advocate of

private sector involvement in the developmentof infrastructure and real estate, with a numberof mega projects being led by the privatesector. Several of Abu Dhabi’s islands arepoised for massive real estate development.They include Yas Island, one of the largestprojects in the Middle East; Saadiyat Islandwhich is being developed as a cultural island;Suwwah Island and Reem Island which areemerging as main commercial areas; and LuluIsland which will include residential, resorts andcommercial space.Through the extensive transport

infrastructure investment, the city is ensuringworld-class international connectivity, as well asan advanced multi-modal transport networkwithin the urban region. The expansion of AbuDhabi Airport is underway which will increasecapacity to 20 million passengers by 2010. Ametro system is planned which will be linked tothe Dubai Metro, and work is underway toenhance and extend the road network.

Major Real Estate Projects

No

••1155

••1144 ••1122

••1100••1111

••1166••1177••99

••88••55

••66••44 ••22

••11••33••77••1133

The Gate complex, part of Shams Abu Dhabi on Reem Island

11223344556677889911001111112211331144115511661177

11

22

33

44

55

66

77

88

99

1100

1111

1122

1133

1144

1155

1166

1177

1188

Yas IslandSaadiyat IslandAl Raha BeachReem IslandLulu IslandSuwwah IslandMasdar DevelopmentCentral MarketDanet Abu DhabiMohammed Bin Zayed CityKhalifa City AMina ZayedBuilding Materials CitySaraya Abu DhabiAl Gurm ResortCapital CentreZayed Sports City

Source: Jones Lang LaSalle, 2008

Yas Island

Saadiyat Island

Al Raha Beach

Reem Island

Lulu Island

Suwwah Island

Masdar Development

Central Market

Danet Abu Dhabi

Mohammed Bin Zayed City

Khalifa City A

Mina Zayed

Building Materials City

Saraya Abu Dhabi

Al Gurm Resort

Capital Centre

Zayed Sports City

Al Ghadeer

ALDAR

TDIC

ALDAR

Sorouh 20% Reem Investments 20%Tamouh 60%

Sorouh

Mubadala (part)

Mubadala

ALDAR

AL Qudra

AD Government

AD Government

-

Manazel

Sorouh

ALDAR

ADNEC

Mubadala

Sorouh

40 Billion

27 Billion

15 Billion

8 Billion

-

-

22 Billion

-

9.3 Billion

4 Billion

1.6 Billion

55.7 Million

817 Million

-

272 Million

2.2 Billion

-

-

Covering 2,500 hectares, housing the Ferrari Theme Park and various otherleisure attractions.

Covering 2,700 hectares, the master planned development will house the LouvreAbu Dhabi, the Guggenheim and a mix of residential, commercial and leisure.

A master planned development, housing 120,000 residents. Consists of 11precincts, each with a distinct theme and appeal.

Covering over 6 million sq m, a master planned development – Main districtsinclude: The Gate on Shams Abu Dhabi developed by Sorouh, Najmat AbuDhabi developed by Reem Investments and City of Lights developed by Tamouh.

A 3.5 million sq m development that will include residential villas & apartments,7 luxury hotels, including 5 and 7-star hotels, first class resorts, offices,shopping malls, international schools and various sports facilities. Will house apopulation of 20,000 people.

Envisioned to be the new commercial and financial CBD of Abu Dhabi,ultimately offering around 2.1 million sq m. The CBD will cover Suwwah Islandas well as adjacent parts of the main Abu Dhabi island and Reem Island.

Masdar Initiative is the world’s first zero carbon, waste and car free city. It aimsto encourage renewable energy research and development.

Covering 5 hectares the project is located in the heart of Abu Dhabi Island,featuring a mix of residential, souk retail and commercial components.

A master planned community, featuring a 210 room Holiday Inn located on themain island of Abu Dhabi.

Comprises 347 residential towers, divided into five sectors. The project willhouse 50,000 people.

About 70 plots comprise the development area which is located 25 kilometresfrom Abu Dhabi's city centre and the timeframe for completion is about five years.

Port Mina Zayed comprises 21 berths with a total quay length of 4,300m andcapacity to handle about 900,000 tons of general cargo annually. A $765 milliontwo phase development programme is currently well under way.

A 230,000 sq m development will be the hub for commercial services andtrading activities related to construction and building materials. Will include thefirst building materials exchange in the Middle East.

Extends along Abu Dhabi’s Corniche, comprising of high rise residential &commercial towers.

A residential and tourist destination, comprising 59 private homes and a 161suite 5 star resort.

Upon completion in early 2011, Capital Centre will house a new micro-city of 23towers, including 6 branded hotels, 4 commercial buildings, 8 residential andserviced apartment complexes and 5 mixed use developments

A master planned community with various sports facilities, in addition toschools, residential and office components

A mixed-use, self sustained community hosting a variety of educational,recreational, social and commercial amenities

Projects Developer Value USD

Abu Dhabi • World Winning CitiesCopyright © Jones Lang LaSalle 200810

DenmarkSingapore

USAGermany

UAEJapanItalyBrazilChinaIndia

Russia

Global Comparisons Regional Comparisons

9. ProcessesPolicies to Please

Issues of market transparency andbusiness friendliness are crucial toinvestors and occupiers. The manydetailed questions of tax and regulation,of transparency and law and ofinformation and procedure are a clearfeature in city selection.

The UAE is ahead of its regional peer group interms of its business processes and the qualityof its business environment. Structural reformsand a more outward oriented business policy areexpected to move the economy further into amore liberal trading environment.However, Abu Dhabi in particular has been

slower to liberalise its economy and continues toimpose restrictions of foreign ownership andlimits competition in key economic sectors. Thisis reflected in Abu Dhabi’s capture of a relativelylow proportion of FDI coming to the UAE. To date freehold ownership for non GCC

investors is limited to 99 year leaseholdinterests in approved 'Investment Zones' outsideof Abu Dhabi Island (e.g. Reem Island and RahaBeach). There are proposals to allow freeholdownership in a number of upcoming projects(indeed the success of projects such as YasIsland and Saadiyat Island depends largely onthis), but there are as yet no proposals to allow

freehold ownership on Abu Dhabi Island itself. While Abu Dhabi currently has no operating

free zones, the ICAD (Industrial City of AbuDhabi) special economic zone has many of thecharacteristics of a free zone (e.g. businessfriendly laws and regulations). However, ICADdoes not offer companies the additional benefitof exemption from duty on goods imported intothe zone that is available within free zones.Two proposed free zones have been

announced to date, the Abu Dhabi Airport FreeZone and the Khalifa Port Industrial Free Zone. Anew law enabling the establishment of these freeZones is imminent.

10. PropertyThe Future of Space

History reminds us of the inevitability ofthe property cycle. While these cyclestake different forms, shapes and timeperiods in which to play out, theexperiences of both new and maturecities attest to both the excitement ofresponding to demand but of the needto pace and temper that provisionagainst constant revisions of marketcondition. With such scale and ambitionevident over such a time period, theAbu Dhabi phased development planwill need to be every bit as prescientand flexible as any city that everattempted to live by the “build it andthey will come” principle.

The Abu Dhabi property market has entered anew era since 2005 when new regulations wereintroduced which enable UAE nationals to tradeland and real estate, allow freehold ownership forGCC nationals in “Investment Areas” and permitleasehold ownership for non-GCC nationals.The relaxation of ownership regulations has

turbo boosted the property market and iscontributing to a gradual improvement in markettransparency. Nonetheless, the latest JonesLang LaSalle Real Estate Transparency Index(2008) reveals that the city still lags Dubai, andin a global context, real estate markettransparency is below advanced markets.Further improvements in market transparencywill be needed to create more open marketsthrough the better provision of accurate marketinformation and performance benchmarks,greater enforceability of contracts and clarityover land title. The development of a fullyaccountable and publicly listed real estate sectorwill also force the pace of change.The property market is currently

characterised by shortages of high quality spaceacross all main sectors. Whilst this under-provision is helping to provide a short-term boostto rents and values for real estate owners, these

Improved markettransparency will becritical to creating anopen and globallyconnected city

A more outwardoriented businesspolicy is being created

Source: EIU, April 2008; Score 10=High, 1=Low

Business Environment Attractiveness 2008

5 7 9

UAEQatar

BahrainSaudi Arabia

TurkeyJordanKuwaitEgypt

PakistanIranLibya

3 5 7 9

Real Estate TransparencyRegional Comparisons

Source: Jones Lang LaSalle Real Estate Transparency Index, 2008

Highest

Lowest

Dubai

Bahrain

Abu DhabiQatar, Saudi Arabia

Oman

Kuwait

Abu Dhabi • World Winning CitiesCopyright © Jones Lang LaSalle 2008 11

shortages constrain the development of anefficient real estate sector and economy.Conversely, substantial new supply will becoming onto the market over the next five years,and the government needs to ensure effectiveplanning mechanisms are in place to avoid over-supply, a scenario which has characterised manyother emerging real estate markets. Under-supply is a feature of all sectors:

Offices: Abu Dhabi currently has an estimatedoffice stock of 1.4 million sq m but much of thisspace is of low quality and fails to meet therequired standards of international occupiers.The office market is expected to remain under-supplied over the short-to-medium term puttingfurther upward pressure on already high rents.The market is unlikely to move into balance untilat least 2011.

Residential: High population growth rates andhigh expatriate immigration is putting significantpressure on the residential market, causingrents to rise by as much as 40-50% over thepast year. Several mega projects are underway,but significant supply is not anticipated until2012-2013.

Retail: Compared to neighbouring Dubai, theretail market is small with four large malls and atotal quality stock of approximately 390,000 sq m(compared to 1.7 million sq m in Dubai). The marketis expected to remain undersupplied until 2012.

Hotels: Historically hotel supply has beenlimited, with the market currently totalling around10,000 rooms, of which around 6,000 are 4 and5 star quality. With several large scale projectsannounced (such as Saadiyat Island, Yas Islandand Al Raha Beach), over 20,000 new rooms arelikely to enter the market between 2008 -2013.

Industrial: The majority of industrial real estatein Abu Dhabi is located within ICAD (IndustrialCity of Abu Dhabi). This area is not currently builtout and there are major plans to upgrade andexpand the stock of industrial and logistics spaceover the next few years.

This city has had theforesight to plan forinfrastructure ahead

of time

Emirates Palace Hotel

Like any city prepared to be single minded in itsgrowth ambitions, Abu Dhabi will face manychallenges of balance, timing, style, choice anddisappointments. Unlike most cities its governancemodel and basic resources allow it a formidableplatform from which to operate. How the ambitionsof this rapidly emerging city are being translatedinto a built reality and moreover, how this reality isincrementally received by the market, will be acrucial process to assess over the coming years.But in achieving even part of the vision, Abu Dhabiwould be in a good position to claim a newcategory of world city status – one judged by itspotentially unique mix of city quality, sustainability,wealth, culture harmony and iconic style.Abu Dhabi is a well governed city, it is being

carefully planned, it has the funds to ensure thoseplans are deliverable; it has ambition and iscreating a sense of place through events,buildings and cultural facilities. The city has learntfrom the successes of Dubai to create a long termvision, which complements its neighbour’sambitions. Significantly the government has thebacking and support of its population, by seekingto maintain the values, social arrangements andculture of the Arab community.

Abu Dhabi is breaking the mould of whatconstitutes a traditional model of city planning, butthe city will need to tackle the challengesassociated with very rapid growth. Abu Dhabi isseeking to create a new global city within aremarkably short time frame, and although it isadopting a more cautious approach to growth thanDubai, the city makers will need to carefullymanage its ambitious expansion plans. The citywill need to cultivate indigenous growth, andensure sufficient differentiation in its offer withneighbouring Dubai.From a property perspective, we believe the

key challenge is about market transparency – notonly because a more transparent market attractsglobal property investors - but crucially it is a keyconstituent of an open and globally connected city.The city has an imperative to attract top qualityMNCs and people who will “feed” the city,particularly with intellectual capital - allowing it togrow. A transparent market will also project thecity’s vision and profile to the outside world.If the city can tackle these challenges head on,

Abu Dhabi will be on its way to becoming a city ofsubstance by 2010, a regional hub by 2015 and aWorld Winning City by 2020.

The Challenges Ahead

LondonMoscowParisDubaiZurichDohaMilanMadrid

Abu DhabiStockholmFrankfurtIstanbulWarsaw

AmsterdamBrusselsRiyadh

BudapestBerlinPragueCairo

Prime Office Rents, EMEA Region, 2008

Data as at 1 January 2008. Source: Jones Lang LaSalle

USD sq m/pa0 500 100 1500 2000 2500

Abu DhabiStrengths and Weaknesses

Strengths /OpportunitiesGrowth underpinned by clearlyarticulated urban master plan

Ability to deliver on promise due togovernance, planning and financialresourcing

Dubai has helped to establish regionalcredibility and show ability to deliveron supply-led growth strategies

Opportunities to create the authenticmodern Arabic and Islamic city

Potential to take global lead inaddressing sustainability in emerging cities

Weaknesses /ChallengesManaging speed of change over ashort time frame and creating a worldwinning city which respects localcultural history

Small existing population - lacks internal growth drivers of other dynamicemerging cities such as in India and China

Need to ensure sufficient differentiationin offer between Abu Dhabi and Dubai

Diversification - the economy willcontinue to be dependent on oil

Creating a transparent businessenvironment to attract the best MNCsand labour skills

COPYRIGHT © JONES LANG LASALLE IP, INC. 2008. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent ofJones Lang LaSalle. It is based on material that we believe to be reliable. Whilst every effort has been made to ensure its accuracy, we cannot offer any warranty that it contains no factual errors.

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Contacts

To find out how Jones Lang LaSallecan assist in making real estatedecisions in Abu Dhabi, the UAEand the Gulf Region contact one ofthe following people:

Blair HagkullManaging Director, MENA Jones Lang LaSalle + 971 (0) 4 426 6999 email: Blair.Hagkull@jll.com

Abood Rabbat Associate Director, Abu Dhabi Jones Lang LaSalle + 971 (0) 2 446 1220 email: Abood.Rabbat@jll.com

Craig Plumb Head of Research, MENA Jones Lang LaSalle + 971 (0) 4 426 6999 email: Craig.Plumb@jll.com

Kazim Ali Research, Abu Dhabi Jones Lang LaSalle + 971 (0) 4 446 1220 email: Kazim.Ali@jll.com

Tania Toma Research, Dubai Jones Lang LaSalle + 971 (0) 4 426 6999 email: Tania.Toma@jll.com

Jeremy Kelly Director - World Winning Cities Jones Lang LaSalle (London) + 44 (0) 20 3147 1199 email: Jeremy.Kelly@eu.jll.com

May 2008

Real value in a changing world