The report, Abu Dhabi Real Estate Market Q2 2010, said average occupancy rates for quality hotels in Abu Dhabi declined from 80 per cent in the first five months of 2009 to 58 per cent for the same period this year.

While established hotels on Abu Dhabi Island retained occupancy levels of around 70 to 80 per cent between January to May, the report said city centre hotels are expected to perform better than those located in new master developments.

Average hotel rates dropped 35 per cent to AED830 for the first five months of 2010 due to supply entering the market, said the report. As further supply enters the market rates are expected to fall further.

An additional 7,5000 rooms are expected to enter the hospitality space by the end of 2010, increasing the current supply by almost 75 per cent, with the opening of The Rocco Forte Hotel, Jumeriah Etihad Towers and Hyatt Capital Gate.

The report also said that Abu Dhabi’s residential rental market will continue to be under-supplied in the coming years as a result of project cancellations.

Despite 251,000 residential units expected by 2013, the report has concluded that there is a “mismatch between supply and demand” in the capital’s residential housing sector for middle market segments. It said project cancellations and construction delays have decreased future supply estimates by around 60 per cent since Q2 2008.

It added: “For affordable and middle market segments, there is a significant under-supply, whereas the upper segments of the market are becoming over-supplied. Forthcoming over-supply in the upper segment of the market is expected to result in a continued decline in average rentals. Lower and mid-market segments will remain expensive relative to affordability due to an overall shortage of supply in these segments.”

However, it continued: “New supply of affordable to middle income housing will be quickly absorbed.”

The report also said the retail market is under-supplied, forcing many consumers to shop in Dubai resulting in a loss of opportunity for the Abu Dhabi retail sector. However, it added: “With increasing supply, the retail market will become more competitive and the market will separate between high and low quality product.”

Office rents in the capital are expected to fall inline with increasing vacancies creating opportunities for tenants to upgrade their space without increasing cost. The report said despite many developers scaling back or delaying their proposed developments, total office stock is expected to reach 3.6 million square meters by the end of 2013.

Duncan Anderson, GMS chief executive, said the five-year US$50m ljara facility will help fund the oil services firm’s future expansion plans.

Tirad Mahmoud, ADIB chief executive, said the bank hopes to build on this agreement and provide the firm with other long term financing options going forward.

He added: “We hope to customise our other products and services to their requirements and strengthen this relationship.”

In its latest financial results, the bank posted a net profit of AED2.03bn for the first six months of the year, compared to AED1.67bn for the same period last year.

Net profit for Q2 this year reached AED1bn, up 10.4 per cent on Q2 2009 when net profit reached AED907m.

Operating income reached AED3.5bn in the first six months of 2010, 14.9 per cent up on the same period last year. Total assets at June 30 this year were AED202bn, 11 per cent up on the same period last year. Loans to customers increased 8.7 per cent during the first half of 2010 to AED135bn, and non-performing loans during the same period increased AED386m to AED2.07bn.

Nasser Alsowaidi, NBAD chairman, said: “In spite of the challenging market conditions, NBAD posted solid financial results for the second quarter and first half of 2010. The group continues to benefit from its strategy of diversified income sources, continuous investment in its franchise, robust risk management and focusing on relationships.”

ADPC as contracted ED Zublin AG and Al Jaber Transport & General Contracting for the detailed design, construction, fit-out, testing and commissioning of the offshore port’s civil and structural building works.
Work is due to begin immediately and is scheduled for completion in August 2012, in time for the ports Q4 2012 phase one opening.
Contracts have been awarded to joint ventrue firm Al Jaber-GIS for a AED350m construction contract, and Larsen and Toubro for a AED300m deal to build electrical power systems, distribution substations and civil buildings. In 2007, ADPC awarded the AED5.5bn dredging contract to a consortium including Archirodon Construction, Boskalis Westminster Middle East and Hyundai.

In its latest financial results, the developer responsible for Abu Dhabi’s Shams development posted a Q2 net profit of AED20m, compared to AED151m for the same period last year. Net profit for the first six months of year was AED152m, compared to AED281m for the same period last year.

Investment properties under development increased from AED257m at December 31, 2009, to AED487m during the period ending June 30, 2010.

The company’s liquid funds decreased during the first six months of the year to AED1.6bn as a result of payments made to contractors for development projects, and the net asset value increased 2 per cent to AED6.3bn at June 30, 2010.

General administrative expenses amounted to AED166m for the first half of the year, while selling and marketing expenses were AED23m, slightly less than the same period the previous year.

Speaking at the official launch of the World Ports and Trade Summit 2011 in Abu Dhabi yesterday, Tony Douglas, a former Heathrow CEO, said the first phase will be ready on time, allowing nine million tonnes of general cargo to be facilitated in the port.

Douglas, who was appointed CEO in June, said: “Khalifa Port and Industrial Zone is 420sq km, to put that into context that is four times the size of Abu Dhabi Island, that’s two-thirds the size of Singapore and that is 25 per cent of the land mass of Greater London. Khalifa Port, therefore, is very much the size of a small country that requires world class infrastructure and world class ports and the Khalifa Port will have the first phase open in Q4 2012.”

Douglas also defended the timing of the Khalifa Ports project, which is to replace Abu Dhabi’s existing Mina Zayed port, adding: “Given what has happened in the world economically in the past two years, I think it is important to remind us all that this is part of a 2030 strategy, not a 2013 strategy. This is a long-term strategic investment in order to be able to achieve economic diversification.”

At next year’s summit, Douglas said the ports firm will announce plans for the project in “greater detail”, including details of the operating model for the new port.

He said: “Currently we have Abu Dhabi Terminals that operate Mina Zayed. We are engaged in a discussions with Abu Dhabi Terminals to determine what the optimum structure is for Khalifa. We have 26 months left on the construction schedule before Khalifa Port is available to operate and between now and then will determine the precise operational model.

“At the Port Summit in March we will be prepared then to express with great clarity the way in which that operating company will work and the shareholding structure.”

In its latest financial results, the bank saw net profit drop from AED2.1bn for the first six months of 2009, to AED1.5bn for the same period this year.

Total income also dropped 11 per cent to AED4.9bn, compared to AED5.5bn for the same period last year.

Total portfolio impairments for the first half of 2010 reached AED2.6bn, with the bank increasing provision coverage to 117 per cent from 105 per cent at the end of 2009.

The corporate banking arm of the bank attracted AED12bn of additional customer deposits, to reach AED95.2bn, but the loan portfolio dropped 4 per cent to AED165.1bn during the first months of the year from December 31, 2009.

Total income from Emirates Islamic Bank dropped 18 per cent in the first half of 2010 to AED322m from December 31, 2009, but customer accounts grew 8 per cent at AED22.1bn.

HE Ahmed Humaid Al Tayer, Emirates NBD chairman, said: “Emirates NBD delivered a robust performance in the first half of 2010, reflecting the strength of our business model and cementing our position as the region’s leading banking group. Whilst uncertainties and challenges remain in the global economic environment, we remain optimistic about the sustainability of the expected economic recovery both globally and regionally and our ability to capitalise on value-adding opportunities for our shareholders.

“We are confident about the strength and capabilities of Emirates NBD to continue to realise more success.”

Going forward, the bank said it will continue to focus on balance sheet optimisation, improving profitability and enhancing risk management. It also said it will continue to invest “selectively” for future growth.

Passenger traffic for the first six months of 2010 reached 22,554,445, up from 19,397,089 in the corresponding period last year.

The airport has also reported twelve consecutive months of double-digit growth in passenger traffic from June 2009 to May 2010, with 3,684,192 passengers passing through the airport in June 2010.

The average monthly passenger traffic in the first half this year stands at 3.7 million as compared to 3.1 million during the corresponding period in 2009. The year to date daily average passenger throughput at Dubai International Airport has reached 123,000.

Cargo continued its upward trend throughout the first half ending with a year to date movement of 1,101,856 tonnes of freight compared to 874,828 tonnes during the same period in 2009, an increase of 26 per cent.

Paul Griffiths, Dubai Airports Company chief executive, said: “As the numbers clearly suggest, many major airports around the world are starting to display positive growth following an almost year-long spell of double-digit decrease in traffic. Dubai International Airport was the only airport among the major international hubs recording positive growth throughout this period. As the global economic situation continues to improve further, our performance will only grow stronger.”

The latest report shows the value of traded equities totalled US$728m for the first six months of the year, up from US$479m during the same period last year.

Meanwhile, equities volumes fell by 10 per cent to 1.58 billion shares in the first half of 2010, compared to 1.75 billion during the same period last year.

Traded equities value in June this year also dropped 19 per cent year-on-year to US$61m, compared to US$75m in June last year, and equities volumes last month dropped 35 per cent to 123 million, compared to 189 million in June 2009.

Citigroup was the most active member of the exchange by equities volume in the first six months of 2010, followed by Deutsche Bank and then HSBC. EFG Hermes was the most active regional member during the period, followed by Arqaam Capital and then Shuaa Capital.

Following the completion of the UPC’s Sustainability Policy and Framework Plan for the Capital District project last week, the government department said work will commence on the site “soon” to gather geotechnical and geophysical data, prepare the site for construction and complete technical studies.

The framework plan is scheduled to be completed by February 2011 with an objective of allocating utility corridors for the primary infrastructure networks and sites.

The plan is to be issued to the UPC’s key partners shortly for their review, endorsement and implementation, including Abu Dhabi Water and Electricity Authority, Abu Dhabi Distribution Company, Abu Dhabi Sewerage Services Company and Transco.
HE Falah Al Ahbabi, Abu Dhabi Urban Planning Council general manager, said: “The Capital District is aimed at increasing Abu Dhabi’s global reputation. Its master plan is based on creating a culturally rich, architecturally attractive and sustainable urban environment. The policies and frameworks defined for this ambitious project are asserting core project outcomes and values that are guiding all decision-making. The UPC will continue to work with all infrastructure stakeholders to achieve the Emirate’s sustainable infrastructure development.”