ABU DHABI-The Related Cos., based in New York City, and Gulf Capital have formed a joint venture to seek out retail and residential projects around the globe. The first project is a doozy, the more than $200 million investment to create the Galleria at Sowwah Square, the retail component of the $2.5 billion Sowwah Island project here.
Mubadala Development Co, owned by the local government, is building the five-million-square-foot Sowwah Island project. Four office towers of about two million square feet are just being finished at the site, surrounding the new headquarters of the Abu Dhabi Securities Exchange. The 2,000-acre project will also feature a large residential component (about half the property), two hotels, a health care component and the 355,000-square-foot Galleria.
Kenneth Himmel, president and CEO of Related, tells GlobeSt.com that it took about 18 months to join in this venture for this project, and to gain financing to create this retail center. There’s tremendous interest in the retail component, he says. “This area is tremendously underserved with retail. At this moment about 100% of the Galleria space is being spoken for through negotiations. We’re about 90 days away from making announcements of tenants,” he says.
While Abu Dhabi has been one of the strongest areas of growth in the global economy, Himmel admits that the Middle East is now facing some shaky ground. However, Abu Dhabi is pretty insulated from economic or political strife, he says.
“You look at Dubai, it’s almost a train wreck, they’ve built way too much speculative supply. It’s true that there has been oversupply here as well, but they have a master plan to 2030, and the burn-off rate should be only one-to-two years, not 10 years like in Dubai,” Himmel says. “There’s also going to be some pause, some hesitation to do with the current demonstrations in Middle East countries such as Bahrain. However, I think Abu Dhabi will be seen as a safe haven for investors looking to get to these countries.”
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