The office tower will have a total net area to lease of 63,000 square metres. It will offer a mix of micro-office, multi-tenanted, and single-tenanted floors.
The addition of the new tower will bring Aldar Investment’s total net leasable area of commercial office space to more than 400,000 sq m.
The two companies agreed the “heads of terms” that aim to develop commercial assets on the island, driving growth in Abu Dhabi’s real estate market and boosting the office offering on Al Maryah Island.
This builds on an existing partnership between the two entities. It follows Aldar’s acquisition of four commercial towers at ADGM from Mubadala and a subsequent deal between the two parties to partner in the acquisition of Al Maryah Tower, both of which were completed in 2022.
Aldar, the developer behind Abu Dhabi’s Formula One circuit and other big developments in the emirate, is looking to expand both its footprint and portfolio of assets. The property market in the UAE bounced back strongly from the pandemic-driven slowdown in 2021 and the trend has continued since then as the Arab world’s second-largest economy remains on a solid growth trajectory.
Demand for office real estate across Abu Dhabi remained “buoyant” throughout 2022, according to a March report by UK-based real estate consultancy Savills.
As a result of steady demand levels and limited new supply entering the market, rental values across most Grade A assets increased compared to 2021, it said.
On average, rent increased by 7 per cent across the key office districts of Abu Dhabi, with the ADGM building recording the highest increase in rental values compared to other Grade A developments, according to Savills.
Leasing activity during the year was driven by new entrants in the financial services sector into ADGM, the consultancy said.
Government and semi-government entities and companies in the oil and gas sector were among key occupiers of office space across the city.
The office market is poised to benefit over the next few years from Abu Dhabi’s Dh5 billion ($1.4bn) IPO Fund that was launched to help private companies to list on the local stock exchange, as the emirate plans to double its market capitalisation, Savills said.
The UAE’s office market segment registered a marked increase in demand in 2022, with rental performance in Abu Dhabi’s occupier market “substantially improved”, according to a January report by property consultancy CBRE. Average prime, Grade A and Grade B rents grew 11.8 per cent, 8.8 per cent and 13.2 per cent respectively last year, it said.
Under the new project by Aldar and Mubadala, the initial office tower’s construction is expected to be completed by the end of 2026, according to the statement.
The property will be managed by Aldar Investment, which currently has more than Dh32 billion ($8.71 billion) of assets under management.
“Through a phased approach, the joint venture will continue to increase the supply of prime office space on the island to ensure the ADGM freezone grows from strength to strength as a financial centre of global significance,” said Jassem Saleh Busaibe, chief executive of Aldar Investment.
“The first project enables us to take the necessary steps to satisfy the current pent-up demand, with plans for more to come.”