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Abu Dhabi is the largest of the seven emirates that comprise the United Arab Emirates (UAE), and its principal city, also called Abu Dhabi, is capital of the country. Six emirates - Abu Dhabi, Ajman, Dubai, Fujairah, Sharjah and Umm Al Quwain - banded together following British withdrawal from the region in 1971, with Ras Al Khaimah joining in 1972. Oil was first discovered in Abu Dhabi in 1958 and in the five decades since then, revenues from oil and gas have transformed the emirate into one of the world's richest locations. Indeed the UAE sits upon 9% of the world's proven oil reserves and 5% of the planet's natural gas reserves, with Abu Dhabi enjoying the lion's share of this - 95% of oil and 92% of gas. Abu Dhabi is the largest of the seven emirates, with 2005 census figures putting the population at almost 1.3m out of a total UAE population of around 3.8m.
BankingThere is much optimism surrounding the approximately 50 financial institutions in the UAE. Abu Dhabi is very much part of this positive trend, with demand set to continue in the retail and corporate segments, benefiting from the industrial, tourism and residential construction projects springing up throughout the emirate. This means that, while Dubai has for some time held the edge over Abu Dhabi as the prime financial hub of the UAE, Abu Dhabi could gain ground as a number of foreign banks, including Standard Chartered, increase their presence. New branch and ATM openings will enliven the sector, while many UAE banks are looking towards overseas expansion. For example, National Bank of Abu Dhabi, the largest in the region in terms of assets, loans and deposits, has opened a new office in Kuwait with another planned in Qatar. To the future, core earnings around the 20% mark are predicted during 2007-08, but in the longer term banks must diversify the range of products on offer to maintain these rates. In terms of human resources and IT heavier outlays will be necessary in the sector, but raised costs are a fact of life if UAE banks are to compete with global players. A more stringent regulatory environment with the introduction of Basel II is also on the horizon.
Real EstateGood times ahead are predicted for Abu Dhabi's real estate sector, with the relaxation of foreign ownership laws encouraging more investment; the expected doubling of the population over the next decade; and the possibility of a planned single currency being based in the emirate. Meanwhile UAE banks are offering customers a varied selection of mortgage and loan portfolios. Among the most ambitious real estate developments are Al Raha, a beachfront project which will include the construction of a whole new city; Reem Island, Sorouh Real Estate's section of which will include the city's tallest tower; and Al Qudra Real Estate's 21,000-sq-metre Danet Abu Dhabi, which will include 34 high-rise towers. In among the glitz and glamour, however, low cost housing is not being forgotten. Manazel, a developer that is run on Islamic principles, has projects in the pipeline targeting the middle-income section of the population. Abu Dhabi is fortunate in that it can learn from the successes and mistakes of Dubai's far more mature real estate sector - being wise, for example, of the need to regulate against property speculation. Complementing all this activity at home, Abu Dhabi companies are looking overseas for opportunities. Take as an example Abu Dhabi Investment House's $160m investment in the Beirut Gate project and Manazel's claim that it is pursuing $5.4bn worth of investment opportunities in Qatar, Saudi Arabia, Egypt, Morocco and Europe in 2007-08. To ensure successes like these for years to come, Abu Dhabi has set up a non-profit centre focusing on education and research facilities for real estate professionals.
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