The Abu Dhabi developer Bloom Holding does not expect the capital’s luxury housing sector to start picking up until the end of next year.
Sameh Muhtadi, the chief executive of Bloom, the private developer currently responsible for a clutch of ambitious projects in Abu Dhabi and Dubai, thinks that the impact from low oil prices and economic reforms will continue to push down rents and prices until the end of 2018.
“Demand is still evident in the middle income sector,” said Mr Muhtadi, who has been at the helm of Bloom Holding for more than two years. “Luxury offerings are expected to pick up in late 2018.”
To that effect Bloom has shifted its development focus over the past year away from Abu Dhabi mega villas.
Instead the developer is working on middle income housing projects such as Bloom Towers and Bloom Heights in Dubai’s Jumeirah Village Circle and staff accommodation blocks in Dubai.
The developer is also working on new mixed use projects as far afield as Romania, Algeria and Minnesota, US.
Bloom reports a fall of between 3 per cent and 4 per cent in the volume of new leases it has signed with tenants over the past year in the UAE. However, Mr Muhtadi says that its change of tack has paid off in terms of sales.
“We continue with robust sales across the board, our diversification in sectors and in regions certainly helps,” he said. “In that we have positioned for mid-market we honestly have not seen a negative market impact.”
Mr Muhtadi’s 30-year career has spanned stints at companies including Arabtec, Emaar Properties Misr and Orascom Contrack.
Other projects currently on the cards include two high-end apartment developments on Saadiyat Island, a hotel on Reem Island, both in Abu Dhabi, an apartment block in Dubai Marina and plans to develop a vast swath of Abu Dhabi’s long-awaited Capital District.
And, as one of the UAE’s best known owners and developers of schools, Bloom is also pressing ahead with an ambitious development programme in the education sector.
And, for those with strong stomachs, Mr Muhtadi says that Abu Dhabi’s current housing slump is creating opportunities for investors.
“Now is the best time to invest,” he said. “Payment terms are attractive, and the pipeline of supply continues to be balanced with demand.”