(Bloomberg) -- Abu Dhabi’s biggest property developer plans to invest $490 million in neighboring Dubai, expanding its footprint in one of the hottest commercial real estate markets globally.
Aldar Properties PJSC is planning to build a skyscraper that’ll include offices, a luxury hotel and branded residences on a plot of land near Dubai’s financial center, the company said in an e-mailed statement on Wednesday. It’ll also buy a fully occupied office building in the other end of the city.
The new tower will be among Dubai’s largest with 88,000 square meters (947,224 square feet) of net leasable area. ICD Brookfield Place, which was recently bought by an Abu Dhabi investment firm and a Saudi conglomerate, is Dubai’s largest commercial tower with 102,193 square meters.
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Aldar’s first commercial project in Dubai, which will include Grade A office space near the city’s arterial Sheikh Zayed Road, will be completed by the fourth quarter of 2027, the company said. The announcement comes months after buyers snapped up homes worth $844 million within hours at a housing community that it jointly developed in the city.
Dubai’s property market rebounded from a seven-year slump fueled by an influx of high net worth individuals, hedge funds executives, crypto investors and wealthy Russians seeking to shield assets. Government reforms — including relaxed visa rules — also helped drive demand.
Now, city-wide office occupancy rates have hit 91.3%, according to CBRE Group Inc., at a time when vacancy rates are at multi-year highs in business hubs like London and New York.
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The Abu Dhabi developer has also agreed to buy the newly built ‘6 Falak’ tower in Dubai Internet City from Sweid & Sweid. The building with 9,100 square meters of net leasable area has several marquee tenants including pharmaceutical firm Merck and consulting firm Roland Berger, the company said.
“Dubai is a priority growth market for Aldar and we will continue to increase our presence across key real estate asset classes,” Chief Executive Officer Talal Al Dhiyebi said.
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