(Bloomberg) -- Shares of the largest property developers in Dubai and Abu Dhabi climbed after they joined forces to pursue local and international real estate projects worth 30 billion dirhams ($8.2 billion).
Emaar Properties PJSC, the developer of the world’s tallest tower, rose 1.7 percent, while Abu Dhabi’s Aldar Properties PJSC advanced as much as 6.5 percent. The companies signed a partnership agreement that will start with developments on Al Saadiyat Island in Abu Dhabi and Emaar Beachfront in Dubai.
“The key around this move is to give both companies access to both cities,” said Marwan Haddad, a fund manager at Al Mal Capital. It would allow the developers to deploy their "very strong balance sheets" outside their traditional areas of operation as the property market faces a slowdown in the United Arab Emirates, he said.
Developers in the U.A.E. are grappling with a tough local market as demand for property declines, pushing down values and rents. Dubai has seen predictions of a rebound miss the mark again and again over the last two years. Abu Dhabi’s real estate market hasn’t fared any better.
While new, the partnership isn’t the first instance of cooperation between developers in Dubai and its larger and richer neighbor Abu Dhabi. Emaar Chairman Mohamed Alabbar is leading Abu Dhabi-backed Eagle Hills, which is developing projects in countries such as Serbia, Bahrain and Nigeria.
The development Al Saadiyat Island, called Saadiyat Grove, will provide a link between the Louvre Abu Dhabi museum as well as the planned Zayed National Museum and the Guggenheim Abu Dhabi, according to a statement from Dubai’s Media Office. The Emaar Beachfront project in Dubai will comprise about 7,000 residential units and have access to a 1.5 kilometer private sandy beach.
The partnership acts as a catalyst for other potential co-investment opportunities between the two developers, according to the statement. The start of common projects between Dubai and Abu Dhabi “will help strengthen our economy globally,” Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum said.
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