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Saadiyat Island table talk – property and pallets

Russian business people have been outbidding other expats for grand villas

Saadiyat Island Abu Dhabi Alamy/Yuriy Seleznev
Abu Dhabi's Saadiyat Island district is the new 'Billionaire's Row'

At a small dinner party on swanky Saadiyat Island in Abu Dhabi last week, the talk around the table turned to two old favourites: property prices and the neighbours.

My hosts were an entrepreneurial husband-and-wife team who have lived in the area for the past seven years or so, but have moved a couple of times further along the road.

“We’re getting closer to the sea all the time, and now it’s just over there at the end of the road,” the husband said, waving an arm vaguely in the direction of the kitchen.

The reason for the frequent moves was not entirely motivated by a desire for beach proximity, he revealed. Rather, it was “the Russians”.

Apparently, wealthy Russian business people have taken a liking to the rather posh area, and have been outbidding other expats in the rental and purchase of the grand villas that line the street.

You can see what there is to like about the properties. We were eating in a five bedroom detached house with splendid grounds and magnificent views out over the Saadiyat cultural district and its striking architecture. It was typical of the properties along this new Billionaire’s Row.

My host was quick to point out that he had nothing against the new Russian neighbours, and to mention that Belarusian and even Ukrainian residents had moved in too.

But their tastes are not to the liking of the sophisticated Europeans who have previously been the mainstay of the neighbourhood. “All gold and glare. I’ve been inside a couple of their houses, and it’s like a mini version of Versailles.”

Stark contrast, I noted to the traditional but elegant Arabic style of the villa I was having dinner in. Abu Dhabi chic, rather than Moscow glam, I thought.

The other thing my host found disconcerting about the new arrivals was the sheer conspicuous wealth. There were jokes flying around among the older residents that the Russians do not count their riches in thousands, or millions, or even billions. But in pallets.

“Oh yes, he got the place for just under a pallet, you know,” meaning just a smidgen less than a standard wooden pallet size of 1 x 1.2 metres piled high with banknotes.

I’d heard of pallets of dollars being shipped into Baghdad at the start of the American occupation of Iraq in 2003, or even in some cases dropped out of transport planes attached to parachutes, but wasn’t entirely sure those stories weren’t just fictional.

A little hunting on the internet, and indeed it was true. Some $4 billion in US cash (reports of the figure vary between $3 billion and $12 billion) was sent to the Coalition Provisional Authority to distribute to Iraqis just before the US military authorities relinquished formal control of the country in 2004.

One standard sized pallet can hold roughly $100 million of cash in $100 bills. I’ll leave readers to calculate how many pallets were required to transport $4 billion.

Anyway, I digress.

A pleasant evening was had by all, but as I departed the house in an Uber later I kept a careful watch out for pallets outside the mansions I passed, just in case a brick or two had slipped off. But no luck.

A couple of days later, I read in The National that Abu Dhabi’s most expensive home had been sold for AED130 million.

The five-bedroom villa on Saadiyat Island, which “has quickly become one of the most coveted addresses in the UAE,” according to Olga Balashova, senior global property consultant at Dubai Sotheby’s International Realty, was sold to a UAE resident.

The property underwent a “complete renovation” before it was sold to the buyer, with marble craftsmanship and a curated collection of art. The purchase price was about one-third of a pallet in dollars, by my calculations.

Real estate experts said the sale “underscores the growing strength of Abu Dhabi’s prime real estate market”, but there is still some way to go before it reaches the level of Dubai’s Marble Palace in Emirates Hills, on the market earlier this year with a price tag of AED750 million – roughly two pallets.

So the Abu Dhabi ultra prime market looks relatively cheap compared to its more glitzy brother at the other end of the E11 motorway.

Potential buyers should get in quick – and bring their pallets.

Frank Kane is Editor-at-Large of AGBI and an award-winning business journalist. He acts as a consultant to the Ministry of Energy of Saudi Arabia and is a media adviser to First Abu Dhabi Bank of the UAE