Abu Dhabi releases affordable land for education

The Abu Dhabi Department of Education and Knowledge (ADEK) has issued tenders for the leasing of land designated for education use. The aim is to attract operators and investors to construct and operate private schools in the UAE capital.

Two land parcels are located in Khalifa City, one of which is designed for an American curriculum school and the other for a British curriculum school. The third land tendered for education is located in the Maqta area for another British school.

The deadline for RFP submissions is November 23, 2017.

According to research from Colliers, Abu Dhabi still needs around 46,500 additional seats by 2021/2022, which is roughly around six to seven new schools every year with a capacity of 1,500 students.

Colliers International MENA director - education, healthcare and PPP Mansoor Ahmed sees this as a positive step in supporting the development of more mid-market schools. He said: ,"Land cost, through rental or purchase, is one of the factors that have a substantial impact on the cost of building schools. This cost is inevitably reflected in higher tuition fees.Typically, if land is purchased or leased at market prices, it could be in the range of AED30 million to AED50 million for a 20,000sqm plot in case of purchase and between AED1.5 million to AED2.5 million P.A, in case of lease."

According to Colliers, investors and operators can achieve approximately the same returns when investing in a well-managed affordable school as compared to a similar investment in premium school. This can be attributed to several factors such as; reduced capital investment requirement, relatively faster ramp-up period and often higher utilisation rates due to a wider catchment market and an overall higher number of students per class.