A new report by Morgan Stanley has predicted that property prices in Abu Dhabi are set to continue rising until at least 2012, by which point supply is expected to catch up with demand. This is fuelled by a shortage of properties, caused in part by the lingering effects the building moratorium of the 1990s, meaning that some workers are forced to commute from Al Ain or Dubai.

The Morgan Stanley report also finds that rental increases across all sectors are likely to continue for a minimum period of two to three years.

The Abu Dhabi government has already launched intensive investment programmes to boost the supply of property.

Mubadala, Abu_Dhabi's increasingly active state investment vehicle, is expected to announce new deals in the next four to six weeks as it seeks to take advantage of continuing financial turmoil in global markets, including opportunities in the depressed US property market.

Waleed Ahmed al-Mork-arrab al-Muhairi, Mubadala's chief operating officer, told the Financial Times that the company was looking at heavy industrial type deals, as well as property.

"This is a defining mom-ent. Debt markets are a little thin, capital markets are -volatile and so there is opportunity. We are spending a lot of time making sure we deploy wisely and that we build the right businesses and partner with the right businesses," Mr Muhairi said.

Abu Dhabi: Soaring oil prices and the government's economic diversification raised Abu Dhabi's gross domestic product (GDP) 21.8 per cent last year to more than Dh400 billion, up from Dh341 billion in 2006, the Department of Planning and Economy (DPE) said yesterday. "In absolute terms the relative weight of oil revenues has grown to more than 90 per cent of the total, but that simply is owing to the increasing prices. Nevertheless, the real weight of other sectors has been growing consistently," Butti Ahmad Al Qubaisi, executive director for planning and statistics at the department, said. Abu Dhabi is striving to increase the property share of the non-oil sector of GDP to 60 per cent by 2030. It stands at 39.73 per cent or Dh158.94 billion now.