Abu Dhabi-based Waha Capital's property arm may begin work on the second phase of a Dh12 billion ($3.3 billion) mixed use development project earlier than planned.

The move follows increased demand for affordable housing and industrial units, an executive said on Monday.

Developer Waha Land launched its Almarkaz project in Abu Dhabi city in April last year. "The start of phase two will overlap before phase one is completed. We are expecting phase one by the end of 2011," Hazem Al-Nowais, chief operating officer of Waha Land said at the Reuters Global Real Estate and Infrastructure Summit in Dubai.

"We are looking to start the handover of units from the first phase in the first quarter of 2011," he said adding that some of these would be affordable housing.   

Currently the developer is finalising tenders for the infrastructure, affordable housing and industrial components of the project and expects to announce them in the next month, he added.

Nowais said Waha Land is considering other projects in the emirate focusing on industrial real estate, affordable housing and social infrastructure projects but would concentrate for now on Almarkaz.

"This is a big project. It was brought to the market by a private developer and we are concentrating on Almarkaz. Almarkaz is our biggest worry -- getting it delivered on time and right," he said, adding the project completion timeline would be around six years.

Developers in Abu Dhabi have been shifting their strategies to focus more on housing projects for UAE nationals. In April Sorouh Real Estate, the emirate's second largest developer, signed a contract to develop two communities for UAE families in a deal financed by Abu Dhabi's Urban Planning Council.

Property consultancy Colliers estimates a possible undersupply of 42,000 homes in Abu Dhabi by 2013. - Reuters