Southeast Asia’s largest developer, CapitaLand has formed a joint venture with Abu Dhabi’s government’s investment arm to build the first phase of a US$5 billion project in the United Arab Emirates (UAE).

The first phase of the 1.4-million sq-metre development will feature 900 residential units that will cost approximately S$500 million to construct, said Singapore’s CapitaLand and its partner Mubadala Development Co.

The companies also said they would invest US$300 million in equity in the development that will include apartments, shops and sports facilities.

CapitaLand will hold a 49% stake in the joint venture with the remaining controlled by Mubadala.

“Abu Dhabi is very attractive for us. Until 2010, there will be a deficit of more than 10,000 residential units each year,” said CapitaLand chief executive Liew Mun Leong.