The Abu Dhabi real estate sector continues to provide healthy returns for investors with the prices of apartments and villas increasing by more than 8 per cent, according to JLL research.
The wider UAE real estate market defied global headwinds in the third quarter of 2024, maintaining strong momentum and robust activity across all sectors, according to JLL’s latest UAE Market Dynamics report.
High transaction volumes and an upward trajectory underscore the market’s resilience, fuelled by strong economic fundamentals.
Abu Dhabi real estate growth
Abu Dhabi’s residential market saw a 44.3 per cent rise in secondary market sales in Q3, with apartment and villa prices up 8.5 per cent and 8.1 per cent YoY, respectively.
Rents also rose, with apartments up 9.3 per cent and villas up 3.9 per cent. However, off-plan sales declined 67.2 per cent, impacting overall transactions which fell 40.8 per cent YoY.
The flight-to-quality trend is expected to drive demand for prime properties in Q4, outperforming the broader market. Limited new supply entered the market in Q3, but 3,500 units are expected in Q4.
Taimur Khan, Head of Research MEA at JLL, said: “The UAE real estate market demonstrates remarkable resilience, achieving robust growth across all sectors despite a challenging global outlook.
“Investor confidence remains strong in Abu Dhabi, and this upward trajectory is expected to continue, driven by strategic government initiatives and the ongoing development of world-class destinations.
“We are seeing a clear flight-to-quality trend, with prime assets commanding premium prices. In Q4 2024 and beyond, we anticipate sustained growth with opportunities for both local and international stakeholders.”
Abu Dhabi’s hospitality market is enjoying robust performance, driven by surging visitor numbers as the capital’s hotels welcomed 2.4m guests from January to May 2024, especially at key destinations like Yas and Saadiyat Islands.
YTD September saw impressive growth as occupancy was up by 7.1 per cent, ADR rose 12.2 per cent to AED 527, and RevPAR went up 23.6 per cent. Government initiatives, like the Abu Dhabi Tourism Strategy 2030, and upcoming events promise continued growth in Q4.
Continued demand for Prime and Grade A assets in Abu Dhabi’s occupier market drove a 10.8 per cent YoY increase in average rents in Q3 2024. Rental registrations surged 44.4 per cent, fuelled by a 65.9 per cent rise in new registrations and a 7.7 per cent increase in renewals.
Limited vacancy (4.1 per cent) and growing demand from both incumbent and new market entrants are expected to boost growth in Q4 when 70,100 sq. m. of office space is added to the total stock.
Strong demand and limited quality stock defined Abu Dhabi’s retail market in Q3 as F&B remained dominant, with more international brands eyeing the capital’s prime locations.
This landlord-favoured market witnessed 3.8 per cent year-on-year rent increase, with community malls leading the charge at 9 per cent. Rental registrations increased 10.1 per cent YoY, with new registrations up 38.2 per cent. In the next quarter, around 20,100 sq. m. of GLA is expected.
Abu Dhabi’s industrial and logistics market is experiencing robust demand, particularly for high-quality assets in established locations like KEZAD, which boasts 92 per cent occupancy rate.
While rental registrations surged 32.9 per cent in Q3, warehouse rents increased 8.6 per cent YoY to AED 380 per sq. m. new developments are underway to address limited availability.
Government initiatives such as the Abu Dhabi Industrial Strategy are attracting investment and driving further growth, with institutional-grade stock leading the way.
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