By Sam Bridge
Government initiatives are set to stimulate Abu Dhabi's real estate market this year, according to consultancy CBRE
Government initiatives are set to stimulate Abu Dhabi’s real estate market this year, according to a new report by global consultancy CBRE.
The report shows that 28,000 residential units will enter the UAE capital's market between 2020 and 2023, adding to an existing 258,000 units.
It added that changes in the freehold law that have enabled expatriates to own freehold property in over 15 designated investment zones, is expected to have a positive impact on the residential market.
Another initiative which may influence residential purchase decisions in Abu Dhabi in the long run is the launch of the Golden Card system in the UAE, that offers a 10-year permanent residency to investors, entrepreneurs, chief executives, scientists and outstanding students, CBRE said.
Simon Townsend, head of Strategic Advisory at CBRE MENAT, said: “The competitive market conditions have led to an end-user driven market, especially in the capital.
"Given this business appetite, we see potential for developers to devise creative schemes to engage with more investors and buyers. In the office sector, for example, landlords have reduced service charges, and are offering capex contributions and longer rent-free periods, as a strategy to sustain higheroccupancy levels.
"It is extremely promising to see the Government’s ongoing commitment to introducing initiatives that promote economic growth and continued investment in the market, and, we are confident that under this dynamic leadership, Abu Dhabi is well-placed to experience positive trends across key sectors in the future.”
The report said that during the second half of 2019, hotel demand in Abu Dhabi has been positively impacted following major events, such as Special Olympics, AFC Asian Cup, Abu Dhabi Showdown Week, Formula 1 and the Papal Mass, which took place last year.
It noted that Abu Dhabi’s hospitality sector is set to add an extra 9,300 keys within the next three years, adding that growth in hotel occupancy can also be attributed to a number of government measures last year, including a reduction in tourism, municipal and municipality hotel room fees.
Office demand is also expected to be supported by government initiatives to create jobs and increase economic activity, CBRE said. At the end of 2019, existing office supply stood at 4.3 million sq m gross leasable area (GLA) with an expected delivery of an additional 0.6 million sq m GLA by 2023.
Ghadan 21, a three-year economic stimulus package of $13.6 billion will also be in place to create additional jobs, advancing the market performance of office sector, it added.