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Arabian Business
16-06-2025
- Business
- Arabian Business
Abu Dhabi is driving ‘significant opportunity' amid UAE real estate surge, experts say
While the UAE's real estate spotlight has long been focused on Dubai, Abu Dhabi has been crafting a quieter, yet no less powerful, growth story. In a series of exclusive interviews, leading real estate experts revealed how the capital's property market is becoming a magnet for both domestic and international investors—driven by smart planning, long-term vision, and a wave of infrastructure and lifestyle upgrades. 'Abu Dhabi has surpassed Oslo to become the city with the highest concentration of sovereign wealth,' Ali Ishaq, Head of Residential Agency in Abu Dhabi told Arabian Business. Abu Dhabi's Reem and Yas Islands 'standout performers' 'This is driving significant opportunity both for individuals and corporate entities and in turn driving growth in Abu Dhabi's real estate market,' he added. That capital strength is being translated into large-scale urban development. New plans featuring integrated, community-driven environments are emerging, offering a variety of product types not previously available in the emirate. Infrastructure enhancements — including new bridges and tunnels connecting key districts and islands — are also making the city more liveable and better connected. Rental yields across the capital remain robust. According to Haider Tuaima, Managing Director and Head of Real Estate Research, 'gross rental yields averaged 7.8 per cent, with apartments in Al Muneera offering the highest yields at 8.8 per cent and villas in Hydra Village showing the strongest yield growth at 7.6 per cent.' Residential occupancy stood at 88.1 per cent in Q1, he added, noting that supply remains constrained. 'Only 279 units were delivered in the first quarter—just 2 per cent of the nearly 14,000 expected for the full year.' Ishaq confirmed that Reem Island and Yas Island are standout performers, 'Reem Island and Yas Island are delivering the highest rental yields, owing to attractive pricing and location.' Both apartments and villas are seeing increased demand, with the latter particularly appealing to families establishing longer-term bases. Abu Dhabi witnesses diverse and growing investor base Abu Dhabi is now attracting a broader, more diversified investor demographic. 'We're seeing both short- and long-term investors entering the market,' Ishaq said. 'Abu Dhabi's appeal lies in its position as the capital of the UAE, a hub for talent, and a city committed to innovation and digital transformation.' Tuaima further pointed to mortgage trends as further evidence of end-user activity. 'In Q1, two-thirds of transactions were mortgage-backed, with just one-third completed in cash — the inverse of what we typically see in Dubai,' he said. 'Abu Dhabi's strong appeal to investors stems from its strategic location, thriving economy, and government support for growth and innovation,' Ishaq added. 'The city's world-class infrastructure, connectivity, and ease of business further enhance its attractiveness to investors.' Aside from this, sustainability has moved from a trend to a priority in Abu Dhabi's real estate landscape. 'Residential occupiers and younger generations are increasingly mindful of wellness, sustainability and, as a result, are seeking developments that offer more than just housing,' Ishaq said. 'In the commercial market, occupiers are also conscious of how their operations impact the environment, with global occupiers leveraging real estate to off-set operational impacts,' he added. This trend is complemented by the city's growing lifestyle offerings and family-orientated ecosystem. Upcoming international schools to boost investor interest in Abu Dhabi New school openings, including Gordonstoun, Harrow, and King's College School Wimbledon, have added to the city's appeal for long-term residents. While comparisons with Dubai are inevitable, Abu Dhabi's momentum is based on its own fundamentals. 'The significant price rises in Dubai post-pandemic make Abu Dhabi a much more affordable option in the UAE,' Ishaq noted. However, affordability isn't the only driver. 'Recent announcements around Disney, a growing entertainment calendar, the concentration of sovereign wealth, and world-renowned school openings are all contributing to the liveability of the city.' The ValuStrat Price Index for Abu Dhabi rose 7.2 per cent year-on-year in Q1 2025, with villa prices up 9.7 per cent and apartment prices up 4.5 per cent. According to Tuaima, 'Abu Dhabi's capital values continue to show healthy single-digit growth, supported by constrained supply and steady demand, with prices expected to rise up to 7 per cent by the end of 2025.' Off-plan prices averaged AED17,061 per sq m — significantly higher than ready property prices — although transaction volumes were down due to fewer new launches. 'Off-plan transactions fell sharply, down 57.7 per cent quarter-on-quarter and 79.2 per cent year-on-year,' Tuaima said. 'Ready home sales declined 33.6 per cent quarter-on-quarter but increased 13.6 per cent year-on-year.' Echoing the sentiment, Declan King, Senior Partner and Group Head of Real Estate said: 'Great to see the real estate sector in the capital reporting consecutive periods of quarterly growth in sales values of late. It will be interesting to observe if the recent announcement of Disney on Yas Island will act as a further catalyst for the local property market.' Abu Dhabi is no longer just an alternative, it's becoming a primary destination. Backed by sovereign investment, a transparent regulatory framework, and a future-focused approach to urban living, the capital is steadily winning over investors across the spectrum, and with market fundamentals on its side, the emirate's quiet surge is getting harder to ignore.
Khaleej Times
16-06-2025
- Business
- Khaleej Times
Living in Dubai? New report reveals how far property prices will rise in 2025
Dubai property prices increased 8 per cent in the first five months of this year, said Haider Tuaima, managing director and head of real estate research at ValuStrat. However, prices will see a moderation in growth rather than a decrease in value over the coming months in 2025. The property prices in the emirate saw a 1.6 per cent monthly increase and a 24.7 per cent rise since May last year, led by villas, said the real estate consultancy in its monthly analysis of the emirate's property market. The monthly report showed that villa capital values grew 2 per cent month-on-month, with an annual increase of 29.3 per cent. The highest growth in the villa segment was led by Jumeirah Islands (41.5 per cent), followed by Palm Jumeirah (40.9 per cent), Emirates Hills (28.6 per cent), and The Meadows (28.3 per cent). Meanwhile, the lowest gains were recorded in Mudon (8.5 per cent), which has remained relatively stable for the ninth consecutive month. Stay up to date with the latest news. Follow KT on WhatsApp Channels. It added that Dubai's freehold villas are, on average, valued 66.4 per cent above the previous market peak in 2014 and 175.1 per cent higher than post-pandemic levels. Apartment prices rose by 1.1 per cent month-on-month, recording an annual growth of 20%. The highest yearly capital gains were seen in The Greens (25.5 per cent), Dubailand Residence Complex (24.1 per cent), Palm Jumeirah (23.8 per cent), Dubai Silicon Oasis (23.7 per cent), and Town Square (23 per cent). In contrast, the lowest capital value increases were recorded in International City (12.3 per cent) and the Burj Khalifa (16.4 per cent), which has recently surpassed its previous price peaks of 2014. Apartment valuations are, on average, 71.2 per cent above post-pandemic levels, but 5.8 per cent below the previous market peak during 2014, said ValuStrat analysts in the monthly report. As for the remainder of the year, the company predicted that property prices in Dubai are likely to increase by up to another 10 per cent. Meanwhile, real estate consultancy JLL said the residential market is expected to adjust as supply and demand approach equilibrium. 'This shift will likely signal a moderation in price growth rates rather than a decrease in property values. As the year progresses, this trend is anticipated to increasingly influence sales prices, potentially leading to a more sustainable growth pattern in the market,' it said. In the first quarter of 2025, JLL said, sales prices continued to climb on the back of strong residential demand, resulting in a 16.5 per cent annual increase in overall prices. Villas led the market, transacting at an average of Dh2,113 per square foot, an 18.9 per cent year-on-year increase. Apartment sales prices also gained momentum, reaching Dh1,725 per sqft, up 16.1 per cent annually.
The National
04-06-2025
- Business
- The National
Dubai real estate: Are we heading into market correction?
In the UAE, where development is the name of the game, real estate is a big deal. There's a lot of growth in the UAE, and that means questions about property. The real estate sector in Dubai has been booming since Covid, while there is also rapid development in Abu Dhabi. A report from the credit rating agency Fitch says Dubai property prices are expected to fall by up to 15 per cent in the second half of 2025 and into next year. But some experts say that might not be the case. So how do these new changes in developments factor into the real estate market? We hear from Haider Tuaima, managing director and head of real estate research at ValuStrat, Cherif Sleiman, Chief Revenue Officer at Property Finder, and our own Senior Business Reporter Fareed Rahman.
The National
04-06-2025
- Business
- The National
Dubai real estate: Rut or redemption?
In the UAE, where development is the name of the game, real estate is a big deal. There's a lot of growth in the UAE, and that means questions about property. Real estate in Dubai specifically has been on up since Covid. There is rapid development in Abu Dhabi. A report from the credit rating agency Fitch says Dubai property prices are expected to fall by up to 15 per cent in the second half of 2025 and into next year. But some experts say that might not be the case. So how do these new changes in developments factor into the real estate market? We speak to Haider Tuaima, managing director and head of real estate research at ValuStrat, and our own Senior Business Reporter Fareed Rahman.
Arabian Business
23-05-2025
- Business
- Arabian Business
Abu Dhabi property prices rise 7.2% annually in Q1 2025 despite sales volume drop: Report
Abu Dhabi's property market delivered its strongest capital gains in three years during the first quarter of 2025, even as sales volumes declined due to limited supply, according to the latest ValuStrat report. The ValuStrat Price Index (VPI) for residential properties rose 2.1 per cent quarterly and 7.2 per cent annually to reach 125.6 points, based on a Q1 2021 baseline of 100. Villa prices outperformed apartments, climbing 2.7 per cent quarterly and 9.7 per cent annually to 134.7 points, while apartment prices increased 1.5 per cent quarterly and 4.5 per cent annually to 116.9 points. 'Abu Dhabi records strongest capital gains in three years, whilst sales volumes slow due to constrained supply,' said Haider Tuaima, Managing Director at ValuStrat. The weighted average home value in Abu Dhabi stood at AED 10,226 per square metre (AED 950 per square foot), with apartments averaging AED 10,979 per square metre and villas at AED 8,407 per square metre. Saadiyat Island led annual capital gains for villas, recording a 21.2 per cent increase, followed by Al Raha at 8.2 per cent and Mohammed Bin Zayed City at 4.7 per cent. Among apartments, Al Reef saw the highest annual gains at 7.5 per cent, followed by Saadiyat Island at 6.2 per cent and Al Muneera Island at 5.7 per cent. Rental values rise sharply Rental values also increased, with the residential rental VPI rising 2.2 per cent quarterly and 9 per cent annually to 121 points. Apartment rents outpaced villas, growing 3.4 per cent quarterly and 11.6 per cent annually, while villa rents rose 6.3 per cent annually but remained flat quarterly. Average annual apartment asking rents stood at AED 114,000, with studios at AED 63,000, one-bedroom units at AED 89,000, two-bedroom apartments at AED 125,000, and three-bedroom units at AED 180,000. Villa rents averaged AED 245,000 annually, with three-bedroom properties at AED 180,000, four-bedroom homes at AED 244,000, and five-bedroom villas at AED 312,000. Gross yields averaged 7.8 per cent, with apartments delivering 8.3 per cent and villas 6.7 per cent. The estimated average residential occupancy rate reached 88.1 per cent. Abu Dhabi's residential market update Abu Dhabi completed just 90 apartments and 189 villas during the first quarter, representing 2 per cent of the expected 2025 residential pipeline of 13,941 units. . Bloom Holding launched Carmona in Zayed City, while 18 and 19 in Masdar City with 483 units. Taraf, collaborating with Marriott International, launched W Residences Abu Dhabi on Al Maryah Island, a 37-storey development. Abu Dhabi off-plan sales plummet 79% annually Sales activity presented contrasting trends. Total sales volume reached 1,301 transactions, down 42.9 per cent quarterly. The average sales ticket size increased 8.8 per cent quarterly to AED 2.88 million. Off-plan sales, representing 28.5 per cent of overall sales, fell 57.7 per cent quarterly and 79.2 per cent annually to 371 transactions, attributed to fewer project launches. However, the average off-plan price stood at AED 1,585 per square foot, decreasing 8.8 per cent quarterly but growing 8.7 per cent annually. The average off-plan ticket size reached AED 3.56 million, up 19.2 per cent annually. Ready property transactions totalled 930 units, down 33.6 per cent quarterly but up 13.6 per cent annually. Average ready home prices reached AED 1,146 per square foot, increasing 5.8 per cent annually and 7.9 per cent quarterly. The average ready home ticket size hit AED 2.6 million, up 28.9 per cent quarterly and 23.8 per cent annually. Mortgage transactions dominated the market with 2,846 deals worth AED 9 billion, compared to 1,375 cash transactions valued at AED 5 billion. Abu Dhabi office rents jump 31.8% annually 'The office market showed strong performance, with rising prices and rents amid high occupancy levels, particularly in central business districts. Retail remained resilient, supported by robust foot traffic and tenant sales. Meanwhile, the hospitality sector saw exceptional results, with occupancy and revenue metrics showing significant YoY growth, backed by strong tourism activity,' Tuaima added. The office market showed strong performance, with asking rents growing 8 per cent quarterly and 31.8 per cent annually to AED 811 per square metre annually. Median asking prices increased 6 per cent to AED 2.25 million. Average occupancy in central business districts reached 90.5 per cent. Office stock totalled 3.9 million square metres of gross leasable area. Aldar Properties expects to complete the HB Office Tower on Yas Island by year-end, while Masdar City Square will add 50,000 square metres during the second quarter. Shopping centre stock stood at 1.95 million square metres of gross leasable area. The occupancy rate for Aldar's retail assets reached 90 per cent during 2024. Yas Mall recorded 97 per cent occupancy with a 10 per cent increase in tenant sales and 18 per cent rise in footfall. My City Centre Masdar achieved 81 per cent occupancy. The hospitality sector delivered exceptional results. Hotel occupancy reached 86.9 per cent during the first two months of 2025, up 1.2 per cent from the same period in 2024. The Average Room Rate stood at AED 683, up 37.1 per cent annually, while Revenue Per Available Room reached AED 594, increasing 38.7 per cent annually. Abu Dhabi welcomed 5.2 million guests in 2024, a 28.7 per cent increase. The emirate had 34,372 hotel keys as of February 2025, with supply expected to surpass 50,000 by 2030. Mondrian Hotels will debut its first UAE property in Downtown Abu Dhabi, while Hilton and Aldar will open Abu Dhabi's first Waldorf Astoria at the former Anantara Eastern Mangroves site. Industrial property asking prices rose 14.8 per cent annually and 1.5 per cent quarterly. Warehouse prices ranged from AED 152 to AED 430 per square foot, with modern cold storage facilities commanding premium rates. Annual rental rates increased 12.3 per cent at the lower end and 17.9 per cent at the higher end, ranging from AED 25 to AED 54 per square foot. AD Ports Group inaugurated the Al Faya Dry Port between Abu Dhabi and Dubai. Bisconni Middle East Manufacturing signed a 50-year lease with KEZAD Group for a 37,000 square metre facility, investing AED 110 million. AquaChemie opened a 25,804 square metre manufacturing facility in KEZAD. The UAE economy is projected to grow 5 per cent to 6 per cent in 2025, supported by technology, renewable energy, trade, financial services, and infrastructure sectors. Abu Dhabi's economy grew 3.8 per cent in 2024, driven by the non-oil sector, with manufacturing contributing 9.5 per cent to GDP and construction recording 11.3 per cent. The Abu Dhabi Consumer Price Index for February 2025 stood at 106.4 points, stable annually. Housing and utilities increased 2 per cent annually to 101.9 points, the highest in two years. The US Federal Reserve maintained interest rates at 4.25 per cent to 4.5 per cent as of March 2025. Abu Dhabi's Murban crude oil price stood at AED 277.1 ($75.5) per barrel as of March 2025. The UAE's foreign trade reached AED 3 trillion for the first time by the end of 2024, growing 14.6 per cent.
