Abu Dhabi’s real estate landscape showed steady improvement in the third quarter, balancing steady growth with prudent market responses, reflecting emerging trends and enduring values within the sector, a report showed on Thursday.
In Q3 2023, Abu Dhabi’s residential market exhibited moderated capital gains, with the ValuStrat Price Index (VPI) growing by 4.3 per cent annually and 0.8 per cent quarterly, reaching 75.5 points. The apartment sector remained stable compared with the previous quarter, registering a 3.3 per cent annual increase to 72 points. Meanwhile, the villa market outperformed with a 1.3 per cent quarterly and 5.3 per cent yearly increase, achieving 79.2 points.
Declan King MRICS, managing director and group head of real estate, said: “Abu Dhabi’s real estate sector is navigating through an era of strategic growth and maturity. With residential capital gains exhibiting a nuanced upward trajectory, it is evident that the market is maintaining sustainable increases, balancing the scales between supply and demand. Great to see some upticks in commercial asset classes too, a reflection of solid economic fundamentals and business activity.”
The VPI for annual rental values in Abu Dhabi expanded 7 per cent annually and 1.2 per cent quarterly to reach 80.6 points. Villa rental values stood at 92 points, with a notable 9.6 per cent annual and 2.8 per cent quarterly increase. Apartments saw a 4.7 per cent annual rise, registering 71.9 points.
The city’s office stock stood at 3.9 million sq m (42 million sq ft) gross leaseable area (GLA) in Q3, with median office sales prices growing by 2 per cent quarterly to reach Dh9,390 per sq m (Dh872 per sq ft). However, office asking rents in primary commercial districts declined 5.1 per cent quarterly and 4.2 per cent annually.
In the hospitality sector, with the current 34,000 hotel keys, the occupancy rate for the period of January to August was 73 per cent, up 2 per cent from last year, while the Average Room Rate (ARR) and the Revenue Per Available Room (RevPAR) increased by 22 per cent and 24 per cent annually, respectively.
The top visitor nationalities in the emirate during Q3 were from the UAE (22 per cent), India (11 per cent), the UK, Egypt, and the Philippines (4 per cent each). Warehouse prices remained stable at the lower end of the price range.
Haider Tuaima, director and head of real estate research, said: “While the secondary market in Abu Dhabi has been growing at sustainable levels, mainly driven by domestic buyers, the primary off-plan market, on the other hand, is likely drawing increasing attention from international investors, as transactions volumes jumped 99.2 per cent when compared to last year, not only that, 75.1 per cent of all home sales derived from off-plan properties.”
Associate Director of Commercial Valuations at ValuStrat, Sean Swinburne, remarked, "Data points from the commercial sector are currently showing a mixed trend, but our further qualitative analysis deducts continued rising demand. We have observed healthy growth in median office sales prices, whilst there has been a decline in office asking rents in primary commercial districts by 5.1% quarterly and 4.2% annually. This could reflect the less desirable nature of remaining stock rather than a turn in trend as the supply of quality office space continues to lag behind demand. The hospitality sector is on an upward trajectory, with ADRs and RevPARs increasing significantly by 22% and 24% YoY, respectively, affirming Abu Dhabi's rising appeal as a global tourism and business hub."
For a detailed perspective on the property market, visit: Dubai - Real Estate Review Q3 2023