The first of its kind residential rental index launched by the Abu Dhabi Real Estate Centre (ADREC), the custodian and regulator of the real estate sector in the emirate, is expected to increase transparency and attract foreign and domestic investments, according to experts.
The index provides information on indicative rents for residential properties in areas of Abu Dhabi emirate.
“It offers easily accessible and reliable data on residential properties to help investors and residents understand the rental market and make informed decisions,” a statement from ADREC said.
The information on rental rates before the rental index was based on hearsay and exaggerations from the real estate brokers.
“The Abu Dhabi Residential Rental Index enhances market transparency by providing indicative average rental rates based on official transactions,” said Haider Tuaima, Director and Head of Real Estate Research at ValuStrat.
As of now rental index only provides information and does not have caps, Tuaima said. But the information is useful for landlords and tenants.
“The platform is beneficial for both landlords and tenants, offering insight into rental rates across different city zones and sectors.”
Buyers of properties look for a reasonable return for investments.
The sketchy and unauthoritative information on rental yields can be a big handicap while making decisions on investments.
“The index supports foreign investment by enabling potential landlords to calculate their rental yields more accurately,” Tuaima said.
The rental index also brings in the idea of competitive pricing, giving greater play to market forces in determining the flow of investments.
“The Rental Index will energise the rental market in Abu Dhabi and further contribute to the emirate’s competitive edge to attract international investors,” said Rashed Al Omaira, Acting Director-General of ADREC at the time of the launch of the index.
Index will help Abu Dhabi properties to compete with realty assets of the neighbouring emirate where a more robust real estate regulatory framework is in operation.
“We are committed to building a thriving real estate sector, positioning the emirate as a leading investment and real estate destination regionally and globally,” Al Omaira added.
The rental index on ADREC website is embedded in a map of Abu Dhabi where different areas are marked.
By clicking on the area, one can get to know the indicative rents in the area.
In Al Khalidiyah area near Khalidiyah Mall, indicative annual rents for 1-, 2- and 3-bedroom apartments stand at Dh41,550, Dh51,935 and Dh80,058, respectively.
In villa segment in the same area, 3-, 4- and 5-bedroom units will cost you Dh92,403, Dh161,803 and Dh169,802, respectively.
In Al Saadiyat Island, 1-, 2-, 3-bedroom apartments in area termed as SDN2 will cost you Dh71,434, Dh119,752 and Dh151,836, respectively.
A four-bed villa will cost you rent of Dh304,734.
A quick perusal of areas like Saadiyat Island and Mohammed bin Zayed City on rent index map will let you know that rents are much higher than the rents on the main island of Abu Dhabi.
Easy navigation on the map will help the potential tenants to choose an area that suits their pocket and needs.
“The rental index can be used as guideline by tenants and landlords alike to check for ongoing rentals in preferred districts,” said Prathyusha Gurrapu, Head of Research and Consultancy at Cushman and Wakefield Core, a real estate agency.
“This is first-of-its-kind initiative from the Abu Dhabi government that will help both tenants and landlords, providing further transparency to the market,” she added, echoing the general consensus on the impact of the rental index.
Abu Dhabi residential real estate has seen robust activity in the second quarter of 2024.
According to the recent Asteco report, Abu Dhabi market saw the delivery of around 2,400 residential units, particularly in Noya on Yas Island, Jubail Island, Masdar City, and Al Raha Beach. In the rental sector, the market continued to record strong activity, particularly in upscale apartment and villa locations.
Average apartment rents saw quarterly and annual increases of 1% and 2%, respectively.
Villa rents maintained a steady performance, reflecting a 5% increase over the past 12 months,” Asteco report said.
“Landlords in Abu Dhabi’s prime residential areas, particularly in communities such as Al Raha Beach, Saadiyat, Yas and Al Reem Islands, benefited from strong occupancy rates and high demand, with some properties even having waiting lists,” the report added.
Given the heightened activity in Abu Dhabi prime residential segment, the rental index will go a long way in stabilising the market and bolstering the trust of tenants and investors.
ADREC said it is planning to introduce two more metrics – commercial index and service charge index – with an aim to enhance the resilience and reliability of Abu Dhabi’s real estate sector.
Good times indeed are ahead for the realty sector in the emirate.
‘The platform is beneficial for both landlords and tenants, offering insight into rental rates across different city zones and sectors’
For a detailed perspective on the property market, visit: Dubai - VPI Residential Capital Values - August 2024
