The market for selling off-plan residential units in Abu-Dhabi achieved significant growth during the past year, with a new level of sales exceeding 36 Billion Dirhams, a growth rate of 200% compared to 2022, according to the 2023 annual report issued by “ALDAR Properties”.
The report confirmed that the ready real estate market in Abu-Dhabi witnessed strong growth, supported by increased demand from foreign investors, as the value of residential unit sales increased to 8 Billion Dirhams last year, compared to 7 Billion in 2022.
The report stated that it is expected that there will be a major boom in the completion of residential projects in Abu-Dhabi, especially in areas such as Yas and Saadiyat Islands, in addition to the delivery of the first units in locations such as Jubail Island, noting that about 37 units are scheduled to be delivered. One thousand new housing units over the next three years in Abu-Dhabi, with an average of about 12 thousand units each year.
The report added that activity in the market for selling off-plan units is expected to continue, driven by the increasing demand from non-resident foreign investors, and supported by the increasing number of expatriates who are buying homes, whether as end-users or investors, as they seek to enhance their presence in the country, indicating that it would This will contribute to creating a larger and more liquid market for prefabricated homes, thus supporting future growth in residential unit sales, and consolidating Abu-Dhabi’s position as a growing global city.
Commercial real estate
The report confirmed that the office market in the Emirates witnessed a boom supported by a strong non-oil economy, and is witnessing continuous demand in both Abu-Dhabi and Dubai, whether from new companies entering the market or the growth and expansion of the operations of existing companies, and the demand was for distinguished office spaces of an excellent class within the financial free zones in the UAE, it is exceptionally strong, with occupancy rates approaching 100% in both the Dubai International Financial Center and Abu-Dhabi Global Market.
The report indicated that the average rent for premium office space throughout the city of Abu-Dhabi amounted to about 2,000 Dirhams per square meter annually, an increase of 12% over the previous year.
Abu-Dhabi is expected to witness the completion of approximately 120,000 square meters of additional office space over the next three years, to complement the current stock of 4 Million square meters. This gradual growth represents an increase of only 3%, which is a much lower number than what was observed in the past. This lack of supply is expected to help maintain the current upward trajectory of occupancy levels and rental rates for high-quality office properties, according to the report.
Retail sector
The report stated that the retail sector in the UAE continued to recover, supported by the significant increase in tourism, local population growth, and continued job creation, explaining that, however, the retail sector shows a state of instability due to the differing performance of assets and sub-markets based on the quality of facilities, geographical location and their location. Inside the market. And the retail sector in Abu-Dhabi witnessed a growth in the number of visitors on an annual basis, but these numbers did not recover to pre-pandemic levels, and this situation confirms the profound economic repercussions of the COVID pandemic and some shifts in consumer behavior, such as the focus on electronic shopping and the tendency to into local shopping destinations.
The report expected that the retail sector in the UAE next year will witness further improvement with continued growth in the economy and tourism market, which will attract more residents and stimulate the labor market across the Emirates. Future retail spaces in Abu-Dhabi will be very limited, as it will add only 150,000 square meters. By the end of 2026, this growth will be distributed among several mixed-use projects, community shopping centers and retail outlets.
Dubai market
Regarding the Dubai market, the report stated that the Dubai market for selling off-plan units also witnessed a noticeable increase to 203 Billion Dirhams by the end of 2023, compared to only 133 Billion Dirhams in the previous year. The prefabricated homes market in Dubai also witnessed a noticeable boom, and its value reached 112 Billion Dirhams compared to the Dubai market. By 90 Billion Dirhams in the previous year.
In addition: Dubai is expected to witness a steady rise in project completion, with about 180,000 units under planning or construction in the long term, taking into account the ratio of projects that have been delivered compared to those on which work has begun, and the number of new units is likely to approach . Which started with 120,000 units that will be delivered at the end of 2026, with an average of about 40,000 units annually.
With regard to offices, office vacancy rates in the Dubai Central Business District are about 10% at the present time, which reinforces the continuous rise in rental prices for premium-class offices, as they witnessed an annual growth of 15% to reach about 2,425 Dirhams per square meter annually, at the time. Likewise, it was noted that rental rates and occupancy rates are significantly higher in the prime DIFC North area.
Dubai is scheduled to witness the introduction of approximately 280,000 square meters of new office space from 2024 to 2026, and the majority of this upcoming supply will be completed in the short term and with second-class quality or lower. This scenario is likely to lead to a continuous increase in rents for high-quality office space. With minimal convenience for renters in a market increasingly dominated by landlords.
The report indicated promising future expectations for the retail sector in Dubai, as market performance and high occupancy levels indicate that further expansion is viable with approximately 364,000 square meters of new retail space, which includes several major shopping centers.
Ras Al-Khaimah
The 2023 annual report issued by ALDAR Properties confirmed that Ras Al Khaimah is likely to witness the delivery of 4,000 new residential units by 2026, which is an increase in the current freehold stock of about 11,000 units in locations such as Marjan Island, Mina Al Arab and Al Hamra Village. However, future development plans herald further growth and expansion, as evidenced by the large volume of recent and upcoming project launches across the emirate, and this indicates that the real estate market in Ras Al Khaimah is still in its early stages of development as a primary and secondary housing market.