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2nd Quarter Abu Dhabi Real Estate Market 2021 Quartely Review www.valustrat.com
VPI
ValuStrat Price Index
Market Intelligence.
Simplified.
REAL ESTATE
PERFORMANCE
VPI Residential VPI Residential
Capital Values Rental Values
67.3 77.7
Base: Q1 2016=100 Base: Q1 2016=100
2.1% 4.3%
Q-o-Q Q-o-Q
Source: ValuStrat
KEY INDICATORS
Source: ValuStrat, REIDIN, STR
Apartment Villa Apartment Villa
Asking Sales Price Asking Sales Price Asking Rents Asking Rents
12,491 10,596 118,000 213,700
AED/sq m AED/sq m 2 Bedrooms (AED p.a.) 4 Bedrooms (AED p.a.)
3.5% 9.3% 4.9% 3.6%
Q-o-Q Q-o-Q Q-o-Q Q-o-Q
Hotel Hotel Office Office
Average Daily Rate Occupancy Asking Sales Price Asking Rents
481.5 62% 10,370 860
(AED) Mar 2021 Mar 2021 AED/sq m AED/sq m p.a.
18.6% 4.2% -10.1% 1.9%
Y-o-Y Y-o-Y Q-o-Q Q-o-Q
Increase Stable Decline
1 | Abu Dhabi Real Estate Market 2nd Quarter 2021 Review
VPI
ValuStrat Price Index
Market Intelligence.
Simplified.
RESIDENTIAL
The valuation based ValuStrat Price VPI - ABU DHABI RESIDENTIAL CAPITAL VALUES
Index (VPI) for capital values in 5 Villa and 5 Apartment Locations
Abu Dhabi’s residential investment [Base: Q1 2016=100]
zones for the second quarter 2021,
increased 2.1% quarterly to 65.8
points. This was the first time the
VPI has witnessed three consecutive
92.4
4.1%
90.3
88.5
87.1
85.5
83.8
81.1
quarters of growth since 2016,
77.6
75.1
72.7
70.9
2.1%
69.1
aggregating 7.2% since Q4 2020.
67.9
64.7
65.8
67.3
62.6
1.0%
63.3
Annually, capital values were 3.9%
-1.6% -1.7%
higher recovering from the Covid-19
-1.8% -1.9%
-2.0%
-2.3% -2.4% -2.6%
headwinds of last year. -4.2%
-3.2% -3.2% -3.3% -3.3%
-4.3%
-4.6%
The weighted average residential
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
value this quarter was AED 8,816
2017 2018 2019
per sq m (AED 819 per sq ft), 2020 2021
apartments stood at AED 9,634
per sq m (AED 895 per sq ft), and ValuStrat Price Index (Capital Values) QoQ Growth (%)
villas at AED 6,867 per sq m Source: ValuStrat
(AED 638 per sq ft).
All properties monitored by the VPI
saw quarterly growth in capital VPI - ABU DHABI RENTAL VALUES
values ranging from 1.2% to 2.7%. 5 Villa and 5 Apartment Locations
[Base: Q1 2016=100]
Locations with the highest gains were
apartments in Al Reem Island 2%,
and villas located in Saadiyat Island
2.6% and Mohamed Bin Zayed City 4.3%
93.9
89.7
88.6
84.6
2.7%.
83.8
83.0
80.7
77.3
79.2
77.7
77.7
76.3
76.3
76.8
74.4
74.3
74.5
1.8%
1.2%
75.7
0.7%
The second quarter VPI - Residential
0.6%
0.0%
Rental Values saw a 4.3% quarterly -0.9% -1.0%
-1.2%
rise, and 4.5% an annual gain to -1.7%
-2.0% -1.8%
-2.6% -1.6%
-2.8%
77.7 points, this was the first positive -3.1%
citywide rental increase in five years. -5.7% -5.7%
Abu Dhabi’s gross yields averaged
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
7.4%, for apartments at 7.6% and
villas with 6.8%. 2017 2018 2019 2020 2021
ValuStrat Price Index (Capital Values) QoQ Growth (%)
Source: ValuStrat
For more details, please visit www.valustrat.com/vpi
www.valustrat.com | 2MACRO-ECONOMIC SNAPSHOT
• S&P Global Ratings and Moody’s Investor
Service announced affirmation of investment ABU DHABI CITY POPULATION
grade ratings for Abu Dhabi with
AA/Stable/A-1+ and Aa2 with stable outlook,
respectively. The rating agencies emphasised
the capital’s strong economic fundamentals
and large fiscal buffers backed by revenue
from the hydrocarbon sector
• An investment of more than AED 22 billion
directed towards cultural and creative sectors
was announced by the government in an
attempt to prepare and stimulate its
post-pandemic future as it diversifies the
1,640,000
1,720,000
1,807,000
1,912,300
2,023,600
2,141,400
2,266,100
2,395,200
economy away from oil
• The International Monetary Fund (IMF)
released a statement revising its initial GDP
growth outlook from 1.3% to 3.1% this year on
foot of the country’s strong fiscal and
monetary policy implemented to counter the 2014 2015 2016 2017E 2018E 2019E 2020E 2021E
pandemic-induced recession
Source: Statistics Centre Abu Dhabi, ValuStrat
• Latest data from General Administration of
Abu Dhabi Customs, the capital’s non-oil
foreign trade reached AED 201.2 billion in
2020, down 5.7% YoY. Imports contributed
45.9%, exports share was at 36.5% and
re-exports added another 17.5% of the total
non-oil foreign trade
CONSUMER PRICE INDEX VS. HOUSING INDEX • The Abu Dhabi Economic
January 2018 – YTD Department (ADDED) revealed
the list of 1,105 registered
commercial and industrial
120 activities viable for partial or full
ownership which is expected to
boost foreign direct investments
115
(FDIs) and would help achieve
its economic growth forecast by
110 6% to 8% during the next two
years
105
• As of May 2021, both the annual
and monthly inflation rates
100 increased 0.6%
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
• Housing and Utilities Expenses
2018 2019 2020 2021
was steady annually at 0.1%,
General Index (2014=100) and no change was recorded
Housing, Water, Electricity, Gas and Other Fuels when compared to previous
Source: Statistics Centre Abu Dhabi
month
3 | Abu Dhabi Real Estate Market 2nd Quarter 2021 ReviewRESIDENTIAL SUPPLY
• During Q2, 855 apartments finished ABU DHABI RESIDENTIAL SUPPLY
construction in five projects. This constitutes 2018-2022
7.3% of total forecasted new-build units for (’000 UNITS)
this year
0.3
• Notable completions included Y Tower Reem 1.0 3
(274 units), Al Faridah Al Zeina Complex 253
11
(234 units) and Olive Al Raha Beach (162 units)
241
238 241
• The remaining expected supply for this year 234
stands at 9,871 apartments and 961 villas
• Nearly 75% of the upcoming handovers will be
in Al Reem Island (3,407 units), Al Raha Beach
(2,765 units) and Yas Island (2,572 units)
• During Q2, an estimated 1,233 off-plan
2018 2019 2020 2021E 2022E
properties were launched including Aldhay
Bloom Gardens (181 units), Noya Viva and
Luma Yas Island (669 units), The Dunes Current Stock
Saadiyat Reserve (83 units) and Jubail Islands New Apartments
townhouses (300 units) New Villas
* May be subject to significant downward adjustment
Source: Urban Planning Council, REIDIN, MEED Projects, ValuStrat
RESIDENTIAL SALES
• The average citywide residential asking price APARTMENT ASKING PRICES
per square foot during the quarter
experienced a record increase of 5.2% QoQ
and 3.6% YoY. This was the first positive
annual growth observed since 2017
• The average asking price for ready
0.2% 3.5%
apartments stood at AED 12,491 per sq m Last Year Last Quarter
(AED 1,160 per sq ft), up 3.5% QoQ and was
relatively stable compared to last year
VILLA ASKING PRICES
• For ready villas, the average asking price
reached a record high and stood at
AED 10,596 per sq m (AED 984 per sq ft)
indicating asking prices to have jumped
9.3% QoQ and 11.7% YoY
11.7% 9.3%
Last Year Last Quarter
*Ready Properties Only
Source: REIDIN, ValuStrat
www.valustrat.com | 4RESIDENTIAL RENTS
• Overall average residential asking rents grew APARTMENT ASKING RENTS
4.5% when compared to the same period last
year
• On a quarterly basis, citywide average asking
rents experienced a record increase of 4.9%
not seen since 2016
• Apartment asking rents in Abu Dhabi City 3.0% 4.9%
Last Year Last Quarter
increased 3% YoY and were up 4.9% QoQ
• Citywide villa asking rents grew 6.2% YoY and VILLA ASKING RENTS
rose 3.6% QoQ
• Notable increases in average asking rents
were observed in Al Bandar, Saadiyat Island
and MBZ City
• Average annual apartment asking rents were
as follows: studios (AED 50,000), 1-bed (AED 6.2% 3.6%
Last Year Last Quarter
74,000), 2-beds (AED 118,000), and 3-beds
(AED 165,000) Source: REIDIN, ValuStrat
• For villas, annual rents for 2-beds
(AED 117,000), 3-beds (AED 140,000) and
4-beds (AED 214,000)
• The average occupancy rate, among a sample
of more than 44,000 residential units in
Abu Dhabi city, stood at 82%
AVERAGE ASKING RENTS
(’000 AED PER ANNUM) AND QUARTERLY CHANGE (%)
Apartments Villas
51 110
Al Reef 62 -1.4% MBZ City 133 7.4%
82 153
59 102
Al Reem 85 -2.4% Al Reef 133 -0.2%
120 147
79 145
Al Muneera 106 -0.4% Al Raha 165 -3.6%
137 217
92 273
Al Bandar 139 16.5% Saadiyat 423 7.5%
230 546
One Bedroom Three Bedroom Three Bedroom Five Bedroom
Two Bedroom Quarterly Change (%) Four Bedroom Quarterly Change (%)
Source: REIDIN, ValuStrat Source: REIDIN, ValuStrat
5 | Abu Dhabi Real Estate Market 2nd Quarter 2021 ReviewOFFICE SUPPLY
• An estimated 33,153 sq m (356,856 sq ft) GLA OFFICE SUPPLY
of workspaces were completed in three 2018-2022
projects during the first half of this year (Million sq m GLA)
• These were commercial towers in Al Raha
Beach, Al Hosn Sector W7/1, and Sector W58 0.02
3.80 0.131 3.94
• There are seven remaining projects expected 3.80
3.69
to finish construction this year which will
inject additional 97,725 sq m (1.1 million sq ft) 3.58
GLA to the capital’s office stock
• Majority of these completions will be located
in Al Raha Beach development with
64,293 sq m (692,043 sq ft) GLA
2018 2019 2020 2021E 2022E
Existing Stock Expected Supply
Source: REIDIN, MEED Projects, ValuStrat
OFFICE RENTS
• Office asking rents in primary commercial OFFICE ASKING RENTS
districts rose 1.9% since the previous quarter,
and saw 4.3% annual increase
• The average citywide asking rent for offices
sized between 93 sq m (1,000 sq ft) to
186 sq m (2,000 sq ft) stood at AED 860
4.3% 1.9%
per sq m (AED 80 per sq ft) Last Year Last Quarter
Source: REIDIN, ValuStrat
• Abu Dhabi main island commanded lease
rates which averaged at AED 850 per sq m
(AED 79 per sq ft) while average office rents in
Al Reem Island followed closely at
AED 840 per sq m (AED 78 per sq ft)
• The average occupancy among buildings
within the city’s central business districts
was estimated at 84%, however, effective
building occupation may be much lower due
to flexible work arrangements
www.valustrat.com | 6RETAIL SUPPLY
• No notable new openings or completions MALLS AND SHOPPING CENTRES
during the quarter, keeping the total stock at (‘000 sq m GLA)
1.8 million sq m (18.9 million sq ft) GLA 460
• The capital currently has a collection of
5 super-regional malls, 11 regional shopping
centres and 14 community retail complexes 859
112
• Available data for under construction projects
614
remained at estimated 367,793 sq m
(4 million sq ft) GLA
227
• This will include the much-anticipated
super-regional category Al Reem Mall
boasting an approximately 200,000 sq m
48
(2.2 million sq ft) GLA and will host 450 stores,
85 food and beverage outlets and 7
6,800 parking spaces
Convenience Neighbourhood Community Regional Super Regional
(< 3k sq m) (3k-10k sq m) (10k-30k sq m) (30k-90k sq m) (> 90k sq m)
Retail Completed
Retail Under Construction
Source: REIDIN, ValuStrat
RETAIL PERFORMANCE
• A total of AED 2.4 billion Visa card NUMBER OF MALLS AND
transactions, up 17% YoY, was recorded by SHOPPING CENTRES
Retail Abu Dhabi during this year’s edition of
shopping season
• Aldar’s retail portfolio achieved 83%
occupancy, down 6.7% YoY as per their latest 14 2
quarterly presentation
9 11 2
• The Galleria Al Maryah Island announced
footfall reached 2.7 million in the month May 5
2021, its highest number of visits since it 3
opened in 2019
• The UAE saw a 21% YoY upsurge in online
shopping transactions, as per latest
Mastercard analysis Convenience Neighbourhood Community Regional Super Regional
(< 3k sq m) (3k-10k sq m) (10k-30k sq m) (30k-90k sq m) (> 90k sq m)
Retail Completed
Retail Under Construction
Source: REIDIN, ValuStrat
7 | Abu Dhabi Real Estate Market 2nd Quarter 2021 ReviewHOTEL SUPPLY
• Two hotel projects are in the current pipeline, HOTEL ROOM SUPPLY
one of which is confirmed to have finished 2018 -2022
(’000 KEYS)
construction and the other nearing
completion at 90%
0.6
• These were Double Tree by Hilton Yas Bay 1.0 31
29 29 29
(545 rooms) and Warner Bros Hotel (257 keys)
29
• As per available data, the remaining number
of hotel rooms expected to enter the market
for the rest of the year will come from
InterContinental Grand Marina (184 rooms)
2018 2019 2020E 2021E 2022E
Hotel & Hotel Apt Rooms
New Supply
Source: DCTAD, MEED Projects, ValuStrat
HOTEL PERFORMANCE
• In April, the Department of Culture and ABU DHABI - HOTEL STAR RATING
Tourism Abu Dhabi (DCTAD) announced its Q2 2021
goal to achieve 23 million visitors per year by
2030
• The agency added, pre-pandemic level of 17%
tourism activity could return as early as 2024
• Latest from STR Global, the UAE recorded an
overall occupancy of 62%
12%
• The Average Daily Rate (ADR) stood at
AED 481.45, up 18.6% YoY and Revenue per 50%
Available Room (RevPAR) was at AED 298.7,
climbing 77.1% YoY
• Abu Dhabi’s sovereign fund ADQ revealed
plans to merge two hospitality groups, The 21%
Abu Dhabi National Hotels (ADNH) and
Abu Dhabi National Exhibitions Company
(ADNEC) to become a larger entity with total
assets worth more than AED 19.8 billion, as 5 Star 4 Star
part of Abu Dhabi’s long-term goal to expand 1-3 Star Hotel Apt
into non-oil sectors Source: DCTAD
www.valustrat.com | 8INDUSTRIAL INVESTMENT / SUPPLY
• As of June, 11 projects worth AED 4.1 billion INDUSTRIAL PRICES
were under construction (AED/sq m)
• Notable new projects include a manufacturing 3,767
3,660
facility with 23,000 sq m (247,570 sq ft) BUA
and warehousing units with total 220,497 sq m
(2 million sq ft) BUA in Khalifa Industrial Zone
Abu Dhabi (KIZAD) 1,615
1,076
• The Industrial Development Bureau (IDB)
announced Made in Abu Dhabi brand which
aims to develop a total of 888 factories of
which 678 are in the capital city, equivalent to
a total investment value of AED 369.32 billion
ICAD Mussafah
• A research and innovation centre covering an
area of 820,000 sq m (8.8 million sq ft) was
Price High Price Low
announced to be built in Industrial City
Abu Dhabi (ICAD) Source: ValuStrat
INDUSTRIAL PERFORMANCE
• Industrial property prices remained relatively storage facilities priced at the upper end and
stable on a quarterly basis, with some new older properties at the lower end
built facilities with modern specifications
commanding higher pricing. However, we • Asking rents quoted generally ranged
observed declines for older properties located between AED 161 to AED 388 per sq m
in Mussafah per annum (AED 15 to AED 36 per sq ft
per annum) depending on factors such as
• Prices generally ranged between industrial-grade specifications, quality, age,
AED 1,076 per sq m to AED 3,767 per sq m condition, and size of the industrial facility
(AED 100 per sq ft to AED 350 per sq ft) in with slightly higher rates for facilities having
established industrial areas with high provisions for cold stores. Quarterly decreases
specification/quality built, and modern cold in quoted rents were observed most
monitored areas
INDUSTRIAL RENTAL RATES
(AED/sq m)
388
377 377
301
194 194 194
161
Rent High
Rent Low
Source: ValuStrat Al Mina Al Mafraq ICAD Mussafah
9 | Abu Dhabi Real Estate Market 2nd Quarter 2021 ReviewIN MEDIA
21 May 2021 8 May 2021
Allowing 100% foreign ownership in UAE 7 main factors that support Abu Dhabi real
firms will boost property market estate in attracting more international
“The new changes to the Companies Law will have a investors
positive impact on the office market, particularly for The property market in Abu Dhabi is expected to
smaller offices sized between 1,000 to 2,000 square feet stabilise in 2021 amid balanced supply, according to a
and would also create further demand for shared and new report from real estate consultancy firm ValuStrat.
flexible office space,” Haider Tuaima, Head of Real “Rents and capital values in established villa locations
Estate Research at ValuStrat told Zawya. “No doubt could stabilise and perhaps witness gradual
these changes are welcome by the market, as they are appreciation. Apartments could follow suite towards the
expected to fuel further demand for office space, as end of 2021,” the report said.
well as residential space,” he added.
4 May 2021 28 April 2021
Abu Dhabi completes Dh11.5bn of property Abu Dhabi’s residential capital values up;
transactions in Q1 rents stable
Leading real estate consultancy firm ValuStrat, whose A separate report by real estate consultancy firm
price index measures residential values in the capital ValuStrat also indicated signs of recovery in the
increased for the second quarter in succession during Abu Dhabi property market at the end of last year. In
the first three months of the year for the first time since the fourth quarter of 2020, the emirate’s residential
2016, the consultancy said in a report last week. investment zones saw a one per cent quarterly uplift
for the first time in three years, it said.
14 April 2021
Aldar’s Yas Island project sells out in 48
hours
The property market in Abu Dhabi is expected to
stabilise in 2021 amid balanced supply, according to a
report from real estate consultancy firm ValuStrat.
“Rents and capital values in established villa locations
could stabilise and perhaps witness gradual
appreciation. Apartments could follow suit towards the
end of 2021,” the report said.
www.valustrat.com | 10ABOUT
ValuStrat is a leading
consulting firm headquartered DE C L A N K ING, M R IC S
in Dubai providing Advisory, Managing Director & Group Head
Strategic
Partners of Valuations, Research, of Real Estate
Industrial Consulting and Due declan.king@valustrat.com
Diligence services across a
diverse range of industry
Financial sectors since 1977. Offices in
Institutions
the UAE, UK, Saudi Arabia, H A IDE R T U A IM A
Pakistan and Qatar serve over Head of Real Estate Research
1,000 corporate clients in the haider.tuaima@valustrat.com
Middle East.
Client base includes financial institutions, local corporates,
multinationals, governments, SMEs, family businesses and
startups. V IS M E R M U L E NGA , M R IC S
Director - Commercial Valuation
Some of the key sectors serviced by ValuStrat’s consulting vismer.mulenga@valustrat.com
team include real estate, hospitality, healthcare, education,
manufacturing, retail, entertainment, transport and FMCG.
ValuStrat is a Royal Institution of Chartered Surveyors (RICS)
Regulated Firm and the first company head quartered in all
of MENA and Asia to be accepted into the prestigious RICS
C H E R Y L M C A DA M , M R IC S
Director - Residential Valuation
TechAffiliate program.
cheryl.mcadam@valustrat.com
DA R SH A N SH A H , M R IC S
VPI
Director & Head of Industrial Consulting
darshan.shah@valustrat.com
ValuStrat Price Index
VPI Online www.valustrat.com/vpi
SE A N SW INB U R NE , M R IC S
The ValuStrat Pricet Index for Abu Dhabi’s residential capital values is a Manager - Commercial Valuations
valuation-based index constructed to represent the quarterly price sean.swinburne@valustrat.com
change experienced by typical residential units within Abu Dhabi City.
The ValuStrat Price Index for Abu Dhabi’s residential rental values is
constructed to represent the quarterly rental change experienced by
typical residential units within Abu Dhabi City. The VPI applies weighted
averages using data samples representing more than 90% of all
property types across the city’s investment zones and is built by our
expert RICS Registered Valuers.
DUBAI LONDON
Research Methodology
Every effort has been made to ensure the accuracy of this document.
New supply data covers 24 defined areas in Abu Dhabi City including
non-freehold investment areas. Only completed and under construction
projects are included. The new supply data does not include announced
projects and projects in design phase. The new supply database does
not take into account most private building projects. Both the price and
rental data are calculated and derived from carefully chosen listings
RIYADH JEDDAH
that have been properly cleansed to exclude duplicates and outliers
within predetermined areas and districts for office and residential
properties.
Copyright © ValuStrat Consulting FZCo. 2021
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the prior written consent of ValuStrat Consulting FZCo. We welcome
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