Abu Dhabi Real Estate Market Overview – Q3 2018

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“Ghadan 21” is a 3-year AED 50 billion Abu Dhabi Government program, aimed at boosting the economy through investment in four main areas: business & investment, society, knowledge & innovation,and lifestyle. The first tenet was launched in September with the aim of creating an attractive environment for enterprise growth, developing the private sector, and stimulating industry projects.

One important element in the first Ghadan 21 announcement was to allow startups to launch without a physical address, making it easier for free zone businesses to trade onshore. While unlikely to have any immediate impact, these initiatives should boost the demand for real estate in Abu Dhabi over the longer term.

Aldar has announced the launch of Aldar Investments, a subsidiary with around $5.4 billion worth of real estate assets, which has since raised a $500 million sukuk dual listing on Abu Dhabi Securities Exchange (ADX) and the Irish Stock Exchange.

Residential rents and sales prices have continued to decline as anecdotal evidence suggests that vacancies are increasing. This is partly due to subdued demand as a result of job losses and cuts in housing allowances.

Office rents have remained stable in Q3 despite the decline in demand. However, the delivery of additional supply at a time of weaker demand is expected to place downward pressure on rents in the medium to long term.

While retail rents remained stable this quarter, property owners have been offering more flexible terms such as revenue share rents as opposed to base rents to attract and retain retailers.

The hospitality market registered a 3% increase in occupancy levels and a 6% drop in ADRs compared to the same period last year. Consequently, RevPar declined by 3% in YT August 2018 compared to the same period last year.

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Craig Plumb

Author: Craig Plumb

Craig has over 20 years’ experience providing clients with quality advice on real estate market conditions in the UK, Asia Pacific and the Middle East. With a background in urban economics and spatial planning, he has particular expertise in the areas of property market research, development consultancy, transport related infrastructure projects and corporate real estate.

Since moving to the UAE in 2006, Craig has authored over 50 research reports on different aspects of the MENA real estate market. He has also provided market research and consulting services to major investor, developer and government clients and has appeared as an independent real estate expert before the Dubai International Arbitration Centre (DIAC).

Craig holds a Bachelor of Arts in Economics & Geography from Lancaster University and an M.Phil in Environmental Planning from Reading University (UK).

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