Market confidence in Abu Dhabi's real estate sector is witnessing an uptick, according to a recent report from real estate consultants Core.
Propped by a favourable economic environment, resumption of tourism, successful vaccination programme and scaling back of Covid-19 restrictions, the market is expected to remain steady across 2022.
According to Core, the residential market is seeing a relative oversupply of apartments, while the villa segment is facing an undersupply.
"While Covid-19 led lifestyle changes and need for larger spaces have helped villa district performance, most recovery happened during Q3-Q4 2020, with city-wide sales prices remaining relatively flat with just a 2 per cent year-on-year rise for both villas and apartment districts," says David Short, head of Abu Dhabi at Core.
Increased market activity in recent months supports the report's findings.
The UAE developer Aldar Properties has announced the AED2bn ($544.5m) Fay Alreeman villa community in the Al-Shamkha area of Abu Dhabi.
Fay Alreeman’s launch follows Aldar’s announcement in early April about plans to develop an AED15bn ($4bn) residential community at Saadiyat Island.
The office market in Abu Dhabi is similarly facing renewed demand. Flexibility remains key, with serviced offices remaining popular for start-ups and new market entrants, according to Core.
Occupancy levels are understood to have risen in Grade A offices even as rents have increased, due to their limited supply. Meanwhile, Grade B offices are growing in popularity due to their availability and value.
The industrial and warehousing sector continues to see strong performance, attributed to e-commerce growth during the pandemic, along with a push for localisation of manufacturing.
"The pandemic gave new impetus to e-commerce and logistics sectors in Abu Dhabi with a surge in demand for last-mile deliveries and temperature-controlled warehousing," says Short. "The concept of dark stores is gaining popularity with many dark store operators looking to increase market presence in Abu Dhabi with an average inquiry ranging from 200-400 square metres."
Lead image courtesy Kamil Rogalinski on Unsplash
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