Abu Dhabi real estate market builds growth across the board
MAYS IBRAHIM (ABU DHABI)Abu Dhabi's real estate market recorded steady and broad-based growth in the first quarter of 2025, with gains across residential, office, retail and hospitality segments, according to ValuStrat's latest market review.The ValuStrat Price Index (VPI) for the residential sector rose 2.1% quarter-on-quarter (QoQ) and 7.2% year-on-year (YoY) to reach 125.6 points, based on a baseline of 100 in Q1 2021.Villas outperformed apartments, appreciating 2.7% QoQ and 9.7% YoY to 134.7 points. Apartment prices rose 1.5% QoQ and 4.5% YoY to 116.9 points.The average home value in Abu Dhabi reached Dh10,226 per square metre, with apartments averaging Dh10,979 per m2 and villas Dh8,407 per m2.Among villa submarkets, Saadiyat Island led annual capital gains for villas, up 21.2%, followed by Al Raha 8.2% and Mohammed Bin Zayed City 4.7%.Rental values mirrored sales performance, with the residential rental VPI rising 2.2% QoQ and 9% YoY to 121 points.Apartment rents grew 3.4% QoQ and 11.6% YoY, while villa rents remained flat quarterly but were up 6.3% annually. The average gross rental yield stood at 7.8%, with apartments yielding 8.3% and villas 6.7%.The average annual apartment asking rents in Abu Dhabi City hit Dh114,000. Studio apartments averaged Dh63,000; one-beds Dh89,000; two-beds Dh125,000; and three-beds Dh180,000.Al Reef (3.4%), Al Bandar (2.8%), and Al Muneera (2.5%) saw the highest quarterly rental increases.
Market Activity and SupplyThe first quarter saw the handover of 90 apartments and 189 villas, representing 2% of the expected 2025 residential pipeline of 13,941 units. Major projects progressed across Saadiyat Island, Zayed City, Ghantoot and Masdar City, reflecting developer confidence.While off-plan sales slowed due to fewer new launches, average prices and transaction values rose, according to the report.Ready property transaction volumes dipped 33.6% QoQ but climbed 13.6% YoY. The average price for ready homes reached Dh12,335 per m2, up 5.8% YoY, while the average transaction size surged 28.9% QoQ to Dh 2.6 million.Mortgage-backed transactions dominated activity, accounting for 2,846 deals totalling Dh9 billion, compared to 1,375 cash transactions worth Dh5 billion.
Strong Gains Across Property SegmentsAbu Dhabi's office market remained resilient amid high occupancy and rental growth. Asking prices for office units climbed 6% QoQ to Dh2.25 million, while rents in core commercial districts jumped 8% QoQ and 31.8% YoY. Occupancy in these areas reached 90.5%. The city's total office supply stood at 3.9 million m2 of Gross Leasable Area (GLA).Key additions this year include the HB Office Tower on Yas Island and Masdar City Square, the latter set to contribute 50,000 m2 of new space in Q2 2025.Retail continued to benefit from strong footfall and tenant sales. In Q1 2025, shopping centre stock totalled 1.95 million m2 of GLA in Q1.The UAE's e-commerce market is forecast to surpass Dh48.5 billion by 2028, with online sales expected to make up 15.3% of the total retail market.The hospitality sector posted impressive growth, buoyed by tourism, the report showed.Hotel occupancy in Abu Dhabi averaged 86.9% in the first two months of 2025, a 1.2% increase YoY. The city welcomed 800,000 hotel guests by February, with 5.2 million visitors in total during 2024 – a 28.7% annual rise.The average room rate rose 37.1% to Dh683, and revenue per available room (RevPAR) jumped 38.7% to Dh594.The Department of Culture and Tourism expects total hotel supply to exceed 50,000 keys by 2030, up from 34,372 in February 2025.
Upcoming additions include the Mondrian Hotel in Downtown Abu Dhabi and the Waldorf Astoria, set to open at the former Anantara Eastern Mangroves site, offering 167 rooms with views of Mangrove National Park.
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