Despite market softening, Abu Dhabi remains a favourable real estate investment opportunity
Abu Dhabi has emerged as one of the top three real estate investments markets in the GCC, despite market softening in 2016, according to a recent report by Al Masah Capital, an investment and advisory firm based in the region.
Among all markets; Dubai, Abu Dhabi and Doha have emerged stronger owing to international projects, foreign investment flows and a growing population.
Experts maintain that despite the soft market conditions, Abu Dhabi, Dubai and Doha still offer more favourable yields on investments than mature markets. Current Abu Dhabi, apartment rental yields are about 6% but could even be as high as 10%. A property law introduced in January 2016 has also made buying properties more transparent.
The GCC real estate sector is one of the fastest growing sectors across the world, albeit the recent slowdown in economic growth due to oil price fluctuations. The Al Masah Capital report reaffirmed that the GCC markets are still gaining a lot of investor attention as prices are relatively stable, which reflects the real estate market’s maturity and the improved regulatory environment in the wake of plummeting oil prices.
Over the past decade, Abu Dhabi, Dubai and Qatar have witnessed rapid economic development and demographic changes, including the influx of expatriates, which in turn has increased the region’s overall population.
According to Alpha Cities Index, created by consultancy Wealth-X, Abu Dhabi featured on the ranking of the 50 most important cities for property ownership among the world’s wealthiest people.
Ultra-high net-worth individuals (UNHWIs) – those with a net worth of USD 30 million or more – believe Abu Dhabi to be one of the 50 most attractive cities when considering property purchases worldwide.
Three GCC cities made the top 50 with Dubai securing the highest regional placing at 36th, Abu Dhabi was ranked 50th and Kuwait City 42nd.
The rankings illustrate that Abu Dhabi remains an attractive real estate choice, despite the current economic climate. Evidence can be seen at the upcoming Cityscape Abu Dhabi, where more than 90% of show floor space has already been sold for this year’s event.
Held under the patronage of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, Cityscape Abu Dhabi will span more than 18,000 square metres of dedicated exhibition space this year and will include unveiling and an update of major projects in the region and in Abu Dhabi.
According to property consultant, JLL, Abu Dhabi will see 5,000 new units to be completed in Abu Dhabi along the Corniche, Al Raha Beach, Reem Island and Saadiyat Island this year. However, there is a likelihood that many of these will be delayed, says the consultant, reducing the actual completion number.
Discussing the Abu Dhabi market, Craig Plumb, Head of Research at JLL MENA, says that the emirate at the moment reflects its economic strength. “As the regional economic situation improves, an increase in GCC tourism is expected to contribute to the recovery of the hospitality and retail sectors, reflecting positively on the UAE real estate market as a whole.”