Driven by domestic demand, says CBRE, the contribution of wholesale, retail trade, hotel and restaurants accounted for around 12% of total GDP in Abu Dhabi
Commenting on Abu Dhabi’s retail sector, Mat Green, Head of Research & Consulting UAE, CBRE Middle East, said: “Whilst 2017 has not seen the delivery of any major new retail facilities, there is rising development activity in the community retail segment, with multiple new centres being built as part of mixed-use masterplan developments, and within the emirate’s satellite towns, as the government strives to provide better quality facilities and more convenience to the local population.”
Major upcoming malls include Maryah Central and Reem Mall, both of which are regional sized centres, with GLAs of 146,000 sqm and 200,000 sqm respectively. The emirate will also see the handover of Al Falah Medical Mall in Khalifa City during Q3 2018. The scheme will offer a holistic wellness provision, and represents the first concept of its kind in the UAE, says CBRE.
When looking at hospitality, CBRE reveals that Abu Dhabi welcomed around 16.23 million visitors during the first 8 months of the year. Although, according to CBRE’s Q3 2017 Abu Dhabi MarketView report, despite observed improvements in overall hotel guest numbers, the hospitality sector’s general performance indicators such as occupancy, ADR's and RevPAR all remain down.
“With demand from the corporate sector remaining muted, strengthening of domestic visitor numbers and further expansion of MICE initiatives have become increasingly important as hotels look to improve upon the current weakening revenue performances,” said Green.
Commenting on the residential sector, CBRE reveals that even though Abu Dhabi’s average residential rental experienced downward pressure, the market is witnessing a somewhat mixed performance, with declines depending on the specific location. “As a result, landlords are being forced to become more flexible in their negotiations with tenants, in order to lessen the potential void risk and strengthen the tenant loyalty,” said the consultant.
“Amidst falling rental prices, there remains an apparent shortage of housing units targeted towards the dominant low to middle income segments of the population. Whilst a number of mid-market projects have been launched and subsequently delivered, the size of these developments remains insufficient to cater to the overall market demand for affordable housing options,” commented Green.