MAYS IBRAHIM (ABU DHABI)
Abu Dhabi's property market is entering an accelerated growth phase in 2026, with residential prices expected to rise 16%, according to ValuStrat.
The consultancy's Abu Dhabi – Real Estate Market Outlook 2026 attributes this to robust economic growth, increasing demand, improved market sentiment, and continued market maturity.
According to the International Monetary Fund (IMF), the UAE economy is set to grow by 5% in 2026, supported by strong non-oil sectors.
In Abu Dhabi's residential sector, ValuStrat forecasts rental rates will increase by around 6% in 2026.
Apartments are expected to outperform villas in both capital appreciation and rental growth.
The 2026 residential supply pipeline is estimated at 16,362 units, around 64% apartments and 36% villas and townhouses.
However, the report argues that historical trends of construction delays indicate that actual deliveries will be lower; approximately 6,500 units are projected to be completed by year-end.
Meanwhile, Abu Dhabi's office market is experiencing unprecedented demand, driven by corporate expansions and the establishment of new businesses, according to ValuStrat.
Office prices are projected to rise by 10% in 2026, while rental values are expected to increase by more than 20%.
"Grade A offices are set to continue outperforming the market, driven by persistent supply constraints," the report said.
Developer estimates show that 4,200sqm (45,208sqft) of gross leasable area is expected to be added this year, bringing Abu Dhabi's total office stock to 3.99 million square metres (43 million square feet).
In the hospitality sector, Four-to-five-star hotels are expected to dominate upcoming supply.
The report highlighted upcoming developments, including Mondrian Abu Dhabi, Olympia Resort Abu Dhabi and The Mangroves Abu Dhabi, and LXR Hotels & Resorts.
"Occupancy levels are expected to improve during the typically low-demand warmer months, aided by Ramadan coinciding with the cooler season."
According to ValuStrat, local guests will remain key drivers of occupancy and revenues for affordable to mid-affordable hotels.
Abu Dhabi's logistics sector continues to see sustained investor confidence, particularly for stabilised Grade A assets in strategic industrial zones such as KEZAD.
ValuStrat points to sustained demand from e-commerce, manufacturing and regional distribution, alongside limited new supply, as drivers of upward pressure on rents – "a trend expected to persist in the near term."
The outlook also references major infrastructure projects, including the phased delivery of Etihad Rail's passenger network through 2026 and Abu Dhabi's planned Light Rail and Tram network, scheduled to begin first phase of construction this year.
Upcoming projects in the retail sector include Lulu Mall in Shakhbout City and Mina Zayed Wharf.
The report warns that brick and mortar mall operators could face continued pressures from the growing e-commerce sector.
The UAE's e-commerce market is forecast to surpass Dh48.5 billion by 2028, with a projected penetration rate of 15.3%
On the regulatory side, recent VAT amendments, effective from January 1, aim to streamline compliance and improve the operating environment for businesses by removing self-invoicing requirements under the reverse charge mechanism.