Today's Edition
ALLAN JACOB (ABU DHABI)
Abu Dhabi’s economic diversification has led to steady growth and an increase in investments while demand continues to grow for commercial office property, industrial and logistics facilities.
The Emirate’s non-oil sector is booming which has led to a rise in demand for commercial spaces as companies and professionals relocate to up and coming areas in the city, according to a new report. Infrastructure is being ramped up to meet the influx of investors and talented professionals.
A report by Savills, a global real estate services provider, said Abu Dhabi’s office market saw impressive growth in the first quarter of the year as the emirate’s non-oil sector continued its upward trajectory.
Demand has grown for Grade A office assets such as Abu Dhabi Global Market (ADGM) and International Tower, with both having achieved around 95% occupancy.
ADGM saw a 32% increase in operational firms and a 22% rise in the workforce in 2023, pointing to the growing demand for office spaces.
Maryah Island, Capital Centre, Masdar City, and Al Raha are hot property and have heightened interest for their connectivity, infrastructure, and the quality of buildings, according to the report.
However, the high occupancy in these areas is also driving rental increases, but with over 90,000sq.m. of new office space expected to come on stream by 2026, Savills believes rents should stabilise in these areas.
Besides, major projects like The Link Masdar City and HB Office Tower are in the works that could meet rising demand. Industrial spaces rents in Abu Dhabi have risen by 2% quarter-on-quarter.
ICAD 1 and KEZAD were the top industrial destinations with a 14% year-on-year increase. Buildings with advanced features like temperature control continue to command premium rents, the report said KEZAD, in particular, is prime location as it is strategically located between Dubai and Abu Dhabi.
It is also close to Khalifa Port. KEZAD Group is also investing Dh621 million in developing 250,000sq.m. of warehousing capacity by the end of 2025.
Aldar’s logistics asset, ADBH, is expanding by 33,000sq.m. Major firms like Etihad and Mubadala are expected to enable it reach full occupancy, Savills said.
“Abu Dhabi aims to bolster its non-oil economy and establish itself as a significant player in global manufacturing. Government programmes like the Industrial Sector Strategy and the ‘Make it in Emirates’ initiative have facilitated business expansion by providing financing, incentives, and support,” said Stephen Forbes, Savills head in Abu Dhabi.
Michael Fenton, Director of Industrial & Logistics at Savills Middle East, added that “robust growth in the non-oil economy and the increasing demand for top-tier industrial and logistics facilities underscore the emirate’s commitment to fostering a business-friendly environment.”
The Emirate’s non-oil economy showed growth of 9.1%, and contributing to a 3.1% increase in the real GDP in 2023.
Small- and medium-sized enterprises (SMEs) comprise 98% of businesses and contribute over 42.8% to the non-oil GDP.
Abu Dhabi’s Department of Economic Development (ADDED) reported a 51.5% increase in industrial licences issued in 2023.
Maryah Island, Capital Centre, Masdar City, and Al Raha are hot property and have heightened interest for their connectivity, infrastructure, and the quality of buildings
