Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
The value of residential properties in Abu Dhabi is expected to grow 16% in 2026 compared to 13% in 2025, according to a report by real estate consultancy ValuStrat.
The consultancy said Abu Dhabi’s residential sector is expected to maintain its upward momentum through 2026, supported by robust economic growth, rising demand, improved market sentiment and continued market maturity.
“A shift in performance dynamics is emerging, with apartments projected to outperform villas in terms of capital appreciation,” the report said.
Average residential rents are projected to increase by around 6% in 2026, with apartment rents expected to rise at a faster pace as villa rents approach affordability ceilings. Residential occupancy is forecast at 90% for the year.
The 2026 residential supply pipeline is estimated at 16,362 units, including around 64% apartments and 36% villas and townhouses. However, actual deliveries are expected to be significantly lower due to construction delays, with approximately 6,500 units likely to be completed by year-end, the report said.
ValuStrat also projected strong growth in Abu Dhabi’s office market, driven by corporate expansions and the establishment of new businesses. Office prices are expected to rise 10% in 2026, while rental values are projected to increase by more than 20%, especially for Grade A office spaces facing persistent supply constraints.
The consultancy estimated that around 4,200 square metres (45,208 square feet) of gross leasable office area would be added in 2026, taking Abu Dhabi’s total office stock to 3.99 million square metres. Office occupancy is projected at 93%.
In the hospitality sector, the report highlighted several upcoming hotel projects including Mondrian Abu Dhabi, Olympia Resort Abu Dhabi, and The Mangroves Abu Dhabi under LXR Hotels & Resorts.
ValuStrat projected average hotel occupancy in Abu Dhabi at 82% in 2026, with the average daily room rate forecast at Dh551 and revenue per available room expected to reach Dh452.
The consultancy said tourism numbers in the capital continue to rise in line with Abu Dhabi Tourism Strategy 2030, which aims to attract 39.3 million visitors annually, expand hotel capacity to 50,000 rooms and increase the sector’s contribution to GDP to Dh90 billion by 2030.
On the retail front, ValuStrat noted that the UAE e-commerce market is forecast to exceed Dh48.5 billion by 2028, with penetration projected at 15.3%.
The report cautioned that brick-and-mortar mall operators could continue to face downward pressure from the expanding e-commerce sector, leading to lower rents and higher vacancy rates.
Among upcoming retail developments, the report identified Lulu Mall in Shakhbout City and Mina Zayed Wharf shopping centre.
“Strong non-oil activity and continued population growth underpin demand across residential, commercial, industrial, retail and hospitality assets,” said Haider Tuaima, Managing Director and Head of Real Estate Research at ValuStrat.
“These structural drivers, combined with measured levels of upcoming supply, position Abu Dhabi for another year of steady market performance and sustained investor interest,” he said.
