Today's Edition
ISIDORA CIRIC (ABU DHABI)
Abu Dhabi's real estate market closed out 2024 with one of its strongest performances in over a decade, with soaring demand for luxury homes and record office leasing pushing several sectors to record highs.
Completed apartment sales jumped 40% to Dh5 billion, while prices in luxury communities like Saadiyat rose by up to 15%, as buyers chased ready-to-move-in units in prime waterfront and island communities, according to MPM Properties' annual Abu Dhabi Real Estate Market Overview.
Residential Market Leans Into Luxury
The capital added over 5,000 new homes in 2024, taking the total residential stock to around 305,400 units, according to the report. Ready property transactions climbed 36%, while completed apartment sales hit a two-year high in Q4, with 1,098 units sold.
Prices followed suit: Al Bandar topped the chart at Dh1,550 per square foot, while Yas Island's Waters Edge saw annual price growth of 13%. Even mid-tier communities such as Masdar City posted double-digit gains.
This renewed appetite for delivered units coincided with a notable tapering in off-plan apartment sales volumes by the end of 2024, despite early-year highs. The year began with a flourish – Q1 alone saw 1,485 off-plan apartments sold at a peak value of Dh 2.6 billion, but by Q4, that figure had dropped to 691.
The villa market echoed this trend, with completed transactions climbing 30% YoY. The skew toward luxury was even more evident, with Hidd Al Saadiyat breaking all records at Dh2,700/sqft, up 14% YoY. More affordable areas like Hydra Village and Al Reef also edged upward, with gains of 6-7%, reflecting a citywide uplift.
Buyers weren't the only ones making bold moves. Rents climbed across the board, with luxury apartments and villas driving the sharpest increases. Saadiyat Beach saw 3-bed apartments command up to Dh195,000/year – a 19% rise – while 5-bed villas at St. Regis topped out at Dh750,000, up 13%.
Looking ahead, MPM research projects a notable acceleration in residential deliveries between 2025 and 2027, with 2026 expected to mark the peak. These additions may ease the supply-demand imbalance that currently favours sellers and landlords, though the luxury segment may remain tight for longer, given persistent demand and slower delivery timelines.
Office Leasing Demand Outpaces Supply
Abu Dhabi's office market emerged as another powerful engine of growth. New leasing activity skyrocketed 33% YoY in 2024, culminating in a record-breaking Q4 with over 10,700 registrations – the highest quarterly figure in two years.
Tenants, particularly in finance and tech, are chasing Grade A space – and running into walls. Occupancy rates for premium offices have topped 95%, driving rents up 18% in top-tier towers such as those on Al Maryah Island and Masdar City, while Grade B offices saw a 12% lift.
This office squeeze is likely to intensify in the short term, the report said. Though new projects – including Yas Place, The Link in Masdar City, and SAAS Business Tower – are expected to come online in 2025, supply is only now catching up with a surge in demand fuelled by finance, tech, and tourism expansion.
Many occupiers have already begun eyeing purchases, with office sales recording 7% annual growth as firms look to hedge against rising lease costs, the report added.
Retail Market Shifts Towards Quality
According to the report, the capital added little new retail space in 2024, with only a few small-scale expansions, yet saw high occupancy rates and rising rents, particularly in premium malls, where rates now command between Dh4,200 and Dh6,800/sqm.
MPM also reported a 6% rise in new retail lease contract values despite a dip in renewal activity. Leasing was strongest in Q1, but slowed mid-year before recovering slightly in Q4. The trend suggests tenants are willing to pay for high-traffic, high-experience locations but are cautious elsewhere.
Logistics Demand Drives Steady Growth
Often overlooked, Abu Dhabi's industrial sector is the backbone of its growth. According to MPM Research, warehouse rents rose 15% on average in 2024, with demand highest in strategic hubs like KIZAD and ICAD. Rents in KIZAD ranged from Dh330 to Dh600 per square metre, while ICAD's higher-spec units leased for up to Dh525.
In Mussafah, warehouses offered more affordable options, from Dh235 to Dh570.
New developments and continued economic diversification are expected to keep the momentum going, the report said - Zayed International Airport broke ground on a 90,000 sqm cargo terminal, ADAFZ signed a Dh320 million deal with Radius Group for new warehousing in Al Falah, and KEZAD partnered with Azizi Developments to build 12 factories supporting real estate construction.
