Occupancy levels in some Abu Dhabi residential communities are hitting record highs, with certain properties maintaining waiting lists for prospective tenants, particularly in the prime and luxury segments.
“Prime and high-end residential developments in Abu Dhabi, particularly waterfront communities such as Al Raha Beach, Saadiyat, Yas and Reem Islands, remained in high demand. Landlords in these areas enjoyed healthy occupancy rates, with some properties even having waiting lists,” real estate consultancy Asteco said in its second quarter 2024 report released on Tuesday.
Rents have been on the rise across the UAE after the Covid-19 pandemic due to the increase in population in Abu Dhabi, Dubai and other emirates.
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Abu Dhabi’s population reached 3.8 million last year, surpassing Dubai, which has become the most populated emirate in the UAE. The UAE capital’s population has seen a sharp increase of 83 per cent since 2011, resulting in a strong demand for units from new tenants.
ValuStrat revealed in the first quarter of 2024 report that the average occupancy rate among a sample of 50,000 homes stood at 80.7 per cent. However, some of the luxury properties enjoy much higher occupancy levels.
According to Asteco data, approximately 2,400 residential units were delivered in the UAE capital during Q2 2024, notably in Noya on Yas Island, Jubail Island, Masdar City, Al Raha Beach and other areas.
Meanwhile, several residential and mixed-use projects are currently in the planning stages, with anticipated public launches scheduled throughout 2024.
Another real estate consultancy CBRE said the new supply totalled 1,445 units in the first half of 2024, with 87 per cent of this stock completed in Al Maryah Island and Yas Island. During the remainder of the year, 6,791 units are scheduled for delivery, with 42.3 per cent coming in Al Sowwah and Yas Island.
Rise in mid, high-end segment rentals
The Abu Dhabi rental market recorded strong activity in the second quarter, particularly in upscale apartment and villa locations. Average apartment rents saw modest quarterly and annual increases of 1 per cent and 2 per cent, respectively. However, select areas registered more substantial growth, with quarterly increases nearing 5 per cent and annual growth reaching up to 10 per cent, Asteco said.
Villa rents maintained a steady performance, reflecting a 5 per cent increase over the past 12 months.
Mid-tier properties, especially those in the central business district and Corniche areas, also recorded slight rental increases. Comparable mid-end properties in prime investment areas like Reem and Yas Islands experienced annual growth of over 5 per cent.
Properties at the lower end of the market exhibited stability, primarily due to landlords offering attractive lease terms to entice tenants. “However, the emphasis on quality remained a driving force, contributing to overall modest rental growth. Older properties lacking modern amenities may face slight downward adjustments in rental rates,” Asteco added.