Abu Dhabi Rents Shoot Up In Q4 2013
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Abu Dhabi Rents Shoot Up In Q4 2013

Abu Dhabi Rents Shoot Up In Q4 2013

One-bedroom units in the emirate recorded the highest rise in rates as rents rose by 11 per cent in the last quarter.


Abu Dhabi’s rents rose nine per cent in the fourth quarter of 2013 and 16 per cent during the entire year, according to a report by real estate consultancy CBRE.

One-bedroom units recorded the highest rise in rates with rents jumping by 11 per cent in the last quarter alone.

Abu Dhabi’s residential rents are expected to rise further in the next 12 months as the impact of the recent rent cap removal sets in, the report said.

“Despite Abu Dhabi’s impressive return to growth, the market remains polarised in its performance, with significant variation found between the emirates key residential locations and by the age of the specific property,” said Mat Green, head of research & consultancy UAE, CBRE Middle East.

“With a large portion of the capitals housing stock now quite dated in appearance, there has been widespread tenant migration towards new developments upon completion, which in turn has resulted in sustained rental deflation for many older units.”

The report also indicated that the rental gap between properties on ‘off-island’ and ‘on-island’ locations persisted.

Apartments in off-island locations were found to be 44 per cent cheaper than those on the main island. The average annual rental rate for a two-bedroom apartment unit on an off-island location was around Dhs66,500 per annum compared to Dhs115,000 per annum for an on-island area, the report said.

“Whilst rental growth appears to be a new reality for the majority of residential tenants, the high volume of expected new supply may at least help to curb some of these inflationary pressures, although again this is likely to be location specific and dependent on the local market fundamentals,” said Green.

“Over the next three years, roughly 40,000 new residential units are forecast for delivery across the capital with close to 45 per cent to be completed on Reem Island alone.”

Green forecasted a rise in the level of residential investment activity, especially within established master plan developments in the emirate. He added that it might in turn lead to the launch of more projects in 2014 after a relatively quiet period.

The capital’s policy makers have introduced a number of measures in a bid to boost its residential market, which experienced a momentary slump between 2008 and 2012.

In 2012, Abu Dhabi issued a mandate that required all public sector workers residing outside the emirate to relocate to the emirate. The move was aimed to address heavy over supply in the market.


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