Abu Dhabi real estate gaining popularity among global HNWIs: Knight Frank

Global property consultancy Knight Frank’s 2023 Destination Dubai report has revealed that Abu Dhabi has emerged as the second most popular real estate investment destination for global high-net-worth individuals (HNWIs) behind Dubai.

According to the report’s findings, 21 per cent of the respondents identified the UAE’s capital as their most preferred property acquisition destination in the UAE. Dubai topped the list (with 67 per cent of HNWIs preferring the emirate) and Ras Al Khaimah rated third (with 5 per cent selecting the northern emirate).

Faisal Durrani, head of Middle East Research, Knight Frank, says: “Abu Dhabi as a destination has been slowly rising in global prominence, particularly as large-scale cultural and entertainment projects such as the Louvre, Qasr Al Wattan, Ferrari World, Sea World and the Warner Bros Theme Park start to capture the attention of global travellers. And it’s paying off, with 45 per cent of global HNWIs indicating that the emirate’s development plans are positively influencing their view of the emirate as an investment destination.

“Moving further up the wealth spectrum reveals that those with a net worth in excess of $10m view Abu Dhabi even more favourably as a result, with 57 per cent of this cohort keen on investing in the city. Among East Asian HNWI, the figure rises further to 70per cent, according to our survey.”

Popular areas in Abu Dhabi

Amongst them, a whopping 89 per cent have expressed interest in investing, notably in the residential sector. Meanwhile, luxury residential properties such as those on Saadiyat Island have begun attracting the attention of the international elite, due in large part to highly competitive prices when compared with other high-end locations such as Dubai’s Palm Jumeirah.

Durrani continues: “When it comes to committing to a real estate investment in Abu Dhabi, 74 per cent are interested in exploring investment options, but the challenge, as has been the case historically has been to convert this interest into transactions.

“One of the most fascinating findings has been the influence Dubai has on the perceptions of Abu Dhabi in the minds of HNWI around the world. The appetite of frequent visitors to Dubai to purchase real estate in Abu Dhabi stands at 73 per cent, 50 per cent of are willing to allocate over $2m for a property in Abu Dhabi, with the average allocated budget being $3.7m.

“Clearly, there remains an opportunity to capitalise on this positive familiarity through perhaps more aggressive campaigns in Dubai, or indeed through the entry into the Dubai market to build greater credibility, similar to Aldar’s recent JV announcement with Dubai Holding for 9,000 homes in Dubai’s suburbs.”

Adding onto that, Shehzad Jamal, partner – StratCon, Healthcare, Education & Real Estate, said: “Abu Dhabi is quickly becoming a global destination for HNWIs looking to invest in real estate. The emirate’s strong economy, stable political environment, and world-class infrastructure are all major factors driving this interest. In addition, Abu Dhabi’s cultural attractions, such as the Louvre Abu Dhabi and the upcoming Zayed National Museum, are also appealing to HNWI. We expect to see this trend continue in the years to come, as Abu Dhabi becomes an even more attractive place to live, work, and invest.”

Ras Al Khaimah on the rise

Knight Frank’s destination Dubai research report also highlighted how HNWIs around the world perceive Ras Al Khaimah’s potential.

While the upcoming Wynn Resort and the adjoining 18,500 sqm casino on Al Marjan Island, set to open in 2027, 30 per cent of respondents surveyed in the report said the casino would enhance their likelihood to invest in RAK property. Notably, this figure jumped to 60 per cent among East Asian respondents, emphasising the region’s growing interest in UAE’s investment opportunities.

Durrani said: “Ras Al Khaimah has been quietly transforming itself over the last 10-15 years as an alternative tourist hub to Dubai and part of this plan involves the now under construction 1,500 room Wynn hotel and responsible gaming resort. Interestingly, 55 per cent of global HNWIs say the emergence of a gaming resort in Ras Al Khaimah does not influence their perceptions of the emirate as a place to invest, but 30 per cent say it makes it more attractive. For those with a net worth of over $10m, this rises to 50 per cent and amongst East Asian HNWIs, 60 per cent are more keen on Ras Al Khaimah as a property purchase destination directly as a result of Wynn’s development on Al Marjan Island.”