How Abu Dhabi is offering an expansive portfolio of affordable communities
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How Abu Dhabi is offering an expansive portfolio of affordable communities

How Abu Dhabi is offering an expansive portfolio of affordable communities

The emirate’s sustainable communities come with high projected rental yields

Gulf Business

Rated as the most liveable destination in the Middle East both in 2020 and 2021 – by Economist Intelligence Unit’s Global Liveability Index – Abu Dhabi has been rapidly gaining popularity with local and overseas real estate investors over the past years.

The emirate’s construction sector has been aiming to meet this demand despite being hit by delays due to the Covid-19 pandemic. The sector’s recovery in 2021 saw the delivery of 7,000 units to the market, bringing the overall stock in the UAE’s capital to a whopping 273,000 units. While official data from the Department of Municipalities and Transport has not yet been released, judging by the market climate and trends, the estimated real estate sales in the fourth quarter of 2021 amounted to approximately Dhs19.8bn, increasing by about 20 per cent compared to the same period in 2020. Taking these figures into account, the full year is expected to have recorded a total number of property deals ground worth Dhs59.5bn ($16.2bn), further proving the resilience of the emirate’s property market.

That being said, with the momentum of expansion seen in the real estate sector, the annual estimated price growth in Abu Dhabi has reached about 11 per cent. Villas, in particular, have witnessed strong demand, with end users seeking more spacious homes to meet the requirements of remote working and homeschooling. Villa prices jumped 13.3 per cent year on year, while apartments registered a growth of 3.3 per cent during the first nine months of 2021, as reported by Cityscape Intelligence. Meanwhile, in terms of the sales transactions by value, the top three areas in the emirate were Al Reem Island, Saadiyat Island and Yas Island.

As a rule, local residents have dominated the emirate’s property market; however, Abu Dhabi is increasingly being seen as a highly appealing prospect for expatriates living and working here, and institutional and individual investors from overseas. This is largely due to the following factors:

01. Efficient Covid-19 measures and easing of related restrictions: It is worth noting that the UAE ranks first in the Bloomberg Covid Resilience Ranking. As of December 2021, more than 90 per cent of the country is fully vaccinated, with 100 per cent of eligible individuals taking at least a single dose. The UAE’s authorities were one of the first in the world to introduce preventive measures, including localised quarantine and airport screenings. That being said, in 2020, the UAE was the first country globally to not only reopen, but also ease Covid-19 restrictions, including conditions to cross the border between Abu Dhabi and Dubai.

02. Strong demand among foreign investors: A number of government initiatives introduced within the past five years are aimed at attracting investors from overseas to the UAE and Abu Dhabi in particular. These include long-term visas, Golden visas, 100 per cent foreign business ownership and more. In addition, Abu Dhabi boasts outstanding market access, with two major seaports, international air connectivity, Khalifa Industrial Free Zone and the region’s biggest industrial, logistics and trade integrated hub.

03. Government’s investment into infrastructure and business development: The Government of Abu Dhabi is focused on applying advanced technology to develop its non-oil sector in order to diversify its economy, reduce reliance on hydrocarbons and create jobs. That being said, Abu Dhabi National Energy Company, or Taqa, is set to invest a total of Dhs80bn ($21.7bn) in networks, power and water for the future, as well as the expansion of power capacity by 27GW by 2030. In terms of business development, the Abu Dhabi Investment Office launched a Dhs2bn ($544.4m) Innovation Programme in 2021 to support innovation led-companies and startups in the financial services, health services and biopharma, ICT and tourism sectors.04. Inflow of investors from Dubai to Abu Dhabi: While Dubai is seen as a major tourist destination, Abu Dhabi is preferred for living and working, as it has established itself as one of the most family-friendly and stable cities worldwide. The emirate was declared the safest city on the planet for the sixth time in a row, according to the Numbeo Safety Index 2022. At the same time, Abu Dhabi offers an expansive portfolio of affordable, sustainable communities, with high projected rental yields of 7 per cent, and ultra-refined island developments with premium facilities.

Evgeny Ratskevich is the CEO of Metropolitan Capital Real Estate

Taken from Property Finder’s Prestige special report in Gulf Business’ March issue

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