The fourth quarter 2019 Abu Dhabi real estate review issued by leading local consulting firm ValuStrat – reported that Abu Dhabi’s residential capital values were 11% lower than last year and 2.6% than the previous quarter. Residential rental values softened at a slower rate of 9.3% annually.
The valuation based ValuStrat Price Index (VPI) for capital values in Abu Dhabi’s residential investment zones for the fourth quarter 2019, declined 2.6% quarterly to 69.1 points. Annually, capital values were 11% lower than the fourth quarter 2018.
The weighted average residential value in Q4 2019 was AED 9,246 per sq m (AED 859 per sq ft), apartments stood at AED 10,236 per sq m (AED 951 per sq ft), and villas at AED 6,910 per sq m (AED 642 per sq ft).
Ready properties in Al Reem Island, Al Muneera, Al Reef and Hydra Village saw double digit declines in capital values since Q4 2018.
Locations that were more resistant to downward pressure, with capital values declining annually in single digit percentages, were apartments in Saadiyat Island and Al Bandar, as well as villas in Mohamed Bin Zayed City and Al Raha. The fourth quarter VPI – Residential Rental Values declined 3.1% quarterly and 9.3% annually to 71.5 points. Abu Dhabi’s gross yields averaged 7.6%, with apartments at 7.9% and villas at 6.8%.
“…Exception to the citywide softening of the rental market, green shoots were observed in Al Reef, Al Reem, and Saadiyat Island, were asking rents were up to 2.1% higher than the previous quarter…” said Haider Tuaima, Head of Real Estate Research at ValuStrat.
As far as residential supply was concerned, Abu Dhabi City had an estimated 237,864 residential homes stock as of 2019. A total of 3,878 residential units were confirmed to have been completed, 2,795 apartments and 1,083 villas/townhouses, as total completions represented 62% of the projected residential supply estimated at the start of 2019.
“…Slowing price declines in some districts, and a continued appetite for well-priced quality new home builds from reputable developers, are encouraging signs for the residential property market in the capital at this point in the property cycle…” said Declan King MRICS, Managing Director & Group Head of Real Estate at ValuStrat.
An estimated 104,369 sq m (1.12 million sq ft) of office Gross Leasable Area (GLA) was confirmed as completed during 2019, bringing the total GLA in Abu Dhabi city to 3.69 million sq m (39 million sq ft).
Office asking rents in primary commercial districts fell 1.1% since Q3 2019, and 10.2% annually. The average citywide asking rent for offices sized between 93 sq m (1,000 sq ft) to 186 sq m (2,000 sq ft) fell to AED 829 per sq m (AED 77 per sq ft).
Abu Dhabi City had a total stock of 29,300 keys within a mix of 138 hospitality establishments. Total international hotel guests in Abu Dhabi City YTD September 2019 grew 2.2% and stood at 3,334,758. The Average occupancy rate reached 73%, up 1.1% YoY. The Average Room Rate (ARR) and Revenue Per Available Room (RevPAR) jumped 7.4% YoY to AED 343 and 8.5% YoY to AED 249, respectively.
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About ValuStrat
ValuStrat is a leading consulting firm headquartered in Dubai providing Advisory, Valuations, Research, Industrial Consulting and Due Diligence services across a diverse range of industry sectors since 1977. Offices in the UAE, UK, Saudi Arabia and Qatar serve over 1,000 corporate clients in the Middle East. Client base includes financial institutions, local corporates, multinationals, governments, SMEs, family businesses and start-ups. Some of the key sectors serviced by ValuStrat’s consulting team include real estate, hospitality, healthcare, education, manufacturing, retail, entertainment, transport and FMCG. ValuStrat is a Royal Institution of Chartered Surveyors (RICS) Regulated Firm and the first company head quartered in all of MENA and Asia to be accepted into the prestigious RICS Tech Affiliate program.
About the ValuStrat Price Indices
The ValuStrat Price Index for Abu Dhabi’s residential capital values is a valuation-based index constructed to represent the quarterly price change experienced by typical residential units within Abu Dhabi City. The ValuStrat Price Index for Abu Dhabi’s residential rental values is constructed to represent the quarterly rental change experienced by typical residential units within Abu Dhabi City. The VPI applies weighted averages using data samples representing more than 90% of all property types across the city’s investment zones and is built by our expert RICS Registered Valuers.
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