The Abu Dhabi real estate market has been experiencing unprecedented growth over the past two years and is poised for a coming decade of growth and development that has never been seen before in the emirate forecasted RSP Group, the largest regionally-based real estate and hospitality investment advisory organization in the Middle East.
Speaking at the International Real Estate and Investment Show in Abu Dhabi today, RSP Group Managing Partner Blair Hagkull projected that 250,000 new housing units will be required in Abu Dhabi over the next decade to meet projected demands. The Group also identified a series of key real estate trends that have contributed to the buoyant market environment in Abu Dhabi.
“Over the past year RSP Group have worked in more than 20 Middle East and North African countries on real estate projects worth more than US $ 80 billion” said Hagkull. “This has included more than US$25 billion in the Abu Dhabi emirate alone, which has contributed to Abu Dhabi’s designation as one of the leading real estate markets in the entire Middle East, recognition that has typically only been granted to Dubai and Doha”.
“The new generation of leadership in Abu Dhabi has recognized the important role that real estate development and investment plays in a maturing economy” said Hagkull. “Now that the new real estate law has been announced local, regional and international real estate developers and investors recognize the huge potential in Abu Dhabi, not only in Abu Dhabi city but throughout the emirate.”
RSP Group’s ‘MarketWatch’ research shows that the population of the city of Abu Dhabi doubling in the next 10 years from approximately one million residents to over two million people. “There continues to be a shortage in all types of residential development with occupancies above 90% in all asset classes” said Hagkull. “This has contributed to an increase in residential rental rates between 20 and 40% over the past two years.”
The hotel and tourism sector is also an important demand driver said Hagkull. “The Abu Dhabi Tourism Authority is playing an integral role in encouraging major new private investment in the tourism sector. Not only is hotel occupancy on a 70-80% occupancy on an annual basis, the Average Daily Rate (ADR) has increased almost 30% in the past two years.”
In his presentation at the Abu Dhabi Exhibition Centre, Hagkull identified a series of key demand drivers that contribute to the growth of the real estate market. In addition to population growth, he discussed the importance of overall economic development, the planned free zones, industrial development projects including the proposed new port project at Taweelah as well as leasehold options for expatriates contributing to the positive investment climate.
Acknowledging that the freehold and leasehold projects are new in the emirate, Hagkull identified that leading private Abu Dhabi based real estate investors already have significant experience in real estate development. “Many Abu Dhabi-based developers have been amongst the first investors and builders of freehold real estate in Dubai, including prime locations like Emaar’s Dubai Marina and Nakheel’s Jumeirah Beach Residence. They know the real estate scene as well as their neighbors in the Dubai and Doha.
Hagkull also identified leading Abu Dhabi based developers like Aldar, Surouh, Al Qudra, Reem Properties, Al Rayan and others as having significant real estate experience and recognize the importance of global best practice in real estate development.
While much of the real estate development activity in Abu Dhabi has been focused around Abu Dhabi island, with projects like Reem Island, Al Raha Beach, Saadiyat and Lulu Islands attracting significant interest, Hagkull also identified other key areas in the emirate poised for heightened real estate activity. “We see key areas like Al Ain, Ghantoot and the area near the Dubai border as logical areas for future growth.”
RSP Group is the largest, regionally-based real estate investment advisory organization in the Middle East. Over the past year RSP Group has worked in 20 Middle East – North African countries on real estate and hospitality developments in excess of US $80 billion.
RSP Group’s core advisory services include Development Advisory, Project Financing, Asset Management and Fund Development and Asset Acquisitions and Disposals. RSP Group has provided strategic advisory services on many of the region’s largest and most prestigious real estate and hospitality developments. Its ‘blue chip’ client base is comprised of many of the leading international and regional banks, real estate developers, and investors throughout the Middle East.
