According to the most recent ValuStrat analysis, Abu Dhabi’s property market posted its highest capital gains in three years during the first quarter of 2025, despite lower sales volumes due to limited supply.
The ValuStrat Price Index (VPI) for residential properties increased 2.1% quarterly and 7.2% annually to 125.6 points, compared to a Q1 2021 baseline of 100.
Villa prices surpassed flats, rising 2.7% quarterly and 9.7% yearly to 134.7 points, while apartment prices rose 1.5% quarterly and 4.5% annually to 116.99 points.
“Abu Dhabi records strongest capital gains in three years, whilst sales volumes slow due to constrained supply,” said Haider Tuaima, Managing Director at ValuStrat.
The weighted average property value in Abu Dhabi was AED 10,226 per square metre (AED 950 per square foot), with apartments averaging AED 10,979 and villas AED 8,407 per square metre.
Saadiyat Island had the highest yearly capital gains for villas, with a 21.2% increase, followed by Al Raha at 8.2% and Mohammed Bin Zayed City at 4.7%.
Among apartments, Al Reef recorded the largest annual growth at 7.5%, followed by Saadiyat Island at 6.2% and Al Muneera Island at 5.7%.
Rental values rise sharply
Rental values also rose, with the residential rental VPI growing 2.2% quarterly and 9.0% annually to 121 points.
Apartment rents increased 3.4 percent quarterly and 11.6 percent yearly, while villa rents increased 6.3 percent annually but remained unchanged quarterly.
The average annual flat asking rent was AED 114,000, with studios priced at AED 63,000, one-bedroom units at AED 89,000, two-bedroom flats at AED 125,000 and three-bedroom homes at AED 180,000.
Villa rents averaged AED 245,000 per year, with three-bedroom properties priced at AED 180,000, four-bedroom homes at AED 244,000, and five-bedroom villas at AED 312,000.
Gross yields averaged 7.8%, with flats at 8.3% and villas at 6.7%. The anticipated average residential occupancy rate reached 88.1%.
Abu Dhabi’s residential market update
During the first quarter, Abu Dhabi finished 90 apartments and 189 villas, accounting for only 2% of the planned 13,941 residential pipeline by 2025.
Despite the low completion rate, numerous prominent developers have announced new projects. Aldar has released 72 flats and townhouses in Mamsha Gardens on Saadiyat Island.
IMKAN launched Naseem Al Jurf, a development in Ghantoot that includes 111 villas, eight apartment buildings and 60 townhouses.
Bloom Holding opened Carmona in Zayed City, and Burtville Developments opened Bab Al Qasr Resort Residences 18 and 19 in Masdar City, which has 483 units.
Taraf, in collaboration with Marriott International, has launched W Residences Abu Dhabi, a 37-story complex on Al Maryah Island.
Off-Plan Sales in Abu Dhabi Tumble 79% Annually
Sales activity demonstrated contrasting trends. Total sales volume totaled 1,301 transactions, a 42.9 percent decrease from the previous quarter.
The average sales ticket size climbed by 8.8 percent quarterly to AED 2.88 million.
Off-plan sales, which accounted for 28.5% of total sales, decreased 57.7% quarterly and 79.2% annually to 371 transactions, due to fewer project launches.
However, the average off-plan price stayed at AED 1,585 per square foot, down 8.8% quarterly but up 8.7% annually.
The typical off-plan ticket cost AED 3.56 million, a 19.2 percent increase over the previous year.
Ready property transactions totaled 930 units, a 33.6% decrease quarterly but a 13.6% increase annually.
The average ready home price reached AED 1,146 per square foot, up 5.8% annually and 7.9% quarterly. The typical ready home ticket cost AED 2.6 million, up 28.9 percent quarterly and 23.8% annually.
Mortgage transactions dominated the market, totaling 2,846 sales worth AED 9 billion, compared to 1,375 cash transactions for AED 5 billion.
Abu Dhabi office rents jump 31.8% annually
“The office market showed strong performance, with rising prices and rents amid high occupancy levels, particularly in central business districts. Retail remained resilient, supported by robust foot traffic and tenant sales. Meanwhile, the hospitality sector saw exceptional results, with occupancy and revenue metrics showing significant YoY growth, backed by strong tourism activity,” Tuaima added.
The office market performed well, with asking rents increasing by 8% quarterly and 31.8 percent annually to AED 811 per square metre.
Median asking prices rose 6% to AED 2.25 million. The average occupancy in major business areas reached 90.5%.
The office stock totaled 3.9 million square metres of gross leasable area. Aldar Properties aims to finish the HB Office Tower on Yas Island by the end of the year, while Masdar City Square will add 50,000 square meters during the second quarter.
Shopping center stock totaled 1.95 million square metres of gross leasable area. In 2024, Aldar’s retail properties had an occupancy rate of 90 percent.
Yas Mall achieved 97 percent occupancy, with a 10% increase in tenant sales and an 18% increase in footfall. My City Centre Masdar achieved 81% occupancy.
The hospitality industry produced remarkable outcomes. Hotel occupancy rose to 86.9 percent in the first two months of 2025, up 1.2 percent from the same time in 2024.
The average room rate was AED 683, up 37.1% annually, while revenue per available room was AED 594, up 38.7% annually.
Abu Dhabi expects 5.2 million visitors in 2024, a 28.7 percent increase. The emirate had 34,372 hotel keys as of February 2025, with the supply predicted to exceed 50,000 by 2030.
Mondrian Hotels will open its first UAE hotel in Downtown Abu Dhabi, while Hilton and Aldar will open Abu Dhabi’s first Waldorf Astoria on the old Anantara Eastern Mangroves site.
Industrial property asking prices increased 14.8% yearly and 1.5% quarterly.
Warehouse charges ranged between AED 152 and AED 430 per square foot, with sophisticated cold storage facilities attracting higher rates.
Annual rental rates rose by 12.3 percent at the lower end and 17.9 percent at the upper end, ranging from AED 25 to AED 54 per square foot.
AD Ports Group opened the Al Faya Dry Port between Abu Dhabi and Dubai.
Bisconni Middle East Manufacturing has inked a 50-year lease with KEZAD Group for a 37,000 square metre facility, investing AED 110 million.
AquaChemie has established a 25,804 square meter manufacturing facility in KEZAD.
The UAE economy is expected to increase by 5% to 6% by 2025, driven by technology, renewable energy, trade, financial services, and infrastructure sectors.
Abu Dhabi’s economy increased 3.8% in 2024, driven by the non-oil sector, with manufacturing accounting for 9.5% of GDP and construction for 11.3%.
The Abu Dhabi Consumer Price Index for February 2025 was 106.4 points, which is consistent with the previous year. Housing and utilities rose 2% annually to 101.9 points, the most in two years.
As of March 2025, the US Federal Reserve maintained interest rates between 4.25 percent and 4.5 percent.
Abu Dhabi’s Murban crude oil price was AED 277.1 ($75.5) per barrel in March 2025.
The UAE’s foreign commerce will hit AED 3 trillion for the first time by the end of 2024, up 14.6%.
The UAE intends to quadruple yearly foreign direct investment inflows to AED 240 billion and roughly triple overall FDI stock to AED 2.2 trillion by 2031.
