Abu Dhabi’s commercial real estate is witnessing an increasing surge in demand and rental prices, which will continue to be at their most vital for the quarter due to new private and business investments, according to a new report from Asteco. Grade A offices recorded a significant increase in rent during the second three months of 2024, with 10% year-over-year growth in prime locations, while new leases rose by 3% to 8% compared with the previous quarter.
The surge is mainly attributed to its very strong economic fundamentals, which have been propelled by proactive government initiatives. There is also increasing interest from overseas investors, notably billionaires and HNWIs. Egypt’s richest man, Nassef Sawiris, declared last December that he would relocate his family office to Abu Dhabi because it is increasingly becoming attractive for business and investment.
It is expected that the UAE will notch up a record net inflow of 6,700 migrating millionaires in 2024 from markets like India, the broader Middle East, Russia, Africa, the UK, and other parts of Europe. There will be an increased inflow of high-net-worth individuals in 2024, adding to existing demand for high-end residential and commercial properties—prerequisite grade-A office spaces.
According to Asteco’s report, Grade A offices within new developments and prime locations are in high demand and, hence, are facing the largest rental increase. This is likely to continue as Abu Dhabi continues to stamp its mark as one of the major business and investment destinations, increasingly attracting private and corporate investors eyeing its growth potential.
In summary, Abu Dhabi’s commercial real estate is doing quite well based on constant inflows. It represents the solid economic fundamentals and proactive government initiatives the place has to offer as an increasingly attractive destination for high-net-worth individuals in a way that demand for grade-A office spaces will constantly remain strong, further fueling rental prices upwards and cementing its leadership position as a business and investment hub in the region
