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Why Invest in Yas Island, Abu Dhabi?

Yas Island in Abu Dhabi is one of the most popular locations for real estate investment in the United Arab Emirates. Home to world-class attractions like Ferrari World, Yas Waterworld, and numerous luxury hotels, Yas Island is often referred to as the entertainment capital of Abu Dhabi. In this article, we will look in-depth at Yas Island property and discuss why it is an attractive investment destination.

Reason Behind Investing in Yas Island

Let’s now look at some of the key reasons for investing in Yas Island in more detail:

Strategic Location

Yas Island enjoys a strategic location 20 minutes from downtown Abu Dhabi and 50 minutes from Dubai, making it easily accessible. The island has excellent connectivity to major highways and is only a 10-minute drive from Abu Dhabi International Airport. This prime location appeals to investors and tenants alike.

Steady Rental Demand

One of the primary attractions of Yas Island is its ability to generate consistent rental income for investors. This is because rental demand in Yas Island remains high throughout the year due to the following factors:

  • Tourism: Being a top entertainment and leisure destination in Abu Dhabi, Yas Island welcomes millions of tourists annually who need short-term rental accommodations.
  • Expat workforce: A sizeable expatriate population resides on the island to serve the tourism industry and work for companies in the nearby Khalifa Industrial Zone Abu Dhabi (KIZAD).
  • Students: International schools like Aldar Academy and SABIS attract students from abroad who may stay in rented apartments with families.
  • Corporate tenants: Multinational corporations leasing office space in Yas Island often house their employees in furnished residences, too.

As a result, the typical rental occupancy rates for Yas Island properties hover between 85-95%, far exceeding the UAE averages. This ensures investors earn a regular rental income stream regardless of market cycles. The current rental yield of Yas Island is also attractive. 

Property TypeAverage Price (USD)Average Monthly Rent (USD)Rental Yield (%)
Studio204,1941,2487.33%
1-Bedroom299,4841,4755.91%
2-Bedroom517,2912,7226.31%
3-Bedroom567,5433,0176.38%

Capital Appreciation Potential

Another major benefit of investing in Yas Island real estate is the strong capital appreciation witnessed over time. The return on investment at Yas Island is also better than that of most of the Dubai mainland communities. This suggests Yas Island’s future growth potential.

Apartment TypeROI
Studio7.24%
1-Bed6.40%
2-Bed6.95%
3-Bed5.51%
4-Bed8.46%

The following factors back this:

  • District development: Billions continue to be invested in new hotels, malls, parks and residential buildings, raising the overall value of the location.
  • Land scarcity: With limited vacant spaces left, further supply restrictions will increase selling prices for existing properties.
  • Demand growth: Rising local incomes, tourism volumes, and expatriate numbers have consistently increased demand for Yas Island housing.
  • Infrastructure upgrades: Ongoing highway, metro link and coastal developments improve connectivity and liveability.

Hence, historical trends and data suggest properties purchased now have decent prospects of higher resale values as Yas Island continues to evolve as one of Abu Dhabi’s premier locations.

Diverse Amenities & Facilities 

The proximity of world-class entertainment and lifestyle amenities differentiates Yas Island from other investment locations. Some key amenities include:

  • Ferrari World: The world’s largest indoor theme park dedicated to Ferrari.
  • Yas Waterworld: A stunning waterpark located on the shores of the island.
  • Yas Marina Circuit: Hosts the annual Formula 1 Etihad Airways Abu Dhabi Grand Prix.
  • Cinemas & shopping: Multiplex cinemas and the Mall at Yas Island for retail therapy.
  • Beaches & parks: Pristine beaches and landscaped gardens for recreation.
  • Luxury hotels: Properties like W Abu Dhabi and Park Hyatt Abu Dhabi enhance prestige.

Having instant access to these facilities raises Yas Island’s brand value while adding new attractions to investor confidence.

Yas Island offers many facilities.  Here are some key living facilities on Yas Island. 

Hotels on Yas Island:

  • W Abu Dhabi – 5-star resort and architectural landmark, located minutes from attractions, offering 499 suites.
  • Yas Island Rotana
  • Radisson Blu Hotel
  • Park Inn by Radisson Abu Dhabi
  • Centro Yas Island

Supermarkets:

  • Carrefour in Yas Mall – Large supermarket well-stocked with organic produce and essentials.
  • Smaller Zoom stores and local groceries spread around the island.

Places of Worship:

  • Mosques: ADNOC Mosque, West Yas Mosque, Yas Mall Mosque
  • Churches: St Joseph’s Church, St Paul’s Church
  • Hindu temple under construction (BAPS Shri Swaminarayan Mandir Temple)

Schools:

  • Sabis International School (K-12)
  • Aldar Academy (American curriculum until Year 12)
  • Yellow Submarine Nursery

Medical Facilities:

  • Medeor Medical Centre in Yas Mall
  • Burjeel, NMC, Cleveland Clinic hospitals
  • Mediclinic in Khalifa City A, Al Noor hospital

Shopping, Dining, Nightlife:

  • Yas Mall – Large shopping center with retailers, food court
  • Restaurants: Texas Roadhouse, Galito’s, P.F. Chang’s, Black Tap
  • Bars/Clubs: Cipriani, Aquarium, Stars n Bars

Freehold Property Rights

An important advantage of Yas Island as an investment location is that properties can be purchased on a freehold basis, unlike some other areas under leasehold models.

Under freehold property in Yas Island, foreign nationals have unfettered ownership rights over the purchased property and land area. They can freely sell, lease, or bequeath the asset without restrictions. They also enjoy hassle-free financing options from banks.

This provides greater ownership security and peace of mind to international property investors versus locations with lease caps on ownership or usage periods. It makes Yas Island real estate a more versatile long-term investment class.

Tax Benefits

A key driver for Yas Island’s popularity is that it allows investors to benefit fully from the UAE’s tax-friendly investment environment. Some key tax benefits include:

  • No capital gains tax: Profits from selling properties are not taxed, enhancing investment returns.
  • No personal income tax: Rental income received is treated as tax-free, improving cash flows.
  • No corporation tax: Companies leasing spaces in business parks are exempt from tax outgoings.
  • No inheritance tax: Properties can be passed down generations without any deduction of taxes.

This makes post-tax returns considerably higher than many international investment destinations. It is a notable advantage of the UAE market for long-term wealth creation.

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Best Types of Properties to Consider

Given its demand drivers, some property types in Yas Island tend to deliver better risk-adjusted returns for investors versus others. Let’s look at the most suitable options:

Luxury Apartments

Luxury apartments within prominent developments like Yas Acres, Marsa Al Arab and Ansam are well-suited for investment. Located near amenities, they see strong leasing demand from affluent, long-staying tenants like corporate professionals. This ensures higher and more stable occupancy/rental rates throughout market cycles.

Well-managed buildings with quality finishes also carry lower maintenance costs, allowing a larger proportion of rental income to translate into returns. Solid appreciation is common over the long run as well, given the finite land supply.

Villas & Townhouses

Low-rise freehold housing options in Yas Island, like villas and townhouses, find favor with expatriate families, given their internal amenities and spacious private spaces. A 2-3 bedroom layout typically fetches a higher rental premium than apartments.

Targeting long-term leases with multinational employees translates to dependable rental incomes and occupancy. The land scarcity factor maintains high resale values. While initial capital outlay is greater, leverage and depreciation benefits enhance profitability for buy-and-hold investors.

Retail/Commercial Spaces

Well-located retail units within mixed-use developments servicing a captive customer base see good occupancy all year round as tenants benefit from consistent walk-in traffic. Popular zones like Yas Mall and businesses lining the Waterfront retain their value.

Meanwhile, grade-A offices leased to reputed multinationals provide stability through long lease periods. Rental escalations offset inflation while capitalisation rates remain attractive.

Freehold Land Banks

In a decade when Yas Island’s footprint is likely to multiply manifolds, banking on vacant land parcels close to upcoming infrastructure carries the potential for multifold returns. Proximity to rail/road links or prime seaside locations fetch higher future prices upon development permits.

Investors can consider entering joint ventures and service land before on-selling at premiums or developing independent projects for long-term holds appreciating. Substantial capital gains are achievable.

Hence, while all types generate stable income, factoring location, infrastructure timelines, and individual risk profiles help choose the best-suited investment property type.

Yas Island vs. Dubai Mainland

Compared to mainstream Dubai areas, Yas Island offers much better prospects currently:

  • Higher average rental yields of 6-8% against 4-6% in Dubai
  • Stronger capital appreciation around 4-8% yearly vs 2-5% in Dubai
  • Added benefits of freehold ownership and secure family visas

However, Dubai still holds the edge regarding lower investment costs and prices. For investors prioritizing returns over price points, Yas Island delivers better performance. The island also balances lifestyle perks and entertainment options unavailable in most Dubai areas.

Key Market Performance Metrics

Let’s evaluate some key metrics on how the Yas Island real estate market has been performing over the past few years:

  • Rental Yields: Average gross rental yields for Yas Island luxury apartments hover between 4-6%, above the nationwide average of 3-4%. Prime freehold properties command even higher yields of 6-8%.
  • Capital Appreciation: Property prices have risen by 8.1% over the last year, depending on the area within Yas Island. Premium locations saw higher capital appreciation.
  • Occupancy Rates: Average occupancy rates for Yas Island rentals are consistently over 85%, touching 95% during peak seasons thanks to robust demand drivers.
  • Sales Volumes: Knight Frank data shows annual property sales on Yas Island increased from AED 4 billion in 2018 to over AED 8 billion in 2021, underlining resilient investor interest.
  • Rental Rates: Yas Island rates have been steadily increasing at a compound annual growth rate of 8-12%, as per consulting firms like Valustrat, outperforming other UAE locations.

The consistently improving performance metrics highlight Yas Island’s attractiveness to owners and investors. Its diversity of tenants also reduces volatility compared to other concentration-risk areas. Overall, fundamentals remain bullish for the years ahead.

Current Market Trends

Let’s examine some of the notable current trends in Yas Island’s real estate sector:

Increased Investor Interest

Post-pandemic, global investor interest in Yas Island properties is rising significantly due to the UAE’s successful crisis handling. Geopolitical risks elsewhere are driving more safe-haven demand towards the stable Emirate.

Price Appreciation

According to Asteco, residential values appreciated 8-10% YoY in 2023, and similar growth is expected over the next 3 years. Luxury segments outperform amid high-income growth and weakened supply.

Rental Gain Momentum

CoStar reports Yas Island rents rose 6.22% in 2023, with 4-5% projected for 2024, outpacing other UAE areas. Upscaling tourism infrastructure and Abu Dhabi Vision 2030 are supporting demand.

Focus on Greener Developments

New projects incorporate environmentally friendly design elements in line with the UAE Net Zero Carbon ambitions to attract conscious investors and residents.

Technology and Startup Growth

Khalifa Industrial Zone Abu Dhabi (KIZAD) clusters and Masdar drive a startup ecosystem, supporting talent inflows and office occupancies in Yas Island hubs.

Overall, favourable supply-demand dynamics, economic diversification programs and enhanced connectivity aid positive market trends.

Key Growth Drivers

A closer examination of Yas Island’s performance highlights certain key growth drivers propelling its real estate sector higher:

  • Tourism Vision 2030: Targets to double visitor arrivals through expanded attractions, events and services.
  • Yas Creative Hub: spanning over 2.9 sq .m million, It offers 800+ affordable units to boost the arts & design community.
  • Tech Expansion: KIZAD and Masdar City are magnets for startups and innovation teams under the digital economy agenda.
  • Infrastructure Upgrades: From the airport expansion to coastal developments, connectivity multiplies the island’s reach.
  • Population Growth: Approvals for ‘Golden Visas’ and long-term residency schemes enlarge the talent pool.

With strong government backing and synergistic industry clusters, Yas Island is well-positioned to steadily attract demand as Abu Dhabi transitions into a globally competitive economy.

Low-Risk Outlook

All signs point towards Yas Island possessing a highly favorable long-term outlook. 

Let’s assess the sustainability of growth:

  • Stable Economy: The oil-backed economy is increasingly knowledge-driven, with sovereign wealth hedging external shocks.
  • Well-regulated Market: Effective real estate laws shield investors while RERA protects buyers and tenants.
  • Self-sufficient clusters: Tourism and industrial hubs minimise dependency on any single sector for revenues.
  • Expanding Infrastructure: Ongoing developments ensure superior connectivity and foster new business ecosystems.
  • Robust Demand: An attractive demographic structure accompanied by tourism progression underpins rental take-up.

Given ongoing strategic initiatives, low geopolitical risks and Vision 2030’s prosperous targets, Yas Island’s future growth potential is in a steady pathway.

Best Property Investment Options In Yas Island

Based on the analysis, here are some of the most suitable investment options in Yas Island for different investor profiles:

Yas Park Gate at Yas Island

Yas Park Gate is a townhouse community offers 3 and 4 bedroom townhouses within Yas Island. Townhouses are priced from AED 1,739,000 and come with private gardens and roof terraces. Amenities include a pool, gym, playground and landscaped gardens. The project is close to Formula 1 track and Yas Waterworld

Gardenia Bay By Aldar at Yas Island 

Gardenia Bay features contemporary designed 1, 2 and 3 bedroom apartments located close to the main boulevard of Yas Island. Apartments are priced from AED 805,000 and come with open plan layouts and balcony views. The project offers resort style amenities such as outdoor pool, gym and recreational deck.

Aldar Selina Bay at Yas Island

This is an apartment project located in Yas Island. Selina Bay offers modern 1, 2 and 3 bedroom apartments starting from AED 960,000. The apartments come with fitted wardrobes, fully fitted kitchens and modern finishes. Amenities include a gym, swimming pool, kids pool and recreational areas. 

Reportage Perla Waves at Yas Island  

Perla Waves features 1, 2 and 3 bedroom luxury apartments close to the waterfront of Yas Island. Apartments are priced from AED 1,500,000 and come with sea facing views. Residents have access to beach club, infinity pool, spa and sporting facilities. It is located opposite Yas Marina Circuit

Reportage Perla Prime at Yas Island

Perla Prime is a mixed use project offers 1 to 3 bedroom apartments as well as townhouses. Properties are priced from AED 1,500,000. Apartments come with views of the waterfront and townhouses have private pools. Amenities include beach club, swimming pools, gym and kids club

Costs of Buying Property in Yas Island

Before investing, it’s essential to understand the average costs associated with buying and maintaining a property in Yas Island:

Buying Costs

  • Stamp Duty: 4% of property value
  • Registration Fees: 4-5% of property value
  • Agent Commission: 2-3% of property value
  • Mortgage Down Payment: 20-30% of property value
  • Transfer Fees: 1-2% of property value

Recurring Expenses

  • Maintenance: 1-2% of property value annually
  • Service Charges: AED 1,000-3,000 per quarter
  • Insurance: 0.15-0.3% of property value annually
  • Property Management: 5-10% of annual rental income
  • Rent Guarantee Fees: 10-12 months rental value

Ownership Costs

  • Municipality Fees: Approx. AED 1,500 annually
  • Strata Fees: AED 500-1,500 quarterly
  • Utilities: Based on actual consumption
  • Renovations Fund: 1-2% of rental income annually

So for an AED 2 million 2-bedroom apartment, the total purchase costs come to AED 200,000 as stamp duty alone. Additional ongoing costs, including management and maintenance, are 1-2 % of property value annually.

Always budget 10-15% of the purchase price for costs to avoid unwarranted surprises post-acquisition. Working with property professionals ensures compliance with regulations.

Process of Buying Property in Yas Island

Let’s summarize the step-by-step process involved in acquiring real estate on Yas Island:

  1. Consult reputed agents and view listings as per budget and requirements
  2. Review payment plan handover timeline if off-plan property
  3. Select the property and submit the booking amount
  4. Apply for a mortgage from local banks if required
  5. Sign the sale purchase agreement and pay a booking fee
  6. Pay stamp duty and registration fees
  7. Receive handover completion certificate
  8. Register property ownership at the Land Department
  9. Apply for title deed and utility connections
  10. Procure home insurance and join community association
  11. Consider hiring a property manager for leasing and maintenance

The typical timeline is 2-3 months to complete a secondary market purchase. For new projects, allow 9-24 months from booking to physical possession. Engage lawyers to vet agreements and navigate processes professionally.

The Bottom Line: Is Yas Island a Good Investment?

In short, Yas Island is undoubtedly a solid real estate investment with excellent infrastructure, high-profile attractions and entertainment options. Though costs are higher, properties here generate some of the best returns in Abu Dhabi while offering visa benefits and lifestyle perks.

Yas Island represents a lucrative investment choice for savvy investors focused on rental income and consistent capital growth, outperforming other mainstream areas. The island is set for tremendous growth ahead because of the tourism appeal, strategic location and significant upcoming projects.

Frequently Asked Questions

Is Yas Island a freehold area?

Yes, Yas Island permits freehold ownership for expats unlike mainland Abu Dhabi areas. 

What is the average rental yield for properties in Yas Island?

Rental yields range from 5-8% based on property type, higher than many Dubai and Abu Dhabi areas.

What are the popular areas to buy property within Yas Island?

Water’s Edge, Ansam, Mayan, West Yas and Yas Acres are top residential areas.

What are the major upcoming attractions and projects in Yas Island?

SeaWorld Abu Dhabi, Warner Bros World expansion, Etihad Arena concerts and Gesr phase 2 community are key projects underway.

What is the process of buying property as a foreigner in Yas Island?

Key steps are finding a property, reserving with booking amount, signing agreements, registering ownership and getting title deeds.

What are the recurring expenses in owning a Yas Island property?

Typical ongoing costs are 1-2% of property value for annual maintenance and AED 500-1,500 per quarter for strata fees.

Is Yas Island a good area for buy-to-let investments?

With its high yields, consistent demand and future growth, Yas Island is an excellent option for buy-to-let investors.

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