Abu Dhabi’s real estate market records broad-based growth in first quarter

Abu Dhabi’s real estate market recorded steady and broad-based growth in the first quarter of 2025, with gains across residential, office, retail and hospitality segments, according to ValuStrat’s latest market review.

In the rental segment, average prices increased by 2.2% in the first quarter and 9% year-on-year. In Abu Dhabi City, the average annual asking rent for apartments reached Dh114,000. Studio apartments were priced at an average of Dh63,000, one-bedroom units at Dh89,000, two-bedroom units at Dh125,000, and three-bedroom units at Dh180,000.

The authors attributed the rise in residential capital values to a combination of sustained demand from domestic buyers, confidence of investors, and limited new housing supply.

Saadiyat Island continues to dominate Abu Dhabi’s villa market, recording an impressive 21.2% annual increase in capital values – well ahead of Al Raha’s 8.2% and Mohammed Bin Zayed City’s 4.7%. More modest gains were seen in Al Reef, where villa prices edged up by 2%, while values in Hydra Village held steady over the year.

In the apartment segment, Al Reef outpaced other communities with annual gains of 7.5%, followed by Saadiyat Island at 6.2% and Al Muneera Island at 5.7%.

Rental growth has also gathered pace, with average apartment rents in Abu Dhabi City rising by 2.2% in the first quarter and 9% year-on-year. The average asking rent for apartments now stands at Dh114,000 annually, with studios averaging Dh63,000, one-bedroom flats at Dh89,000, two-bedroom units at Dh125,000, and three-bedroom units reaching Dh180,000.

Offices

Abu Dhabi’s office market remained resilient amid high occupancy and rental growth. Asking prices for office units climbed 6% in Q1 to Dh2.25 million, while rents in core commercial districts jumped 8% in Q1 and 31.8% year-on-year. Occupancy in these areas reached over 90%.

Total office supply in Abu Dhabi has reached 3.9 million m2 of Gross Leasable Area (GLA), with several new offices planned for delivery this year, including the HB Office Tower on Yas Island and Masdar City Square, the latter set to contribute 50,000 m2 of new space in Q2 2025.

Retail

The retail segment continued to benefit from strong footfall and tenant sales. In Q1 2025, shopping centre stock totalled 1.95 million m2 of GLA in Q1 of 2025.

The ValuStrat report singled out one major addition that will add to volume this year – the redevelopment and expansion of Al Jimi Mall, which will bring its total built-up area to 91,000 m2.

“The retail segment remained resilient, supported by robust foot traffic and tenant sales,” noted Haider Tuaima, Managing Director & Head of Real Estate Research at ValuStrat.

Hospitality

Rounding off the analysis, ValuStrat said that the hospitality sector posted impressive growth in the first quarter of 2025, buoyed by tourism. Hotel occupancy in Abu Dhabi averaged 86.9% in the first two months of 2025, a 1.2% increase year-on-year. The city welcomed 800,000 hotel guests by February, with 5.2 million visitors in total during 2024 – a 28.7% annual rise.

As it stands, Abu Dhabi has a total of 34,372 keys, with that supply forecasted to exceed 50,000 keys by 2030.