Abu Dhabi’s real estate landscape witnessed significant growth in the fourth quarter of 2023, with office sales prices soaring by 38.7% year over year, as reported by ValuStrat. Additionally, asking rents experienced a notable increase of 13.3%, signaling a robust market performance in the capital city.

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ValuStrat’s latest report on Abu Dhabi real estate highlights Aldar Properties’ achievement of 97% occupancy across its prime Grade A commercial properties during Q4 2023. This includes its prestigious buildings at Abu Dhabi Global Market (ADGM), HQ, and International Tower, underscoring the strong demand for high-quality office spaces in the emirate.

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The report attributes the market’s high growth trajectory to the increasing demand for Grade A office spaces, buoyed by government initiatives such as retiree visas and remote work programs aimed at attracting foreign professionals and investors to Abu Dhabi. These initiatives are expected to further bolster the market in the coming years.

Looking ahead to 2024, ValuStrat anticipates stable apartment prices and moderate increases in freehold villa prices in Abu Dhabi. The real estate market is projected to grow steadily, with residential capital values expected to see a 3%–5% increase.

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While mortgage rates are forecasted to decline in 2024, potentially boosting transactional activity, off-plan transactions may slow down. The report notes a 6.4% year-over-year increase in rental values and a 4.2% year-over-year increase in residential capital values in Q4 2023.

ValuStrat also predicts an improvement in key performance indicators for the hospitality sector, with occupancy rates rising by 3% year over year from January to October 2023, reaching 74%. Revenue per available room surged by 26% to AED 309, while the average daily rate increased to AED 420 ($114.36), marking a 23% year-over-year increase.

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In summary, ValuStrat’s report paints a promising picture for Abu Dhabi’s real estate market, with strong growth indicators across various segments. The capital city continues to attract investors and residents alike, driven by its strategic initiatives and favorable market conditions.