Abu Dhabi real estate: Saadiyat Island tops chart for rental yield, capital gains for Q3 2023

It has the highest annual capital gains with villa prices rising 10.3% and apartment prices 4.7% according to a ValuStrat study for Q3 2023

Saadiyat Island continued to be the most sought-after destination for buyers and tenants, outperforming all other areas in the third quarter of 2023, according to a report published by international consultant firm ValuStrat.

Saadiyat Island saw the highest annual capital gains in the capital for the quarter. Villa prices in the area rose by 10.3 percent and apartments were up 4.7 percent. Apartments in Al Reem Island, Al Muneera Island, and Al Bandar witnessed annual capital increases of 3.8 percent, 4.5 percent, and 4.4 percent respectively.

Abu Dhabi rental market: Strong performance

Rental yields were high in the capital. Annual rental values in Abu Dhabi expanded by 7 percent annually and 1.2 percent quarterly. Villas again outscored apartments as rents rose 9.6 percent annually and 2.8 percent quarterly.

Apartment rentals were up 4.7 percent YoY, but was down 0.3 percent when compared to the previous quarter. Gross yields for apartments were at 7.2 percent and 6 percent for villas.

Weighted average residential value this quarter stood at AED10,473 per sq m (AED973 per sq ft) for apartments and AED7,782 per sq m (AED723 per sq ft) for villas.

Saadiyat Island takes lead

Saadiyat Island, up 3.5 percent, saw the highest rent increase in the apartment locations monitored by ValuStrat. This was followed by Al Reef (3.2 percent), and Al Reem (2.6 percent)

On a quarterly basis, villa rents grew the highest in Saadiyat Island (up 3.2 percent), followed by Al Reef (3.1 percent), and MBZ City (2.1 percent).

Average annual apartment asking rents were AED51,300 for studios, AED74,000 for 1-bedroom, AED112,300 for 2-bed and AED163,000 for 3-beds. Average annual rents for 3-bedroom villas were AED153,400, AED225,500 for a 4-bed and AED302,800 for a 5-bed.

Residential capital value in Abu Dhabi gained 0.8 percent, while rental values were up 1.2 percent.

Villas outperforming apartments

The villa market continued to outperform apartments during the quarter. Apartment valuations remained the same as compared with the previous quarter, but prices have increased 3.3 percent annually. Villa prices were up 1.3 percent for the quarter and 5.3 percent YoY.

Median office sales price during the quarter grew by 2 percent to reach AED9,390 per sq m (AED872 per sq ft) but was down 13.6 percent compared to last year. Office asking rents in the primary commercial districts within the city declined 5.1 percent quarterly and 4.2 percent annually.

Hospitality revenue increase

There were no new hotel completions during the last three months, maintaining the city’s total stock at 34,000 hotel rooms and hotel apartments.

Department of Culture and Tourism Abu Dhabi (DCTAD) reported an overall occupancy of 73 percent (excluding Al Ain and Western Region), which was up 2 percent annually. There was a 33 percent increase in tourist numbers to 2.92 million.

The average room rate in Abu Dhabi stood at AED403 and the Revenue Per Available Room (RevPAR) reached AED292, increasing 22 percent and 24 percent respectively from last year. Domestic visitors made up 22 percent share of rooms used, followed by India with 11 percent. The UK, Egypt, and the Philippines contributed 4 percent each.

Read more: https://www.arabianbusiness.com/industries/real-estate/abu-dhabi-real-estate-saadiyat-island-tops-chart-for-rental-yield-capital-gains-for-q3-2023

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