Today's Edition
MAYS IBRAHIM (ABU DHABI)
Despite growing global economic uncertainty driven by trade battles, the UAE’s real estate markets have recorded strong performances in the first quarter of 2025, according to CBRE’s recent UAE Real Estate Market Review.
“Abu Dhabi’s office market continues to benefit from a strong non-oil sector and continued government investments, which is supporting growth in new business licences and demand for commercial spaces across the emirate,” the report stated.
The emirate’s non-oil sector expanded by 6.2% in 2024, while foreign non-oil trade surged 9% year-on-year to Dh306 billion, supported by a 16% increase in non-oil exports and an 11% rise in re-exports.
This growth has fuelled continued demand for prime office space, especially in ADGM Square and Al Maryah Tower, both now fully occupied, according to the report.
Overall office occupancy reached an average of 96% in the CBRE basket, while rental rates climbed 13% year-on-year.
Prime rents increased nearly 15% amid limited availability of quality space, while lease renewals were up 9% quarter-on-quarter.
Residential sales in Abu Dhabi fell 31% year-on-year in Q1 2025, largely due to a 46% decline in off-plan transactions.
“Meanwhile, ready transactions have increased by around 10%, as more investors have looked to purchase completed properties for their own occupation and yield generation,” the report noted.
“This is viewed positively, in terms of the long-term health of the market, reflecting rising demand from end-users and long-term investors.”
Property values continued to rise, with apartment prices growing 12% and villa prices increasing 13% over the past year.
Rents also surged, with average apartment rents up 13%, while villa rentals rose 4%, the report added.
Approximately 40,000 new units are expected to be delivered over the next three years, including 15,000 in 2025 alone, with key launches like Mandarin Oriental Residences and Mamsha Gardens underway.
The report revealed that the UAE’s hospitality sector has shown strong growth, with tourism contributing around 12% to the national economy.
In Abu Dhabi, hotel revenue jumped 18% year-on-year to Dh2.3 billion, with ADR and RevPAR up 25%.
Occupancy averaged 79% across the emirate, and 82% in the city.
Dubai welcomed 5.31 million international visitors in the first two months of 2025, marking a 4% increase.
Average hotel occupancy stood at 81.5%, and the average daily rate (ADR) rose 2% to Dh647.
Ras Al Khaimah also recorded strong growth, with nearly 730,000 guest nights and longer stays boosting performance metrics.
The UAE’s industrial market continues to attract increasing interest from new investors and developers, with a positive macro-landscape and strong sector fundamentals creating an increasingly compelling story.
The report said that the UAE’s industrial market continues to draw growing interest from investors and developers, driven by strong sector fundamentals and a supportive macroeconomic environment that highlight its rising potential.
“This is reflected in the strong upward rental trends across all locations, with solid occupier demand supporting increasingly aggressive actions of the country’s industrial landlords.”
“This is being supported by an increasingly diversified non-oil economy, and rising trade,” the report added.
The UAE’s industrial sector remains one of the most dynamic parts of the economy.
Five new Comprehensive Economic Partnership Agreements (CEPAs) were signed in Q1 2025 with Malaysia, New Zealand, Kenya, Ukraine, and the Central African Republic, bringing the total to 26.
This trade expansion has supported strong rent increases, with Dubai’s warehouse rents up over 20% and Abu Dhabi’s up 14%, driven by growth in KEZAD.
