Abu Dhabi ready for property expansion

Rising rents and strong demand give the expansion of Abu Dhabi's real estate sector excellent fundamentals.

The population of the UAE capital is set to rise from 930,000 in 2007 to 1.3 million in 2013 and two million in 2020, according to new research from Strutt & Parker.

Since 2004 more than $130bn worth of real estate projects have been announced. And the figures provided by Strutt & Parker project huge growth in each major property segment in Abu Dhabi.

Residential units will soar from 180,000 in 2007 to 251,000 in 2013 and 411,000 in 2020. Hotel rooms will expand from 10,000 to 21,000 in 2013 and 49,500 in 2020 with tourist numbers growing from 1.8 to 4.9 million over this period.

Abu Dhabi property rents have soared in recent years due to population growth coupled with a lack of new buildings and thus rents are on average about 15% higher than those of Dubai. A report from Abu Dhabi Chamber of Commerce says some residential rents increased by as much as 140% last year and this year. In a similar fashion, a recent Colliers International Overview (Q4 2007) report current demand for residential property across all segments of Abu Dhabi’s demographic spectrum has outstripped available supply. Occupancy levels of approximately 97-98% are expected to remain consistent over the medium-term future. The population in Abu Dhabi will be doubled in ten years and about 250,000 housing units will be required.

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