Real Estate

Savills Middle East Reports High Demand, Rising Rental Rates, and New Developments

According to the latest Abu Dhabi Commercial Property Market Report by Savills Middle East, the Abu Dhabi commercial real estate market demonstrated steady growth in 2024, driven by regulatory reforms, rising demand, and infrastructure expansion. The office and industrial sectors recorded significant rental increases and high occupancy rates, highlighting the emirate’s continued economic momentum.

Strong Demand for Office Spaces

• The number of economic licenses issued on the mainland increased by 16% in 2024, while those in non-financial free zones grew by 22%.

• Regulatory changes by ADDED now allow companies from other emirates and free zones to open branches in Abu Dhabi without requiring a physical office in the first year, boosting business activity.

• Grade A office spaces remain in high demand, with full occupancy at International Tower, Daman House, and Baniyas Tower. Abu Dhabi Global Market (ADGM) offices reached 97% occupancy, with 2,088 operational entities, including 231 financial firms—a 31% year-on-year increase.

Office Rental Growth

• Grade A office rents in the CBD and Outer CBD submarkets rose 8% year-on-year in Q4 2024.

• Key rental growth rates:

  • Capital Gate Tower: +14%

  • Addax Tower: +13%

  • ADGM offices: +12%, with rental rates ranging between AED 2,600–AED 2,900 per sq m per annum.

"Occupier demand in Abu Dhabi remains strong, particularly in financial services, consulting, and technology. The combination of regulatory reforms and infrastructure expansion is further driving interest in the emirate," said Stephen Forbes, Head of Abu Dhabi, Savills Middle East.

Industrial Sector Sees Surge in Demand and Rents

• Average industrial rents increased by 25% year-on-year, led by demand from third-party logistics (3PL), e-commerce, and retail operators.

• Submarket highlights:

  • KEZAD rents surged by 38%.

  • Mussafah, ICAD, and KEZAD all recorded rents exceeding AED 500 per sq m per annum.

• Major industrial investments:

  • Mubadala and Aldar’s AED 5 billion industrial and logistics park.

  • ADAFZ and Radius’s AED 320 million warehouse facility, adding 90,000 sq m by Q4 2026.

  • KEZAD’s new 250,000 sq m development is set for completion in Q4 2025.

Looking Ahead: New Office Supply in 2025

More than 100,000 sq m of office space is set to be delivered in 2025, including:

• Masdar City Square

• Yas Place, which has already recorded strong pre-commitments

Savills Middle East expects demand for high-quality office and industrial spaces to remain firm, despite increased supply, reinforcing Abu Dhabi’s position as a leading commercial hub.

• Tags
• #Business
• #Magazine
• #Lifestyle