The capital values of villas and apartments in Abu Dhabi rose to their highest level in five years in the fourth quarter of 2021, underpinned by a broader recovery in the UAE economy, according to property consultancy ValuStrat.
The ValuStrat Price Index (VPI) for Abu Dhabi, which monitored five villa communities and five apartment areas in the emirate, jumped 11 per cent on an annual basis to 70.2 points in December. On a quarterly basis, it grew 2.1 per cent.
VPI is a valuation-based index that tracks the change in capital values for a representative fixed basket of properties.
Although Abu Dhabi's residential capital values outperformed 2019 figures by 1.7 per cent, prices are still 29.8 per cent below 2016 levels, according to ValuStrat.
For villas, the highest annual capital gains were recorded in Al Reef (13.5 per cent), Saadiyat Island (13.5 per cent) and Al Raha (12.9 per cent), the consultancy said.
The top performers in the apartment category were located on Al Reem Island (10.4 per cent), Al Muneera Island (9.8 per cent) and Al Bandar (8.4 per cent).
The property market in the UAE, the second-biggest Arab economy, has made a strong recovery from the coronavirus-induced slowdown as the country’s economy benefits from a number of business and social reforms.
Pent-up demand and improved investor sentiment have also helped to drive property sales, particularly in Dubai and Abu Dhabi, amid the pick-up in economic activity.
New initiatives, such as visas for retirees and the expansion of the 10-year golden visa programme, are expected to support the local property market, according to industry experts.
About 4,182 apartments and villas were completed across 18 projects at the end of the fourth quarter of last year. This constituted 34.3 per cent of all newly built units that were in the pipeline for the year, the report said.
Al Raha Beach and Yas Island accounted for 30 per cent of newly built units while Al Reem Island contributed to 24 per cent of overall units.
Notable apartment completions during the fourth quarter were Al Ghadeer Phase 2 (611 units), Al Raha Lofts (278 units) and Marina Rise Tower (234 units), the report said.
The average residential asking price per square foot in the fourth quarter of 2021 was up 1.9 per cent from the previous quarter and up 8.6 per cent annually, according to ValuStrat.
Overall, citywide residential asking rents increased 3.1 per cent annually and 2.3 per cent from the previous quarter.
Villa rents rose by 2 per cent annually and by 2.6 per cent from the three months ending September 30, 2020. Apartment rents were up 4.1 per cent on an annual basis and 2.1 per cent over the third quarter of last year, the report found.
The average annual rents for two-bedroom villas was Dh112,000 while three-bedroom and four-bedroom villa yearly rents were Dh134,000 and Dh210,000, respectively, ValuStrat said.
The average yearly rent for a studio apartment was Dh51,000 while that for a one-bedroom apartment was Dh80,000. Two-bedroom and three-bedroom apartment rents were Dh116,000 and Dh160,000, respectively.
Residential occupancy in Abu Dhabi was estimated at 81.9 per cent during the quarter.
Meanwhile, fourth quarter asking rents for offices in Abu Dhabi’s primary commercial districts declined 6.2 per cent from the previous three-month period and by 8.5 per cent annually, ValuStrat said.
The average occupancy for buildings in the city’s central business districts stood at 84.4 per cent, it said.
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The Details
Article 15
Produced by: Carnival Cinemas, Zee Studios
Directed by: Anubhav Sinha
Starring: Ayushmann Khurrana, Kumud Mishra, Manoj Pahwa, Sayani Gupta, Zeeshan Ayyub
Our rating: 4/5
Ticket prices
General admission Dh295 (under-three free)
Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free
Buy tickets at: wbworldabudhabi.com/en/tickets
Scoreline
Syria 1-1 Australia
Syria Al Somah 85'
Australia Kruse 40'
Like a Fading Shadow
Antonio Muñoz Molina
Translated from the Spanish by Camilo A. Ramirez
Tuskar Rock Press (pp. 310)
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
What are NFTs?
Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.
You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”
However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.
This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”
This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.
