Abu Dhabi has recorded an increased demand for office space, meaning it must build more Grade A assets, according to a new report by property consultancy Savills.
The growing private sector, rising business confidence and foreign direct investment continue to draw investors and foreign professionals to the UAE’s capital city, leading to higher demand for commercial office space, the report found.
The report said that the current lack of Grade A assets is the biggest challenge for the office market in the capital, but added that work was already being carried out to establish more premium office spaces.
“The city has more than 90,000 square metres in the pipeline till 2026 from prominent developers across projects like The Link Masdar City, Masdar City Square, and the HB Office Tower from Aldar,” Savills said.
“Most of these upcoming projects have recorded healthy pre-commitment rates due to the high demand.”
The need for office space in Abu Dhabi is driven by established locations such as Maryah Island, the Capital Centre, Masdar City, and Al Raha, the Savills report said.
The prominent Grade A office assets such as Abu Dhabi Global Market and the International Tower are operating at about 95 per cent occupancy, it added.
Abu Dhabi’s economy grew 3.1 per cent annually last year, hitting its highest level in a decade, as a sharp expansion of the non-oil sector drove momentum amid a continuing push for diversification.
The emirate's gross domestic product for the 12 months to the end of December reached Dh1.14 trillion ($310.63 billion), its best performance in terms of value in 10 years despite challenges and global market fluctuations that affected all sectors, Abu Dhabi Media Office said.
The non-oil economy of Abu Dhabi expanded 9.1 per cent year-on-year, driven by “significant strides in the construction, finance and insurance, and transportation and storage economic activities” that contributed more than 53 per cent to the total GDP, the media office said, citing Statistics Centre Abu Dhabi data.
Abu Dhabi’s economy has maintained a robust growth momentum since the Covid-driven slowdown. The emirate's GDP grew by 9.3 per cent annually in 2022 to record the highest growth rate in the Middle East and North Africa region, exceeding Dh1.1 trillion.
“The traction in these locations can be primarily attributed to the better connectivity compared to other micro-markets, higher build quality, limited availability, and concentration of well-laid infrastructure, while in terms of the occupier sector, government and semi-government, engineering and consulting, and banking, financial services and insurance firms led the demand,” the consultancy said.
“Companies favouring high-performing assets at lower rental rates are fuelling the demand for Grade B properties in areas such as Corniche, Khalidiya, and Abu Dhabi Downtown.
“The demand for Grade B buildings varies based on factors such as building condition, available amenities, and parking options.”
The leasing activity for office space in Abu Dhabi is led by the influx of new entrants to the market as well as the expansion of existing companies, according to Savills.
Morgan Stanley, Korea’s H2O, and Infiniti Capital are among the major companies that took up space during the first quarter of this year, the report said.
“To support the growth of its financial sector, in May 2023, the government announced a tenfold expansion of the financial free zone’s jurisdiction by adding Reem Island to the existing jurisdiction, expanding its area to about 1,438 hectares,” the study said.
“Aldar has announced the expansion of the ADGM office tower following the expansion to Al Reem Island, and a new business park in Saadiyat Island, which are due to be completed by 2027, to tap into the growing demand for prime Grade A office spaces.”
The growing demand, coupled with the limited availability of prime Grade A office spaces, has led to an overall increase in rent.
Rates increased by 1 per cent quarter a quarter. However, a select few assets command a premium over the others owing to their location and accessibility.
The city has more than 90,000 square metres in the pipeline till 2026 from developers across projects like The Link Masdar City, Masdar City Square, and the HB Office Tower from Aldar
Savills
The central business district recorded a 7 per cent annual rise in the first quarter. This area houses major office towers such as Etihad Tower, ADGM, and the WTC Office Tower.
ADGM quotes the highest rentals in the market, which is about Dh2,600 per square metre with a 30 per cent annual rental growth, Savills said.
The non-oil sector’s expansion is fuelling the need for industrial and logistics/warehousing space in Abu Dhabi, a separate Savills report said.
The interest from small and medium-sized enterprises in light industrial units due to their cost-effectiveness and scalability continued to grow.
“As the government actively positions the country as a pivotal hub for exports and re-exports, warehousing occupancy levels have risen significantly across the city,” the study said.
The manufacturing sector, oil and gas sector, and third-party logistics are the primary drivers of demand in Abu Dhabi.
Savills said the e-commerce sector is also rapidly expanding due to growing domestic consumption, with quick delivery platforms driving the uptake of smaller-sized units closer to the city.
Leasing activity in the first quarter was primarily concentrated in the Industrial City of Abu Dhabi (ICAD), Mussasfah, and Khalifa Economic Zones Abu Dhabi (Kezad), it added.
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
Review: Tomb Raider
Dir: Roar Uthaug
Starring: Alicia Vikander, Dominic West, Daniel Wu, Walter Goggins
two stars
The years Ramadan fell in May
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Attacks on Egypt’s long rooted Copts
Egypt’s Copts belong to one of the world’s oldest Christian communities, with Mark the Evangelist credited with founding their church around 300 AD. Orthodox Christians account for the overwhelming majority of Christians in Egypt, with the rest mainly made up of Greek Orthodox, Catholics and Anglicans.
The community accounts for some 10 per cent of Egypt’s 100 million people, with the largest concentrations of Christians found in Cairo, Alexandria and the provinces of Minya and Assiut south of Cairo.
Egypt’s Christians have had a somewhat turbulent history in the Muslim majority Arab nation, with the community occasionally suffering outright persecution but generally living in peace with their Muslim compatriots. But radical Muslims who have first emerged in the 1970s have whipped up anti-Christian sentiments, something that has, in turn, led to an upsurge in attacks against their places of worship, church-linked facilities as well as their businesses and homes.
More recently, ISIS has vowed to go after the Christians, claiming responsibility for a series of attacks against churches packed with worshippers starting December 2016.
The discrimination many Christians complain about and the shift towards religious conservatism by many Egyptian Muslims over the last 50 years have forced hundreds of thousands of Christians to migrate, starting new lives in growing communities in places as far afield as Australia, Canada and the United States.
Here is a look at major attacks against Egypt's Coptic Christians in recent years:
November 2: Masked gunmen riding pickup trucks opened fire on three buses carrying pilgrims to the remote desert monastery of St. Samuel the Confessor south of Cairo, killing 7 and wounding about 20. IS claimed responsibility for the attack.
May 26, 2017: Masked militants riding in three all-terrain cars open fire on a bus carrying pilgrims on their way to the Monastery of St. Samuel the Confessor, killing 29 and wounding 22. ISIS claimed responsibility for the attack.
April 2017: Twin attacks by suicide bombers hit churches in the coastal city of Alexandria and the Nile Delta city of Tanta. At least 43 people are killed and scores of worshippers injured in the Palm Sunday attack, which narrowly missed a ceremony presided over by Pope Tawadros II, spiritual leader of Egypt Orthodox Copts, in Alexandria's St. Mark's Cathedral. ISIS claimed responsibility for the attacks.
February 2017: Hundreds of Egyptian Christians flee their homes in the northern part of the Sinai Peninsula, fearing attacks by ISIS. The group's North Sinai affiliate had killed at least seven Coptic Christians in the restive peninsula in less than a month.
December 2016: A bombing at a chapel adjacent to Egypt's main Coptic Christian cathedral in Cairo kills 30 people and wounds dozens during Sunday Mass in one of the deadliest attacks carried out against the religious minority in recent memory. ISIS claimed responsibility.
July 2016: Pope Tawadros II says that since 2013 there were 37 sectarian attacks on Christians in Egypt, nearly one incident a month. A Muslim mob stabs to death a 27-year-old Coptic Christian man, Fam Khalaf, in the central city of Minya over a personal feud.
May 2016: A Muslim mob ransacks and torches seven Christian homes in Minya after rumours spread that a Christian man had an affair with a Muslim woman. The elderly mother of the Christian man was stripped naked and dragged through a street by the mob.
New Year's Eve 2011: A bomb explodes in a Coptic Christian church in Alexandria as worshippers leave after a midnight mass, killing more than 20 people.
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Tributes from the UAE's personal finance community
• Sebastien Aguilar, who heads SimplyFI.org, a non-profit community where people learn to invest Bogleheads’ style
“It is thanks to Jack Bogle’s work that this community exists and thanks to his work that many investors now get the full benefits of long term, buy and hold stock market investing.
Compared to the industry, investing using the common sense approach of a Boglehead saves a lot in costs and guarantees higher returns than the average actively managed fund over the long term.
From a personal perspective, learning how to invest using Bogle’s approach was a turning point in my life. I quickly realised there was no point chasing returns and paying expensive advisers or platforms. Once money is taken care off, you can work on what truly matters, such as family, relationships or other projects. I owe Jack Bogle for that.”
• Sam Instone, director of financial advisory firm AES International
"Thought to have saved investors over a trillion dollars, Jack Bogle’s ideas truly changed the way the world invests. Shaped by his own personal experiences, his philosophy and basic rules for investors challenged the status quo of a self-interested global industry and eventually prevailed. Loathed by many big companies and commission-driven salespeople, he has transformed the way well-informed investors and professional advisers make decisions."
• Demos Kyprianou, a board member of SimplyFI.org
"Jack Bogle for me was a rebel, a revolutionary who changed the industry and gave the little guy like me, a chance. He was also a mentor who inspired me to take the leap and take control of my own finances."
• Steve Cronin, founder of DeadSimpleSaving.com
"Obsessed with reducing fees, Jack Bogle structured Vanguard to be owned by its clients – that way the priority would be fee minimisation for clients rather than profit maximisation for the company.
His real gift to us has been the ability to invest in the stock market (buy and hold for the long term) rather than be forced to speculate (try to make profits in the shorter term) or even worse have others speculate on our behalf.
Bogle has given countless investors the ability to get on with their life while growing their wealth in the background as fast as possible. The Financial Independence movement would barely exist without this."
• Zach Holz, who blogs about financial independence at The Happiest Teacher
"Jack Bogle was one of the greatest forces for wealth democratisation the world has ever seen. He allowed people a way to be free from the parasitical "financial advisers" whose only real concern are the fat fees they get from selling you over-complicated "products" that have caused millions of people all around the world real harm.”
• Tuan Phan, a board member of SimplyFI.org
"In an industry that’s synonymous with greed, Jack Bogle was a lone wolf, swimming against the tide. When others were incentivised to enrich themselves, he stood by the ‘fiduciary’ standard – something that is badly needed in the financial industry of the UAE."
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
Nancy 9 (Hassa Beek)
Nancy Ajram
(In2Musica)
Chatham House Rule
A mark of Chatham House’s influence 100 years on since its founding, was Moscow’s formal declaration last month that it was an “undesirable
organisation”.
The depth of knowledge and academics that it drew on
following the Ukraine invasion had broadcast Mr Putin’s chicanery.
The institute is more used to accommodating world leaders,
with Nelson Mandela, Margaret Thatcher among those helping it provide
authoritative commentary on world events.
Chatham House was formally founded as the Royal Institute of
International Affairs following the peace conferences of World War One. Its
founder, Lionel Curtis, wanted a more scientific examination of international affairs
with a transparent exchange of information and ideas.
That arena of debate and analysis was enhanced by the “Chatham
House Rule” states that the contents of any meeting can be discussed outside Chatham
House but no mention can be made identifying individuals who commented.
This has enabled some candid exchanges on difficult subjects
allowing a greater degree of free speech from high-ranking figures.
These meetings are highly valued, so much so that
ambassadors reported them in secret diplomatic cables that – when they were
revealed in the Wikileaks reporting – were thus found to have broken the rule. However,
most speeches are held on the record.
Its research and debate has offered fresh ideas to
policymakers enabling them to more coherently address troubling issues from climate
change to health and food security.
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Ad Astra
Director: James Gray
Stars: Brad Pitt, Tommy Lee Jones
Five out of five stars
