Rents for budget apartments and villas are on the rise in Abu Dhabi but good deals are still available, depending on where you look.
Rent for budget villas and apartments rose by close to 8 per cent in the first half of 2023, according to the latest Bayut property report.
The cost of renting a luxury villa in the UAE capital has increased by 11 per cent, according to the same study.
Khalifa City A is an attractive option for those looking for a bargain, with the average annual rent for a studio at a pocket-friendly Dh28,000,with one-bedroom apartments at Dh42,000 and two-bedroom flats at Dh61,000.
The most popular areas to rent affordable apartments in Abu Dhabi, according to the Bayut report, are in Khalifa City A, Al Khalidiyah and Al Muroor.
If you are in the market for a luxury apartment, the most sought after are on Al Reem Island, Al Raha Beach and the Corniche area.
Those seeking affordable villas are most likely to search in Mohamed bin Zayed City, Khalifa City and Madinat Al Riyadh.
The most popular locations to own a luxury villa are in Al Raha Gardens, Yas Island and Al Mushrif.
"Abu Dhabi has plenty of coastlines to choose from, so it is not surprising that high-net-worth individuals (HNWIs) are drawn to the islands, such as Yas Island, Saadiyat Island and Al Reem Island," said Fibha Ahmed, sales director of Bayut and Dubizzle.
"These islands offer stunning views, luxurious amenities, and a vibrant lifestyle.
"On the other end of the market, Mohammad Bin Zayed City (MBZ City) has become a preferred location for renting affordable villas as its prices remain stable, due to its proximity to the center of Abu Dhabi and the Abu Dhabi International Airport.
"Khalifa City, on the other hand, which is similarly located in the outskirts, is the most popular for budget-friendly rental apartments and has seen a decline in property prices by 5.26 per cent, most likely due to more residents choosing to renew instead of moving."
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Where to rent in the capital
Khalifa City A
Khalifa City A, located on the main motorway to Dubai, is the most popular and cheapest area to rent in Abu Dhabi, according to the report. The area has developed into a sprawling residential area, dotted with schools and nurseries.
The going rate for two bedrooms in the area is Dh61,000.
The price for one-bedroom units in Khalifa City A is Dh42,000 while rents for studios tend to cost Dh28,000.
Al Khalidiya and Muroor
Al Khalidiya is also popular for reasonably priced units. One and two-bedroom properties start from Dh33,000 and Dh40,000, according to rental website Property Finder. Studio apartments tend to cost from Dh20,000 to Dh40,000.
One and two-bedroom apartments in Muroor are available from Dh32,000 and Dh42,000. The rent for studios starts from Dh23,000.
Al Reem Island
Al Reem Island, located 600m from the capital's city centre, is the most sought-after area for luxury apartments.
The mixed-use development, with its combination of luxury apartments, penthouses and villas, is one of Abu Dhabi’s fastest growing residential communities.
You can expect to rent a one-bedroom apartment from Dh45,000 upwards, while a two-bedroom can be rented from Dh54,000.
A three-bedroom townhouse can be rented from Dh130,000 upwards.
Al Raha Beach
Al Raha beach apartments and villas have attracted residents who want to live closer to the beach and far away from the hustle and bustle of the city centre.
A one-bedroom apartment starts from Dh40,000, while two-bedroom flats are available from about Dh63,000.
Three-bedroom townhouses start from Dh192,000.
Yas Island
Known as Abu Dhabi’s entertainment centre, Yas Island is home to Ferrari World, Yas Water World and Warner Brothers theme park. Many new residential communities have also sprung up, making it a quickly expanding community.
Rents for a two-bedroom apartment start at Dh72,000.
One-bedroom units are available from Dh50,000.
A four-bedroom house is available to rent from Dh255,000 in Yas, while five and six-bedroom homes cost from Dh270,000 and Dh340,000.
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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.”
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