Real estate in Abu Dhabi continues to feel downward pressure across most sectors due to the lingering impact of job losses and consolidation activity witnessed during 2016/2017. With VAT being introduced across the UAE, a marginal negative impact has been felt in Abu Dhabi’s retail sector, whereas other asset classes are yet to register a shift in dynamics.
Rents are softening across the board, however , the pace is starting to decelerate with the Grade A market displaying relative resilience. With oil prices witnessing sustained upward momentum and government spending on the rise, these positive forces are driving up the overall economic sentiment. Although a clear turnaround is distant in the office and industrial sectors, we expect this deceleration to continue in the midterm, followed by a gradual increase in demand as occupiers continue to consolidate and optimise current foot-print.
Rising supply figures further amplify the weakening performance witnessed by the retail sector and create diverging performance trends between the resilient prime super regional malls and the under-performing regional & community malls.
Source : Core Savills