Abu Dhabi: Surge in New Tenancy Contracts as Residents Move into Freshly Built Properties

In Abu Dhabi, new tenancy contracts are on the rise as tenants move into recently completed buildings, supported by an influx of new property developments.

According to analysts from real estate consultancy CBRE, overall rental registrations saw a slight decline in the third quarter of 2024 compared to the previous year. However, new contracts rose by 2 percent, indicating a preference among tenants for newer projects over older properties—likely contributing to the dip in renewal registrations.

Similar to other emirates, Abu Dhabi is experiencing a strong influx of new residents, which is driving up rental and property prices. The UAE capital’s population has reached 3.8 million this year, making it the country’s most populous city.

According to Cushman & Wakefield Core, areas like Yas Island are increasingly appealing to tenants, resulting in rental hikes, while established luxury communities like Saadiyat Island are leading growth in the rental market. In the third quarter of 2024, apartment rents in Abu Dhabi rose by 9 percent year-on-year, while villa rents grew by 4 percent, CBRE reported.

A significant number of new projects are set to launch in the coming years, expected to ease rental pressures as more properties become available. CBRE analysts noted a large number of off-plan launches recorded between January and September, particularly across Yas Island, Hudayriyat Island, Ramham Island, and Saadiyat Island. This development pipeline is anticipated to see a surge in annual completions between 2025 and 2027, reflecting the increased development activity initiated during the Covid-19 period.

End-user demand is also rising. Cushman & Wakefield Core reported a total of 2,431 units delivered so far, including 1,315 apartments in areas like Al Raha Beach, Al Maryah Island, and Masdar City, alongside 1,116 villas on Jubail Island, Yas Island, and Saadiyat Reserve. An additional 1,950 units are expected to be completed later this year, bringing 2024’s total to roughly 4,300 units, with most upcoming deliveries focused on Reem Island and Yas Island.

While off-plan transactions still represent a significant share of the market, demand has shifted toward existing properties in 2024. Cushman & Wakefield Core’s data shows ready property transactions rose by 54 percent compared to the same period in 2023, indicating more end-users are seeking ready-to-move-in homes. Conversely, off-plan sales transactions declined by 19 percent year-to-date in 2024, a result of fewer new project launches and lower overall launch volumes.