Real estate development in Abu Dhabi is dominated by large, mostly local government-backed companies, several of which are responsible for the master development of various emerging areas of the city. These developers include Aldar Properties, which has acted as the lead developer on Yas Island. Other major developers include Mubadala Real Estate and Infrastructure (MREI), Mubadala Development Company’s real estate investment arm, which is developing Al Maryah Island and Zayed Sports City, and the state-owned Tourism Development & Investment Corporation (TDIC), responsible for the development of Saadiyat Island.

Other developers active in the emirate include Bloom Holding, which is part of the privately owned National Holding Company; Tamouh, a unit of the UAE’s Royal Group; and Taiwanese firm Farglory.

Development Plans

The government’s strategy for land use and development in Abu Dhabi City is laid out in an urban structure framework plan known as Plan Capital 2030 (previously Plan Abu Dhabi 2030), which foresees a total of 24m sq metres gross floor area of development. A significant element of the plan is the construction of a second major hub in addition to the current city centre on Abu Dhabi Island, to be known as Zayed City (formerly Capital District).

“It’s been recognised for some time that Abu Dhabi Island has limited capacity and that the city needs to develop multiple centres,” said Falah Al Ahbabi, director-general of the Abu Dhabi Urban Planning Council (UPC), as he was explaining the rationale for the new hub, which will become the new centre for government in the city.

While construction work on Zayed City has yet to commence, in November 2015 the UPC approved a master plan for the development of Shakhbout City (formerly known as Khalifa City B), which will house 80,000 people and will act as a dormitory community for the new centre, and handed it over to the Abu Dhabi City Municipality for implementation and development.

The UPC recently completed technical work on an update of Plan Capital 2030, the original version of which was launched in 2007, based on revised data and projections for central issues such as population and economic growth and taking into account a number of changes such as the designation of new protected environmental areas.

While details of the update were not available at the time of writing, Al Ahbabi told OBG that the overall strategic direction of the original plan remained largely unchanged. “The update confirmed the main elements of the original version of Plan Capital, including the creation of Zayed City, which will still be needed given current population growth trends,” he said, adding that while a timetable for its development had yet to be announced, he believed work on it would begin soon. “Given population growth, a large portion of the city will need to be in place by 2030.” Various new parts of Abu Dhabi City are being developed under the plan, including the Yas, Al Reem, Al Maryah and Saadiyat islands to the north and east of Abu Dhabi Island.

Al Maryah Island

The 114-ha Al Maryah Island is Abu Dhabi’s premier business and lifestyle destination located between the historic city centre on Abu Dhabi Island and Al Reem Island. MREI has developed a significant part of the southern half of the island and will focus on its completion for at least the next five years. Al Maryah Island is connected to surrounding neighbourhoods via six bridges that are open for vehicles, and two more that have been recently completed.

Ali Eid AlMheiri, executive director of MREI, told OBG the firm’s vision is to ensure that Al Maryah Island continues to meet the long-term commercial and residential needs of Abu Dhabi. To that end, MREI’s advanced infrastructural developments on the island have already spurred the growth of sectors spanning retail, health care, business, financial and hospitality. Such advancements, combined with attractive investment incentives, are proving to be highly lucrative for developers and investors.

“The plan for the next five to eight years is the full development of the southern half of the island with all the plots sold and construction well under way. With a number of key assets being delivered in the next several years, including the Four Seasons Hotel Abu Dhabi (launching in May 2016) and the Al Maryah Central retail development, it is a healthy mix of products that will build on the existing vibrant community, which we are confident will attract further investment,” AlMheiri told OBG.

A number of major developments have already opened on the island, including the 409,000-sq-metre, 364-bed Cleveland Clinic Abu Dhabi hospital, fully open since May 2015, and the 180,000-sq-metre office development at Abu Dhabi Global Market Square (formerly Sowwah Square), the 30,000-sq-metre retail space at The Galleria and the luxury five-star Rosewood Abu Dhabi.

Business Element

Abu Dhabi Global Market (ADGM), located on Al Maryah Island, was designated as a financial free zone in 2013, with an initial focus on attracting the private banking and wealth and asset management industries. The free zone covers 1.7m sq metres of the island.

Leasing of Abu Dhabi Global Market Square’s Al Sila tower is at 95% occupancy and Al Maqam at 82% occupancy. With these two buildings almost at full capacity, MREI received significant interest for Al Khatem and Al Sarab towers, as international businesses were attracted by the regulatory framework based on English Common Law. Leasing of the remaining office space was suspended in April 2014 pending the finalisation of the ADGM’s regulatory framework. However, these are now open for leasing enquiries as the regulatory framework has been finalised in recent months.

The zone published draft regulations covering several major aspects of its free zone rules in June 2015 and invited applications for membership from non-financial firms. In October 2015 it announced that it would begin to accept applications for membership and licensing from financial companies, following the publication of its Financial Services and Markets Regulations and Financial Services Regulatory Authority (FSRA) rules. The rules governing ADGM’s courts and judiciary were also finalised in December 2015, and the first regulated licences were issued by the FSRA in January 2016.

While Al Maryah Island is a financial free zone AlMheiri told OBG that the company’s vision for its development was very much that of a mixed-use hub, which will include a number of residential, health care, retail and commercial projects.

“Al Maryah Island is a premier business and lifestyle destination, a financial free zone and home to the world’s newest international financial centre – ADGM. As a designated free zone it allows the opportunity for expatriates as well as UAE nationals to purchase residential units,” AlMheiri told OBG. “However, the long-term vision of the island is not simply to be a central business district that is only bustling during working hours, but to offer a healthy range of products in the development of a vibrant community.” One of the first major residential projects will be the Richard Rogers-designed Maryah Plaza development, consisting of four towers to be built by Taiwanese company Farglory, which broke ground in 2013. While the project is aimed at the ultra-high end of the market, AlMheiri said the island would contain a mix of residential projects for different market segments.

Another major development in the pipeline on the island is Al Maryah Central, a 290,000-sq-metre mixed-use development by Gulf Related – a joint venture between local developer Gulf Capital and US-based Related Companies – that will include 214,000 sq metres of retail space, including the first international Macy’s and Abu Dhabi’s first Bloomingdale’s, due to open in 2018.

MREI’s other main development project is the family-oriented Zayed Sports City, on the eastern edge of Abu Dhabi Island. Together with Asian developer CapitaLand, the firm has completed a residential development there, Rihan Heights. “Zayed Sports City will be a key focus in terms of our development strategy,” AlMheiri told OBG. “It is being designated as a family-friendly destination linked with residential properties, entertainment venues, and food and beverage outlets, while integrating it with various sports facilities.”

Yas Island

The UPC is coordinating with three developers to review planning schemes on Yas Island. The island was initially conceived as an entertainment hub – it hosts the emirate’s Formula One track, a water park and its largest shopping centre, Yas Mall (see Retail chapter) – but it is now witnessing residential development, which Mai Hassan, financial analyst at JLL, said was likely to prove popular, as had developments at the nearby Al Raha beach. The lead developer on Yas is Aldar Properties, which has several major projects ongoing, including the 800-unit Mayan, a luxury waterfront project; West Yas, a high-end residential development; and Ansam, a luxury golf and waterfront residential project with 500 apartments.

The first phase of sales for Mayan development commenced in November 2015, with prices starting from around Dh800,000 ($218,000) for studio apartments. According to the company, construction is due to start in 2016, and the units will be handed over to buyers in 2018. Overlooking the mangroves that surround the island, West Yas will be home to more than 1000 villas, as well as two retail centres, a community centre and a mosque. Meanwhile, located on the west side of the island, Ansam is a residential development consisting of low-rise, medium-density apartments. Units in Mayan and Ansam are available for purchase by both Emiratis and expatriates.

On the Seef Precinct of Al Raha Beach and within close proximity to Yas Island, real estate development, management and investment company Aabar Properties is building a 115,000-sq-metre complex that will consist of residential, commercial and entertainment facilities and will ultimately house up to 120,000 residents. Construction of the development was awarded to Ghantoot Murray and Roberts, with completion expected in 2017.

Saadiyat Island

Another major development zone is Saadiyat Island, which is a project being undertaken by the government-backed TDIC as a cultural hub, with three major museums – Louvre Abu Dhabi, Guggenheim Abu Dhabi and Zayed National Museum – planned to be built on the island. It also hosts educational institutions, luxury hospitality and leisure venues and a number of high-end residential developments including the St Regis Residences. Abu Dhabi-based developer Bloom Properties has two mixed-use developments on Saadiyat Island: Park View, with a residential tower and serviced hotel apartments that will be managed by Rotana; and Soho Square, which encompasses a range of residential, retail and commercial spaces.

Located opposite the New York University campus, Park View is a mixed-use project that will offer 234 residential units and 188 hotel apartments ranging from studios to two-bedroom apartments, and a wide variety of retail, amenities and facilities. “Saadiyat has a healthy mix between foreign and local investors as well as end users and those utilizing the properties for investment purposes,” Sufian Hasan Al Marzooqi, CEO of TDIC, told OBG.

Inspired by the Soho district in New York, Soho Square in Saadiyat’s University neighbourhood is a medium-rise, mixed-use urban development. The project’s residential complex, which has a central courtyard interlinking two 10-storey residential blocks, will feature 302 high-end residences, ranging from studios to three-bedroom apartments, townhouses and penthouses. The development’s amenities will include restaurants and cafés, a swimming pool and a fitness centre.

“Saadiyat has incredible upside growth potential primarily due to its prime location and stunning landscape. Additionally, the number of developments and community facilities that have already come to market and which are scheduled to come on-line very soon provide Saadiyat with the supportive infrastructure required making it that much more attractive to end-users and investors alike,” Sameh Muhtadi, the CEO of Bloom Holding, the property and lifestyle development arm of National Holding in Abu Dhabi, told OBG.

Beach Element

TDIC announced in April 2015 the launch of Jawaher Saadiyat, its latest residential community in the Saadiyat Beach District, with 83 villas and townhouses. In October 2015, it handed over the luxury residences that are the third phase of the Saadiyat Beach Villas. The development of the 77 villas had started in April of 2013.

On Saadiyat Island’s north-western coast, Saadiyat Development and Investment Company is developing Hidd Al Saadiyat, which will cover more than 1.5m sq metres with nearly 7 km of waterfront. The development is expected to feature five-star hotels and international resorts along with more than 400 villas and 15 low-rise apartment buildings. Infrastructure works on Hidd Al Saadiyat began in 2012 and villa construction in July 2013, and the project is scheduled for completion at the end of 2016. Property is also available for sale to expatriates for a 99-year lease term.

According to Muhtadi, rental yields are very attractive on Saadiyat, and the scale of demand for off-plan sales has exceeded the expectations of some. “Originally, our strategy was to focus on the international market, but surprisingly the majority of buyers have been UAE nationals, 50% of which have been for investment purposes,” said Muhtadi.

Al Reem Island

In June 2015 the UPC approved an integrated concept master plan (ICMP) for Al Reem Island aimed at increasing coordination between developers. “There are a lot of different developers working on Al Reem Island, which posed a number of challenges and risked giving rise to fragmented development, but the plan has resolved these,” said Al Ahbabi.

In addition, the document also details the social infrastructure that will be built on the island as part of its ongoing development. These include transport links between different development areas on the island, 500,000 sq metres of parks and other forms of communal space, 17 nurseries, kindergartens and schools, nine mosques, three hospitals and a branch of the Sorbonne university, as well as police and civil defence facilities.

According to Tariq Sultan, the CEO of Bunya, a company responsible for the design, implementation, infrastructure management and operations on the island, Al Reem will serve as the primary area for residential development in the years to come. “The launch of the new integrated concept master plan for the island provides a clear long-term strategy that will encourage further development and investment,” Sultan told OBG.

The island is projected to become home to 210,000 people, up from around 20,000 currently, and approximately 20m sq metres of gross floor space is to be developed on it, including 1.4m sq metres of office space. In addition, the master plan also includes the construction of new transport infrastructure connecting Abu Dhabi Island to other parts of the city via Al Reem as well as affordable housing obligations for developers.

Industry figures say that the island holds substantial promise for the sector. “The primary focus for real estate development in Abu Dhabi will be centred on Al Reem Island, which is being positioned as the ‘New Abu Dhabi’ with an abundance of mid-market products being developed over the medium term,” Jassem Al Ali, CEO of First Gulf Properties, told OBG. “From a developer’s perspective, the island continues to offer good margins and healthy returns as rental demand remains strong.”

Aldar’s flagship project on the island is Shams Abu Dhabi, a new community located in the Al Reem Island investment zone. The development will be home to 45,000 residents when completed and will also feature retail and commercial space.

The major landmarks in the district are the 74-storey Sky Tower and 65-storey Sun Tower, as well as Gate Towers – three 65-storey blocks topped by a penthouse bridge.

Offering a wide range of amenities such as a mall, gymnasia, cafés and restaurants, Sky Tower has 474 residential units and 75,300 sq metres of commercial office space, while Sun Tower will have 680 residential units. Gate Towers is mixed-use development with 3533 residential units as well as retail and leisure amenities.

Abu Dhabi-based real estate development firm Tamouh’s projects on the island include the vast City of Lights community and Marina Square. Encompassing a total of 60 towers (52 residential and eight commercial), mixed-used development blocks as well as retail space and a range of leisure amenities, the 144-acre City of Lights is characterised by interlinked plazas and a canal running through its centre. Eventually, the community will have an estimated population of 28,000. In 2015 Tamouh said it expected to deliver some 4500 new homes over the next four years at the project.

Meanwhile, completed in 2011 and spread on over 1.2m sq metres, Marina Square is a residential district consisting of residential, commercial, retail and hotel components. Other developments under way on the island include Aabar Properties’ Kite Residences, a 29-storey tower with 126 apartments, sales of which commenced in March 2015, and The Wave, a 23-storey complex with 229 residential units, and office and retail space.

“The further development of Al Reem Island requires the construction of key supporting infrastructure and in particular community facilities such as parks, promenades and beaches. This is essential in supporting the creation of a sustainable community,” Sultan told OBG.

Masdar City

Breaking ground in 2008 and designed to become one of the most sustainable cities in the world, the 6-sq-km Masdar City is currently taking shape in the emirate. Being built in phases, the city was set up as a centre for research and development for clean technology, and it is home to the Masdar Institute of Science and Technology and the headquarters of the International Renewable Energy Agency. The building works for a residential complex of 500 one- and two-bedroom apartments, constructed with verified sustainable materials and meeting LEED Gold and three-pearl Estidama sustainability criteria, commenced in the city in the second quarter of 2015. When complete, an estimated 40,000 people will live in the city.

A Retreat

According to Khaldoun Saleh, the general manager of Wahat Al Zaweya, there is growing demand from UAE citizens who want to live away from the larger urban centres. “It’s easy to forget that you can live and work in Dubai and Abu Dhabi but still have a place in the countryside for weekends or holidays,” said Saleh. Wahat Al Zaweya is thus building an eco-friendly, self-sustainable, mixed-use community adjacent to the Dubai-Al Ain highway on more than 22.7m sq metres in the Faqaa corridor of Al Ain region.

The pre-concept master plan for the project was prepared in late 2012. This was followed by workshops and discussions with various authorities and stakeholders in order to create a sustainable, high-quality community in the area.

The project will consist of 6000 holiday or weekend homes as well as schools, health care facilities, theme parks, retail malls and a desert-based resort. The residential villas will account for the majority of the land area and will start to be delivered in 2018. “Times are changing. In particular as a result of the people’s heightened environmental awareness, an environmentally sustainable community is an attractive proposition,” Saleh told OBG. “It’s important to remember the heritage of this country doesn’t necessarily lie in the large coastal cities, but in the country’s desert heartlands.”

Residential Market

The residential market in Abu Dhabi City is characterised by a divide between expatriate workers and Emirati citizens, with the latter tending to live in villas in developments on the outskirts of the city, while many foreigners tend to live on or close to Abu Dhabi Island. Changes implemented in early 2014 allowed non-nationals – who make up the great majority of the emirate’s population – to purchase and own property (but not land) on a freehold basis in designated investment zones, of which there are 12. Prior to 2014 the closest foreigners could come to buying property was taking out leasehold agreements of up to 99 years.

Total residential housing stock stood at approximately 244,000 units at the end of the third quarter of 2015, according to latest available data from real estate services firm JLL – more or less unchanged from the end of 2014. According to JLL, around 5000 units were due to enter the market in the final quarter of the year, followed by 6000 and 8000 in 2016 and 2017, respectively.

Prices in the segment have risen in recent years. In 2013 the authorities removed regulations limiting annual rent increases to 5%, and rises followed.

According to CBRE figures, average rents were up by 17% in the fourth quarter of 2014 on the same period the previous year. A September 2015 report by CBRE ranked average rents in the emirate as the second highest in the world, at $2649, behind only London. More recently, however, prices have levelled off somewhat. Sale prices and rents remained unchanged in the third quarter 2015 on the previous quarter, as did sales prices on the same period in 2014, though rents were up 3% and 7% for villas and apartments, respectively.

Despite the year-on-year (y-o-y) rental rises, JLL said that late-2015 transaction volumes were down and that demand was set to fall due to state spending cuts and cost of living rises. “Government spending drives the real estate market by creating jobs for expats, which brings people into the market. Reduced oil prices will have a big impact on economic growth and real estate markets this year,” Hassan told OBG. “Low oil prices lead to spending cuts in the government sector and a major reduction in government spending on economic diversification and infrastructure; however, demand growth will continue from projects that started when oil prices were strong, such as the airport expansion and the growth of Etihad Airline.”

Despite this, she told OBG that she did not expect a fall in rental prices, in particular at the high end of the market. “There is a lack of supply when it comes to very high-end locations and rental yields are very attractive, so any falls are likely to be limited,” she told OBG, adding that yields would likely remain high for at least another year. CBRE ranked yields in the emirate as the fifth highest in the world. Hassan also said there was a significant supply shortage of low- to mid-range housing. “By contrast, availability in the mid-to-high segment is high, and much of the pipeline also consists of mid-to high-end projects,” she said, noting that demand for the mid-to-high segment also remained high and that oversupply of such properties was unlikely to become a major issue in coming years.

Reduced availability of bank financing is one factor with negative implications for demand, as banks are currently more careful about lending, in particular for off-plan and speculative purchases.

Affordable Housing

With residential prices high, demand for affordable housing is growing. “The increases in rental prices over the past several years have put considerable pressure on Abu Dhabi’s cost of living. Developers would welcome the opportunity to address this gap in the market should additional land be made available at more attractive prices,” Al Ali told OBG.

Part of the problem is low returns on lower-end developments. “Returns are low for affordable housing projects and are therefore not attractive for developers,” Hassan said, also arguing that there was a need for a government initiative to grant land to developers for free or at low prices. However, she said that developments outside the city centre, such as Danat and Rawdhat, appeared promising for lower-end developments.

To help address the issue, the UPC in October 2015 said that a policy setting affordable housing targets for developers has been formulated and is awaiting government approval.

Developers are also increasingly taking the issue into account; for example, in July 2015 one of the developers active on Al Reem Island, Tamouh, said it was reworking its master plan for development on the island to make 20% of the units it is building there affordable housing. “There is certainly a rise in demand for quality affordable housing and closer to the city centre,” Joe Ong, managing director of Tamouh, said. “This is extremely important in terms of supporting the future growth of the city as there has to be a balance in terms of supply, which addresses the needs of low- to mid-income individuals and families.”

Office Market

Office space supply in Abu Dhabi City stood at 3.3m sq metres of gross leasable area (GLA) at the end of the third quarter of 2015, according to JLL, up from 3.1m sq metres at the end of 2014. The firm expected another 73,000 sq metres of space to have opened by the end of the year, followed by 291,000 sq metres in 2016 and 56,000 sq metres in 2017.

It said that demand for office space was “subdued” in that quarter, due to the impact of low oil prices on government spending and on activity in the hydrocarbons industry. Other industry sources offered similar assessments. “The market is very slow across all grades at the moment, with most activity coming in the form of relocations rather than new demand, and even some of these are being put on hold due to the oil price decline,” Matthew Dadd, head of commercial leasing at Knight Frank UAE, told OBG. “Requirements for office accommodation have also decreased, and there has been a significant decline in the government’s uptake of large space.”

Nevertheless, prices for grade-A space were stable on the previous quarter and up 13% y-o-y in the third quarter of 2015, to Dh1850 ($504) per sq metre, which Hassan attributed to low availability. “There was a lot of over-supply in the segment following the crash, and increased demand since then hasn’t been reflected by a major rise in supply as developers remain cautious,” she said. JLL expects prices to hold steady due to factors such as limited supply in the pipeline, though it said grade-B rents could fall as more space comes on-line.

Dadd told OBG that a substantial proportion of the new developments coming into use in the near future were owner-occupied, which would also limit downward price pressures. “The market is likely to remain static in 2016, possibly with a slight improvement in sentiment as people realise that despite reduced oil prices, its fundamentals have not really changed that much,” said Dadd. “Furthermore, with a limited pipeline of new developments, vacancies are likely to drop further and developers will realise they need to build more for the next market cycle,” he continued.


Retail real estate supply stood at 2.6m sq metres of GLA in the third quarter of 2015, according to JLL, up from 2.5m sq metres at the end of 2014. The major development in the segment in 2014 was the opening of Aldar’s 235,000-sq-metre Yas Mall on Yas Island in November 2014, with 235,000 sq metres of net leasable area, marking the arrival of the emirate’s first super-regional mall capable of competing with some of neighbouring Dubai’s largest retail facilities (see Retail chapter).

The year 2013 also saw the opening of a number of new facilities, including the Galleria Mall on Al Maryah Island and the World Trade Centre mall near the Corniche on Abu Dhabi Island. “The retail market is buoyant, and there has been a seismic change in terms of the quality and delivery of retail developments, which is boosting recreational opportunities for both prospective residents and tourists,” Dadd told OBG, suggesting that the success of the segment could have knock-on positive effects in other parts of the market.

Retail rents remained unchanged on a y-o-y basis in the third quarter of 2015, at Dh3000 ($817) per sq metre on Abu Dhabi Island and Dh1860 ($506) per sq metre off the island, according to JLL data. Vacancy rates stayed similarly flat, at about 2%. Only small amounts of space are expected to enter the market between now and 2017, suggesting prices are unlikely to fall in the meantime.

However, two major new shopping malls are due to open in 2018, namely the retail element of Al Maryah Central on Al Maryah Island and the $1bn Reem Mall, which is being developed by two Kuwaiti firms, National Real Estate Company and United Projects for Aviation Services. The UPC granted detailed planning approval for the Reem Mall in January 2016, six months after the mall’s concept plans were approved.

Hassan said there is steady demand for retail space in Abu Dhabi, but that the delivery of future super-regional malls is expected to place downward pressure on retail rentals in the emirate.

“There will remain demand from increased tourist arrivals and from the local residents,” Hassan told OBG. “However, the appreciation of the US dollar will have an impact on tourist spending as it becomes more expensive for visitors from Europe and countries with non-USD pegged currencies. Furthermore, potential future taxation and lower oil and power subsidies may impact the purchasing power of the resident population.”


In contrast to the retail segment, the hospitality market saw significant capacity growth in 2015 (see Tourism chapter). The number of room keys available rose from 19,700 at the end of 2014 to 20,700 at the end of September, and a further 2000 keys were expected to be delivered in the last quarter of the year, according to JLL. The firm expects some 1600 more keys to be delivered in 2016 and 1300 in 2017, with most additional capacity coming at the higher end of the market. “Hospitality is the most positive real estate sector and is making clear progress and should continue to outperform, as it is less affected by government spending compared to the other real estate sectors,” JLL’s Hassan told OBG.


Although real estate transactions have become relatively subdued of late, industry figures expect prices to hold up across most segments. Meanwhile, rapid development is expected to continue across major development zones in Abu Dhabi City, and plans to build a second major city remain in place following the update of Plan Capital 2030, suggesting that the city is set to continue to grow and change rapidly in the coming years.