Both activity levels and performance in the UAE’s real estate market have seen a marked upturn over the course of the first quarter of 2022. Looking ahead, there are some potential headwinds which may impact performance, namely interest rate higher and persistently high inflation. However, given the raft of changes to social and regulatory policies and the enactment of a range of federal and local government initiatives, we feel there are strong fundamentals underpinning future performance in the UAE’s real estate sector.    

  • The UAE’s GDP is forecast to grow by 6.1% in 2022
  • Its Hydrocarbon sector is forecast to grow by 12.6% in 2022
  • The UAE’s Purchasing Managers’ Index (PMI) continues to register strong readings. The Index’s latest reading of 54.8 in March was the 16th consecutive month of growth. Dubai’s PMI recorded a 33-month high reading of 55.5 over the same period. 
  • In Abu Dhabi, average rents office rents, in the year to Q1 2022, have decreased in the Prime and Grade A segments of the market by 7.9% and 3.9% respectively. Over the same period, Grade B rents remained stable.
  • During the first quarter of 2022, data from the Dubai Land Department shows that a total of 10,835 new commercial office Ejari contracts (lease contracts) were registered, up 42.9% from a year earlier. A further 9,678 commercial office Ejari contracts were renewed over this period, up 11.6% from a year earlier.
  • In the quarter to Q1 2022, average office market rents in Dubai were either stable or increased in all segments of the market, with Prime, Grade A, Grade B and Grade C rents changing by 2.9%, 0.0%, 0.1% and 1.3% respectively.
  • Average residential property prices in Abu Dhabi increased by 1.5% in the 12 months to March 2022.
  • Average prices in Dubai increased by 11.3% in the year to March 2022. Over this period, average apartment prices increased by 10.0% and average villa prices increased by 20.1%. 
  • Total transaction volumes in the year to date to March 2022 reached 19,009, this is the highest total ever recorded in the first quarter of the year.
  • Despite lower levels of passenger arrivals to its airports, the UAE’s Key Performance Indicators (KPIs) have continued to show significant levels of improvement in 2022. 
  • Year-on-year in the year to date to February 2022, the average occupancy rate increased by 14.6 percentage points.
  • Over the same period, the ADR increased by 47.8%, and as a result we have seen the average RevPAR increase by 83.0%.
  • Retail rents in Dubai have seen a sharp increase in the year to Q1 2022, where average rents increased by 10.5%.
  • In the UAE’s industrial sector, average rents in both Abu Dhabi and Dubai increased by 2.3% and 3.9% respectively, in the year to Q1 2022.