Savills: Abu Dhabi Commercial Property Market Report 2024 Released

Savills Middle East has unveiled its latest report on Abu Dhabi’s commercial real estate market, highlighting steady expansion across both the office and industrial segments in 2024. This growth is attributed to rising demand, regulatory enhancements, and increased construction activity throughout the emirate.

Surge in Business Licences Following Regulatory Changes

The report indicates a 16% increase in the issuance of economic licences on the mainland in 2024, alongside a 22% rise in active licences within non-financial free zones. These upward trends align with regulatory adjustments introduced by the Abu Dhabi Department of Economic Development (ADDED), which now permits businesses from other emirates and free zones to establish branches in Abu Dhabi without requiring a physical office for the first year.

High Occupancy in Grade A Office Spaces

Demand for premium office spaces remains robust, resulting in near-full occupancy levels in key developments. Notably, International Tower, Daman House, and Baniyas Tower are operating at full capacity, while office space within the Abu Dhabi Global Market (ADGM) has reached a 97% occupancy rate. Additionally, the number of active businesses in ADGM has grown to 2,088, including 231 financial service firms—representing a 31% increase from the first half of 2023.

Strong Rental Performance in Prime Office Locations

Office rental rates for Grade A properties in central and outer business districts saw an 8% annual increase in Q4 2024. Specific landmarks reported even higher gains, with Capital Gate Tower seeing a 14% rise, Addax Tower 13%, and ADGM 12%. Rental rates within ADGM now range from AED 2,600 to AED 2,900 per square meter per year.

Commenting on the findings, Stephen Forbes, Head of Abu Dhabi, Savills Middle East, said: “Occupier demand in Abu Dhabi remains strong, especially within key sectors such as financial services, consulting and technology. As a result, we continue to see high occupancy rates in well-located, Grade A buildings. The introduction of regulatory changes and infrastructure expansion is contributing to sustained interest in the emirate. In parallel, the industrial sector has also seen impressive growth, with average rental rates rising 25% year-on-year, driven by strong demand from third-party logistics, e-commerce, and retail occupiers.”

Expansion of Office Space in 2025

The market is set to receive over 100,000 square meters of new office space in 2025. Projects like Masdar City Square and Yas Place are already attracting strong pre-commitments, reflecting ongoing investor and occupier confidence in Abu Dhabi’s commercial property sector.

Significant Growth in Industrial and Logistics Sector

The industrial and logistics market has also witnessed remarkable momentum. The report notes a 25% year-on-year increase in average rental prices in 2024, with locations such as KEZAD experiencing a notable 38% surge. Prime industrial areas including Mussafah, ICAD, and KEZAD have all reached or surpassed rental rates of AED 500 per square meter per year, driven primarily by demand from third-party logistics (3PL), e-commerce, and retail businesses.

Major Industrial Investments and Developments

Key developments in the latter half of 2024 include a AED 5 billion industrial and logistics park announced by Mubadala and Aldar, as well as a AED 320 million warehouse facility by ADAFZ and Radius, which is set to deliver over 90,000 square meters of space by Q4 2026. Additionally, KEZAD has commenced work on a 250,000 square meter expansion scheduled for completion in Q4 2025.

Market Outlook: Sustained Demand Despite New Supply

While the upcoming supply of office and industrial spaces may ease some market pressures, Savills Middle East anticipates that demand for high-quality, specialised facilities will remain strong. Both segments are expected to continue benefiting from Abu Dhabi’s pro-business regulations and sustained economic expansion.