Abu Dhabi’s Office and Industrial Real Estate Markets Demonstrate Steady Growth

Stephen Forbes, Head of Abu Dhabi, Savills Middle East.

Savills Middle East has released its latest Abu Dhabi Commercial Property Market Report,
outlining continued growth in both the office and industrial real estate sectors during 2024. Key
factors include rising demand, new regulatory flexibilities, and increased development activity
across the emirate.

According to the report, the number of economic licences issued on the mainland rose by 16%
in 2024, while active licences in non-financial free zones grew by 22%. These increases
coincide with regulatory changes introduced by the Abu Dhabi Department of Economic
Development (ADDED), which now allows companies registered in other emirates and free
zones to open branches in Abu Dhabi without the need for a physical presence in the first year.
The report notes sustained demand for Grade A office space, leading to high occupancy levels
across several developments. International Tower, Daman House, and Baniyas Tower are
operating at full occupancy, while occupancy within ADGM has reached 97%. The number of
operational entities within ADGM rose to 2,088, including 231 financial services firms, a 31%
increase compared to H1 2023.

In terms of rental performance, Grade A office buildings in CBD and Outer CBD submarkets
recorded an average year-on-year increase of 8% in Q4 2024. Notable individual buildings saw
higher growth: Capital Gate Tower (14%), Addax Tower (13%), and ADGM (12%). ADGM office
rental rates range between AED 2,600 and AED 2,900 per sq m per annum.
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.

Looking ahead, more than 100,000 sq m of new office supply is expected to be delivered in
2025, including developments such as Masdar City Square and Yas Place, which have already
recorded healthy pre-commitment levels.
The industrial and logistics sector also recorded notable activity. According to the report,
average market rents rose by 25% year-on-year in 2024, with submarkets such as KEZAD
experiencing rental increases of 38%. Mussafah, ICAD and KEZAD all reached or exceeded
AED 500 per sq m per annum. Key demand drivers include third-party logistics (3PL), e-
commerce, and retail operators.
Major announcements in H2 2024 include a AED 5 billion industrial and logistics park by
Mubadala and Aldar, and a AED 320 million warehouse facility by ADAFZ and Radius,
delivering over 90,000 sq m of space by Q4 2026. KEZAD has also commenced development of
250,000 sq m, scheduled for completion in Q4 2025.

Savills Middle East notes that while upcoming supply may ease some pressure, demand for
specialised and high-quality facilities is expected to remain firm across both the office and
industrial segments.
For further insights, download the full Abu Dhabi Commercial Property Market report 2024 here.

Savills plc is a global real estate services provider listed on the London Stock Exchange. With a presence in the Middle
East for over 40 years, Savills offers an extensive range of specialist advisory, management and transactional services
across the United Arab Emirates, Oman, Bahrain, Egypt, and Saudi Arabia. Expertise includes property management,
residential and commercial agency services, property and business assets valuation, and investment and development
advisory. Originally founded in the UK in 1855, Savills has an international network of over 700 offices and associates
employing over 40,000 people across the Americas, UK, Europe, Asia Pacific, Africa, and the Middle East.
For further information, please contact:
+971 (0)4 365 7700 www.savills.me