Abu Dhabi and RAK Property Markets Attract $796.8 Million in Global Private Capital

High-net-worth individuals (HNWIs) from various corners of the globe have set their sights on investing significant sums in residential real estate in both Abu Dhabi and Ras Al Khaimah (RAK), as indicated by a recent report.

According to the second annual 2024 Destination Dubai report from global property consultancy Knight Frank, HNWIs are showing a considerable interest in investing in the UAE's property market. Specifically, they are willing to commit $408.3 million towards residential properties in Abu Dhabi and an additional $388.5 million in Ras Al Khaimah.

The report sheds light on the shifting dynamics within the UAE's real estate landscape, especially concerning high-net-worth individuals. It reveals that while there is a modest appetite among HNWIs to invest in real estate in the capital city of Abu Dhabi, with 23% expressing interest, this interest intensifies notably as personal net worth increases.

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For instance, while only 14% of individuals with a net worth ranging between $2-5 million are interested in purchasing property in Abu Dhabi, a significant 57% of those with personal wealth exceeding $15 million are keen on acquiring residential property in the UAE capital.

The success of the 'Visit Abu Dhabi' campaign is highlighted in the report, with 50% of expat HNWIs based in the Gulf Cooperation Council (GCC) countries and 67% of global HNWIs with a net worth surpassing $20 million indicating that the Department of Culture & Tourism, Abu Dhabi’s global advertising efforts have positively influenced them to visit the city directly.

Shehzad Jamal, Partner – Strategy & Consultancy, MEA, pointed out that residential values in Abu Dhabi have remained relatively stable over the past four years. This stability has played a significant role in encouraging domestic buyers to transition from renting to owning homes. Additionally, with residential properties in Abu Dhabi trading for around Dh1,000 per square foot, they remain approximately one-third cheaper than those in Dubai, further enhancing the appeal of home ownership in the city among domestic buyers. 

The report also highlights a surge in property deals in Abu Dhabi during 2023, with a record 15,653 transactions recorded, amounting to Dh87.1 billion across all sectors. Notably, the capital witnessed a 175% increase in non-resident investors compared to 2022.

Faisal Durrani, Partner – Head of Research, MENA, noted that while 40% of HNWIs plan to purchase property in Abu Dhabi for investment purposes, 8% are interested in primary residences in the city, with another 15% considering buying a second home in the UAE capital.

Abu Dhabi island emerges as the most favored location for HNWIs to purchase property, followed by Saadiyat Island, which hosts various attractions including the F1 Grand Prix race in November and renowned museums like the Louvre and Guggenheim.

Moving away from Abu Dhabi, the report also highlights Ras Al Khaimah (RAK) as a noteworthy property investment destination. According to Knight Frank, RAK ranks as the fourth most preferred property investment destination among global HNWIs within the UAE, trailing behind Dubai, Abu Dhabi, and Sharjah.

The planned arrival of the Wynn Resort, along with its responsible gaming venue, is anticipated to significantly transform RAK's fortunes, attracting 46% of global HNWIs and 75% of those with a net worth exceeding $20 million.

The report concludes that RAK's appeal has swiftly grown globally, positioning it both as a tourist destination and a lucrative property investment location.