According to Knight Frank, a leading global property consultancy, Abu Dhabi has become an appealing choice for real estate investors. High net worth individuals (HNWIs) from various countries have an average budget of $2.8M allocated for investing in properties, based on Knight Frank’s data. One factor that has caught the attention of wealthy investors is the announcement of a casino resort in Ras Al Khaimah.
This development has served as an attractive lure for these investors, adding to the appeal of Abu Dhabi as a real estate investment destination.
Knight Frank’s report, titled Destination Dubai, highlights Abu Dhabi’s transformation into a global tourist and investment hotspot, according to Arabian Business.
Over the past 15-20 years, the emirate has successfully positioned itself as a complementary cultural and entertainment hub to Dubai.
Abu Dhabi: An Appealing Choice for Real Estate Investors
In terms of real estate investment preference among global HNWIs, Abu Dhabi ranked as the second most popular destination in the UAE, according to Knight Frank’s report. Among the respondents, approximately 21% chose Abu Dhabi as their most preferred property acquisition location, while Dubai was preferred by 67% of respondents. Ras Al Khaimah secured the third position with 5% of respondents choosing it as their preferred destination.
The combination of cultural landmarks and top-notch infrastructure, including attractions like Yas Island, Abu Dhabi Global Market, and Saadiyat Island, attributes to Abu Dhabi’s appeal as a real estate investment destination. The presence of renowned museums such as the Louvre, as well as the highly anticipated Guggenheim and Zayed museums, further enhance the city’s reputation. These developments have had a positive impact on high-net-worth individuals (HNWIs) worldwide, influencing their decision to consider purchasing property in Abu Dhabi.
In particular, among HNWIs from East Asia, the percentage of individuals who are positively influenced by these developments rises significantly to 70%. This suggests that Abu Dhabi’s cultural offerings and infrastructure developments are particularly appealing to this demographic.
Abu Dhabi’s Transformation into a Global Hotspot
Faisal Durrani, Head of Middle East Research at Knight Frank, said: “Abu Dhabi as a destination has been slowly rising in global prominence, particularly as large-scale cultural and entertainment projects such as the Louvre, Qasr Al Wattan, Ferrari World, Sea World and the Warner Bros Theme Park start to capture the attention of global travellers.”
“And it’s paying off, with 45 per cent of global HNWI indicating that the emirate’s development plans are positively influencing their view of the emirate as an investment destination.”
“Moving further up the wealth spectrum reveals that those with a net worth in excess of $10M view Abu Dhabi even more favourably as a result, with 57 per cent of this cohort keen on investing in the city.”
“Among East Asian HNWI, the figure rises further to 70 per cent, according to our survey.”
An astonishing 89% of HNWIs demonstrate a keen interest in investing in Abu Dhabi, particularly in the residential sector.
The international elite is increasingly drawn to luxury residential properties, including those found on Saadiyat Island. One of the main reasons for this attraction is the highly competitive pricing offered in comparison to other upscale destinations like Palm Jumeirah in Dubai.
Durrani continues: “When it comes to committing to a real estate investment in Abu Dhabi, 74 per cent are interested in exploring investment options, but the challenge, as has been the case historically has been to convert this interest into transactions.”
Dubai’s Influence on Perceptions of Abu Dhabi
“One of the most fascinating findings has been the influence Dubai has on the perceptions of Abu Dhabi in the minds of HNWI around the world.”
“The appetite of frequent visitors to Dubai to purchase real estate in Abu Dhabi stands at 73 per cent, 50 per cent of whom are willing to allocate more than $2M for a property in Abu Dhabi, with the average allocated budget being $3.7M”.
“Clearly, there remains an opportunity to capitalise on this positive familiarity through perhaps more aggressive campaigns in Dubai, or indeed through the entry into the Dubai market to build greater credibility, similar to Aldar’s recent JV announcement with Dubai Holding for 9,000 homes in Dubai’s suburbs”.
Shehzad Jamal, Partner – StratCon, Healthcare, Education and Real Estate, said: “Abu Dhabi is quickly becoming a global destination for high-net-worth individuals (HNWI) looking to invest in real estate.”
“The emirate’s strong economy, stable political environment, and world-class infrastructure are all major factors driving this interest.”
“In addition, Abu Dhabi’s cultural attractions, such as the Louvre Abu Dhabi and the upcoming Zayed National Museum, are also appealing to HNWI.”
“We expect to see this trend continue in the years to come, as Abu Dhabi becomes an even more attractive place to live, work, and invest.”
Ras Al Khaimah: A Rising Tourist Attraction
Knight Frank’s research report on Dubai also explored the transformation of Ras Al Khaimah (RAK) into a popular tourist attraction, as perceived by high-net-worth individuals (HNWI) globally.
The report highlights RAK’s evolution into a top-notch tourism destination starting in 2004. The Investment Development Office has been instrumental in driving this transformation, with RAK offering luxurious hotels, golf courses, and thrilling extreme sports activities as an appealing alternative to Dubai.
Durrani said: “Ras Al Khaimah has been quietly transforming itself over the past 10 to 15 years as an alternative tourist hub to Dubai and part of this plan involves the now under construction 1,500 room Wynn hotel and responsible gaming resort.”
“Interestingly, 55 per cent of global HNWI say the emergence of a gaming resort in Ras Al Khaimah does not influence their perceptions of the emirate as a place to invest, but 30 per cent say it makes it more attractive.”
“For those with a net worth of more than $10m, this rises to 50 per cent and among East Asian HNWI, 60 per cent are more keen on Ras Al Khaimah as a property purchase destination directly as a result of Wynn’s development on Al Marjan Island.”
The positive developments in Abu Dhabi and RAK indicate a promising trajectory for investment and tourism in the UAE.
These cities showcase strategic and innovative initiatives aimed at diversifying their attractions and catering to the changing preferences of international investors.
