Knight Frank: Abu Dhabi Residential Prices Rise, While Office Leasing Momentum Eases In H1 2026
Abu Dhabi’s residential market continued to post robust price growth in the year to June 2026, even as the emirate’s office leasing market showed its first signs of cooling since the current growth cycle began, according to the latest Abu Dhabi Residential and Office Market Review from global property consultancy Knight Frank.
RESIDENTIAL PERFORMANCE
Apartment prices across Abu Dhabi’s key districts recorded appreciation in the year to June 2026, with values on Yas Island and Al Reem Island both increasing by approximately 18% year-on-year. Al Saadiyat Island maintained its position as the emirate’s most premium apartment market, with average transaction prices reaching approximately AED 43,100 per sqm in the year to June 2026, a year-on-year increase of around 21%, underscoring the resilience of the luxury segment.
In contrast, villa price performance was more fragmented. Al Jubail Island recorded the strongest annual price growth at approximately 40%, while Al Reem Island declined by 22% over the same period. Al Saadiyat Island remained the most expensive villa location in Abu Dhabi, with average transaction values of approximately AED 26,500 per sqm in the year to June 2026, continuing to command a material price premium over all other districts tracked by Knight Frank.
Faisal Durrani, Partner – Head of Research, MENA, said: “Despite the geopolitical challenges posed by the ongoing regional conflict, Abu Dhabi’s residential market continues to be supported by robust domestic demand, with prime waterfront communities such as Al Saadiyat and Yas Island leading the emirate’s price growth. The breadth of price appreciation across both apartments and villas reflects this. Aiding this positive momentum of course is the emirate’s relative affordability, when compared to Dubai, with prices on average 10% lower than Dubai.”
FUTURE SUPPLY
Abu Dhabi’s residential pipeline for 2026-2030 stands at approximately 36,900 units under construction, with apartments accounting for 66% and villas 33%, while serviced apartments represent a marginal share of just 1%, according to Knight Frank’s analysis. Approximately 70% of the apartment pipeline is scheduled for completion in 2026 and 2027, although Knight Frank cautions of possible delays due to construction raw material price hikes, alongside increasing shipping insurance premiums and costs.
Yas Island dominates the community-level pipeline with approximately 7,700 units under construction, followed by Fahid Island (3,550 units) and Saadiyat Island (3,250 units).
Shehzad Jamal, Partner – Real Estate Consultancy, MENA added:“With close to 37,000 homes in the pipeline through to 2030, supply is beginning to catch up with several years of sustained demand. Even so, the concentration of new stock in a handful of master-planned communities means well-located, ready properties in areas like Al Saadiyat and Yas Island are likely to retain their premium.”
OFFICE MARKET
Abu Dhabi’s office leasing market showed its first signs of moderation in the year to June 2026, following several years of uninterrupted growth. Leasing volumes reached approximately 53,200 transactions across full-year 2025, extending a five-year run of continued annual growth and representing an 11% increase on 2024’s already elevated total of around 49,300 transactions.
However, H1 2026 leasing transactions totalled approximately 23,616, a decline of around 13% compared to the same period in 2025 (27,152), marking the first meaningful year-on-year contraction of the current cycle. The softening in rental volume transactions was broadly across all districts, while Al Reem Island was the notable exception, posting a sharp increase of over 148%. Musaffah and Al Danah retained their positions as the two most active leasing districts by transaction volume, although here too both locations recorded year-on-year rental volume contractions of 12% and 20%, respectively.
FUTURE SUPPLY
Approximately 428,000 sqm of new office space is scheduled for delivery between 2026 and 2028, evenly distributed across 2026 (166,000 sqm) and 2027 (165,000 sqm) before Knight Frank expects this to decline to 98,000 sqm in 2028. The volume of incoming supply, set against the current softening in leasing demand, points to potential upward pressure on vacancies in the near term.
James Hodgets, Partner – Occupier Strategy & Solutions, MEA: “The outlook for Abu Dhabi’s office market is firmly positive. Occupancy stands at around 98% with rental rates up year-on-year, and with only around 166,000 sq. m of new supply due in 2026, Grade A space will remain scarce.”
