Top locations to invest in real estate in UAE: Abu Dhabi

Top five areas in the capital, where, in experts' opinion, landlords are most likely to achieve the best rental returns.

A 2020 study issued by a real estate consulting firm Savills reveals that Dubai offers investors attractive deals with one of the highest rental profitability in the world.

If now is the right time to invest, where, in experts' opinion, landlords are most likely to achieve the best rental returns?

Below is the list of top five areas in Abu Dhabi that offer the highest rental profitability.

AL GHADEER DISTRICT

According to Crompton Partners, a large real estate company, the Al Ghadeer project developed by Aldar and located on the border of Dubai and Abu Dhabi, has the highest rental profitability in UAE capital, which is 8 percent.

Rental cost of a one-bedroom apartment in Al Ghadeer stats from USD 5,989, two-bedroom apartment rental cost starts from USD 11,706. In 2020, sales prices in the district declined by 8 percent.

AL REEF DISTRICT 

The second highest rental profitability in Abu Dhabi is found in Al Reef, a district located on the outskirts of the city, where it stands at 7.5 percent.

According to Crompton Partners' data, it will cost USD 13,068 to rent a one-bedroom apartment in Al Reef, USD 24,502 to rent a three-bedroom apartment and renting a villa in the area will cost from USD 21,780 to USD 44,921.

Al Reef gained popularity last year as the pandemic was spurring more residents to move to more spacious housing, so prices there, according to the real estate company, grew by 4 percent.

AL REEM ISLAND

Al Reem Island offers the third highest rental profitability in Abu Dhabi with an average of 6.8 percent. Renting a one-bedroom apartment on Al Reem Island will cost from USD 13,612 to USD 19,057, while a premium four-bedroom apartment will have an annual rent of about USD 65,340.

AL RAHA BEACH AND YAS ISLAND

Al Raha Beach and Yas Island complete the list of top five places to rent in Abu Dhabi with rental profitability of 6.2 percent and 6 percent, respectively.

According to Crompton Partners, Al Raha Beach, an Aldar beachfront development, witnessed a 6 percent drop in sales prices last year, while apartment prices on Yas Island declined by 6 percent and villa prices grew by 12 percent.

A one-bedroom apartment in Al Raha Beach can be rented out from USD 17,696 and a premium four-bedroom apartment for USD 70,785. At the same time, renting a four-bedroom townhouse will cost between USD 51,700 and USD 84,400.

As for Yas Island, renting of a one-bedroom apartment will cost from USD 19,057, while a three-bedroom apartment can be rented out for USD 51,728. Rental cost of two-bedroom villa in the community stands at USD 43,560, a five-bedroom villa costs between USD 65 340 and USD 81 676.

Ben Crompton, managing partner at Crompton Partners, says, buying a property for rent has never offered better value and interest rates have been at an all-time low. A low interest rate means that investors can purchase a good property for less money and quickly recoup it.