Investing in Al Reem Island’s property

The investment opportunities at Al Reem Island are very good as it is the most preferred area for renting apartments in the first part of 2023. The area has some of the highest rates of return in Abu Dhabi with an average rate of 6.6%.

Al Reem Island Overview

Al Reem Island is positioned in Abu Dhabi’s northeast; one can think of it as a pocket where coastal allure meets urban life. This energetic neighborhood has both metropolitan amenities and beachside living that brings it closer to Saadiyat Island and Al Maryah Island.

Consider waking up every morning next to the ocean! In addition to beaches, Al Reem Island also has an array of shops, parks, and sport facilities. If your search is either on Properties for Sale or Properties for Rent, you have a variety of choices to choose from this distinguished neighborhood.

Popular location for apartment rentals

 Al Reem Island emerged as the most popular location for apartment rentals in the first and second quarters of 2023, due to the high demand from tenants. Compared to 2022, when the island was ranked third in terms of tenant demand, it is currently in the top spot. These numbers show how popular the neighborhood is becoming among those seeking an Abu Dhabi neighborhood where they can live comfortably.

The following benefits are the main reasons why prospective tenants pick Al Reem Island.

Families are searching for a neighborhood that provides access to educational resources as well as places to go on weekend and evening excursions. Numerous schools and nurseries in the area use American and British curricula. Some residential complexes are walking distance away from Reem Central Park and Al Fay Park, which have sports courts and kid-friendly play areas.

·Professionals in business usually pick homes near their places of employment. Al Qurm View, Sky Tower, Addax Park Tower, Tamouh Tower, and many more residential and/or commercial property developments are available on Al Reem Island. The neighborhood is close to banks, hospital buildings, airline headquarters, IT company offices, and more, all within ten minutes’ drive.

Students come to Al Reem Island to study at Sorbonne University Abu Dhabi, which is the French and English speaking branch of Paris-Sorbonne University.

Due to the strong demand among different categories of tenants, the total number of residents on Al Reem Island has increased. As a result, there is a greater chance for investors to rent out their property profitably.

Consistent rental income

On Al Reem Island, investors can rent out their properties and make a high, steady income. 

The ROI on Al Reem Island is equivalent to the average rate of return for the entire emirate, which ranged from 5 to 7% in the first half of 2023. A decline in the average purchase price at equal rental fees resulted in an almost 1% increase in the yield on investment for studios as of Q2.

A slight increase in purchase and rental costs by the second quarter can account for small variations in return on investment for two-bedroom apartments. The price increase of almost a quarter between Q1 and Q2 is the cause of the decline in ROI for properties with one or three bedrooms.

Reasonable costs

Al Reem Island gives investors a good selection of properties to rent out their properties based on their allocated budget by offering apartments in the affordable, mid-range, and luxury segments.

Purchase costs

A comparison of the area’s annual price change is shown below.

The official government statistics DARI, a trustworthy digital ecosystem for Abu Dhabi’s real estate market, is the source of the listed prices.

The yearly price increase tendency is displayed in this table. Studios saw the least amount of growth, at 3%, whereas apartments show more noteworthy numbers. Properties with one and three bedrooms have seen price increases of 28–29%, while homes with two bedrooms have seen an increase of 18%.

Additionally, purchasing a property at an earlier stage of construction will prove to be more profitable for investors. The annual cost of homes on Al Reem Island has risen by nearly one-third compared to what investors paid the previous year.

Rental costs

From 2023 to the same time in 2024, rental prices in the area don’t change. Investors can rest easy knowing that their yearly income will not drop due to steady rental fees.

The Abu Dhabi government’s laws allow a property owner to increase the rental rate by up to 5% once a year. We compute the 5-year difference, for instance, by taking the average cost of a one-bedroom apartment into account.

Investors can anticipate an increase in the payment of AED 15K (USD 4.1K) over a period of 5 years, or 27% of the property price, if rental costs rise by 5% annually.

According to data released in June 2023 by the UAE National Bureau of Statistics, inflation can reach a maximum of 2%. Because of this and the fact that the annual price growth exceeds inflation, renting a property on Al Reem Island is profitable.

An extensive selection of finished properties

There are studios and one to five-bedroom apartments on Al Reem Island. Reputable UAE developers, such as Tamouh Investments LLC, Aabar Properties, RAK Properties, Reportage Properties, and many more, are open to offers from investors.

The neighborhood also offers real estate from Aldar Properties, the most sought-after developer in the emirate. This company is well-known for its Abu Dhabi projects, which include the five-star W Abu Dhabi, Yas Mall, and Saadiyat Beach Golf Club. This developer created a number of residential and commercial complexes on Al Reem Island, including Arc Towers, Gate Towers, Sun and Sky Towers, and many others.

Conclusion

Al Reem Island is a desirable location for investments. Due to the popularity of the area among visitors to Abu Dhabi looking to establish a long-term residence, the property owner can expect a steady stream of income. In the event that plans to rent the property out change, it may be possible to resell an apartment at a higher price as the area’s property values rise.