Why Investors Are Shifting to Abu Dhabi — What That Means for UAE Property Bets

Abu Dhabi overtakes Dubai in investor thinking — and that matters for UAE real estate

UAE real estate has long been synonymous with Dubai’s tower-filled skyline, rapid price cycles and outsized rental yields. Now a clear shift is emerging, and investors should pay attention. Speaking at HT’s India Next Real Estate Summit, Amit Goenka, founder of Nisus Finance, argued that Abu Dhabi is currently a better place to put money than Dubai, and he backed that opinion with hard market facts and anecdotal evidence from recent trading.

In our analysis, this is not a casual remark; it reflects changing capital flows, different institutional engagement across the two emirates and evolving investor priorities under geopolitical pressure. Below I unpack what the shift means, where returns are likely to come from, the risks to factor in and practical steps for buyers and investors targeting the UAE property market.

What the experts said at the summit — the headlines and the quotes

The session featured Amit Goenka and Santosh Kumar, vice chairman of Anarock Group Business Services. Key points from the discussion that matter for investors:

• Abu Dhabi is accelerating economically and attracting institutional players, said Goenka, and that institutional presence is a major reason it is becoming preferred for investment.
• For Abu Dhabi, office spaces, apartments and villas were called out as the asset classes with the strongest yield potential.
• Goenka quantified an office market imbalance: 5% availability versus 15% demand — a gap that signals tight fundamentals for commercial leasing.
• Despite the regional conflict, rental demand in the UAE has not fallen; between March and April prices rose by 7%, he said, driven by cash buyers.
• Santosh Kumar noted that Indian buyers accounted for 26% of Dubai transactions in the three months to June, underscoring continued cross-border interest.
• Both speakers highlighted that the dirham’s peg to the US dollar is an advantage, with Goenka pointing to a potential 5% yearly currency gain for investors.

These are specific market inputs. They tell us where institutional and retail capital is moving and why certain asset types look attractive.

Why Abu Dhabi is gaining ground: institutional activity, supply-demand math and stability

I am inclined to agree with Goenka that Abu Dhabi’s recent positioning makes it more appealing for certain investors. The reasons are concrete:

• Institutional capital: Abu Dhabi has more active institutional players backing development and leasing. That brings deeper pockets, longer investment horizons and more rigorous underwriting of projects. For investors, institutional activity usually means improved governance, better tenancy covenants and clearer exit channels.
• Office market imbalance: A 5% availability against 15% demand indicates a tight commercial market. When demand materially outstrips supply, rents tend to firm and vacancy-driven discounts diminish. For investors buying office space or investing via funds, that spells yield compression in the short term but steadier income and capital appreciation potential over a medium-term hold.
• Asset mix: Goenka singled out offices, apartments and villas. That mix matters: offices provide lease-driven income, apartments capture rental demand from expatriate populations and villas benefit from family-driven relocations and longer leases.

What this means for buyers: if your priority is steadier, lease-backed income and institutional-grade assets, Abu Dhabi now warrants top consideration. If you want quick capital turnover or speculative upside, Dubai still offers those pathways but with different risk and liquidity profiles.

Dubai’s enduring appeal — rental yield, regulation and investor convenience

Dubai remains a central destination for cross-border real estate investors, and Kumar was clear on why Indians, in particular, keep buying there:

• High rental yields relative to many global gateway cities.
• Tax efficiency due to the UAE’s favourable tax regime.
• World-class infrastructure and easier ownership frameworks, which make buying from abroad simpler.
• Residency-linked investment programmes add another layer of attraction for buyers who want mobility.

Goenka also pointed out practical advantages: Dubai is easier from a regulation and compliance perspective and is affordable relative to comparable global markets. The market is maturing, he said, and that means only more sophisticated investors will dominate future cycles. In his words, "Because of the impetus of the war, it is becoming a mature market where only a sophisticated investor would go. The way people in India research and reflect before investing, the same policy will now also be active in Dubai."

Still, Dubai’s liquidity and transparent resale market remain strong draws. For investors focused on rental yield and short-to-medium-term exits, Dubai remains competitive.

How the regional conflict has affected investor behaviour and pricing

The US-Iran conflict injected a dose of geopolitical risk into capital markets. Yet, according to the speakers:

• Rental demand in the UAE did not decline during the worst of the recent tensions. That is notable. Rental markets often react faster than sales when uncertainty rises, but demand held steady.
• Prices rose by 7% between March and April, attributed largely to unlevered, cash buyers who can move quickly and are less sensitive to short-term volatility.
• Geopolitical risk is a concern that is global rather than isolated, Goenka said, adding that trade, oil prices and gas supply are affected, with knock-on effects for economies that trade heavily with the Gulf.

What I read from this: in a market where cash buyers are dominant, shocks may result in price spikes rather than firesales.