What you need to know
- On 14 September 2026, the ADGM Registration Authority published Consultation Paper No. 3 of 2026, proposing new Undeveloped Commercial Land Regulations.
- In short, the ADGM is considering penalising landowners who sit on vacant commercial plots by imposing an annual fee of 2% of the plot’s fair market value.
Who would this apply to?
- Any person/entity who owns vacant/undeveloped land within the ADGM (including Reem Island).
What you need to do
- Do not act on the proposals yet: the Regulations are not yet in force. Final enactment will only follow once the consultation period has ended, and may include modifications.
- However, in anticipation, you should:
- Audit your ADGM (including Reem Island) land holdings: identify any vacant commercial plots that could fall within the scope of these Regulations.
- Review your development timelines: assess whether you can realistically meet the proposed milestones, particularly the 6-month permit application window and the 60-day construction commencement deadline.
- You may also consider responding to the consultation: comments must be submitted via the RA’s Consultation Portal by 4 October 2026. A link can be found here.
The Proposal
On 14 September 2026, the ADGM Registration Authority published Consultation Paper No. 3 of 2026, proposing new Undeveloped Commercial Land Regulations. In short, the ADGM is considering penalising landowners who sit on vacant commercial plots by imposing an annual fee of 2% of the plot’s fair market value.
Who would this apply to?
This would apply to any person or entity who owns vacant/undeveloped land within the ADGM (including Reem Island). This is location-driven; there is no suggestion that this would apply to ADGM entities holding land outside the ADGM.
How would it work?
The proposed regime sets out a series of deadlines that plot owners must meet:
- A 6-month grace period from enactment to submit a building permit application to the Competent Authority.
- 7 days to file the issued building permit with the Registrar, and 30 days thereafter to submit a Notice of Commencement.
- 60 days from the Notice of Commencement to begin physical construction.
- An ongoing obligation to maintain continuous construction. If works stop for 90+ consecutive days without justification, the fee is triggered or reinstated.
A failure at any of these stages triggers the 2% “Undeveloped Land Fee”. The fee continues to apply until the plot is no longer classified as “Undeveloped.” Plot owners can challenge the fair market value assessment by submitting an independent valuation from an ADGM-approved valuer within 30 days of the fee notification. Values are reassessed annually via ADGM’s “ADGM Value” system.
There are limited exemptions available. Examples include:
- Development is blocked by a court order or other legal/administrative impediment.
- A new 6-month grace period may apply on a genuine arm’s-length transfer but related-party or repeat transfers designed to avoid the fee will not qualify.
- Registered off-plan projects are excluded entirely.
Why this matters now
This proposal lands at a pivotal moment for Abu Dhabi’s property market. According to a recent EnterpriseAM report, capital values in Q2 2026 rose just 2.1% quarter-on-quarter; the slowest pace in two years, whilst total transaction values fell 25.1% from a record Q1. Against that, demand for commercial office space in the ADGM remains extremely robust, with vacancy rates reportedly at 1-2%.
In other words, the market is entering a more mature phase where affordability pressures, geopolitical headwinds, and rising construction costs are already weighing on sentiment and activity. Against that backdrop, the ADGM is signalling that it will not tolerate land-banking; it wants vacant plots developed, and it is prepared to impose meaningful financial consequences to make that happen.
Our recommended steps
- Do not act on the proposals yet: the Regulations are not yet in force. Final enactment will only follow once the consultation period has ended, and may include modifications.
- However, in anticipation, you should:
- Audit your ADGM (including Reem Island) land holdings: identify any vacant commercial plots that could fall within the scope of these Regulations.
- Review your development timelines: assess whether you can realistically meet the proposed milestones, particularly the 6-month permit application window and the 60-day construction commencement deadline.
- You may also consider responding to the consultation: comments must be submitted via the RA’s Consultation Portal by 4 October 2026. A link can be found here.
Please contact the Ashurst Real Estate Team if you would like to discuss any of the above and the possible implications for your specific position.
Want to know more?
- EnterpriseAM: Abu Dhabi housing market cools after record run - UAE
- ADGM: https://www.adgm.com/legal-framework/public-consultations
Authors: Chris Beaumont-McQuillan, Partner and Keaton Bishop, Associate.
Other Key Contacts: Daisy Choi, Associate.
