REAL ESTATE SERVICES DUBAI REAL ESTATE MARKET OVERVIEW Q1 2017

Transcription

1 REAL ESTATE SERVICES DUBAI REAL ESTATE MARKET OVERVIEW Q1 217

2 FOREWORD ADIB Real Estate Services comprises a comprehensive real estate banking and advisory platform providing the full range of professional services from a single provider. Our services include:- MPM PROPERTIES FACTS AND FIGURES Real estate financing Strategic development advisory Investment advisory Asset management Project management Residential During Q1 217, over 5,5 new residential units were added to the market, taking the total residential supply of to over 5, units, an increase by 1.2% quarter-on-quarter. We anticipate a further c.14,5 new units to enter the market during the course of next nine months of the year. In Q1 217, a total of 3,34 existing residential units were transacted at a cumulative value of AED5.4 billion, as compared AED4.54 billion during the same period in 216 equating to an increase of 19% year-on-year. Residential sales rates during the quarter have dropped marginally by 1.5% while year-on-year the drop is around 5%. Average residential rents dropped by 2% quarteron-quarter and 5% year-on-year. The drop has been primarily due to deflationary pressure across smaller sized units which remained highest portion of the new supply to enter over the past six months. Office Less than 5, sq.ft. of office space entered during this quarter, the lowest addition over the past few years, taking the office stock to 93.9 million sq.ft. Looking at ongoing construction activity, c.3. million sq.ft. of office space is expected to be added over the next 9 months of 217. Office sale rates across major freehold locations registered a drop of 1% quarter-on-quarter and 4% Valuation Agency Market research Property management Facilities management year-on-year. The highest yearly drop was recorded across Lakes Towers and Downtown areas. Average office rents dropped by 1% quarter-onquarter and 6% year-on-year. The drop has been primarily due to strata office space which has struggled to maintain healthy occupancy and rental rates. Retail Rental renewals and new rates remain relatively flat, driving property operators to monitor and manage expenses cautiously with rental revenue pressure expected to continue throughout the year. With shopping mall occupancy rates showing a marginal decline across the market, operators are shifting focus to increase specialty leasing of Kiosks, RMU, advertising and Pop up stores to assist in compensating on unit rental income. Hotel During Q1 217, over 1,6 rooms were added taking the total supply to over 14, rooms and apartments. Q1 217 has seen hotel revenues remaining flat despite rising occupancy, largely due to declining ADR s and non-room revenues. With pressure on hotel revenues expected to persist across 217, hotel operators are shifting attention to tighten on operational expenses TOTAL UAE STAFF PROPERTY MANAGEMENT STAFF ADVISORY STAFF 35+ LEASING & SALES STAFF 23,5+ UNITS UNDER MANAGEMENT 9bn COMBINED MARKET VALUE OF PROPERTIES VALUED SINCE JANUARY 212 CONTENTS Demand Drivers 4 Macro Trends 6 Residential Sector 8 Project Focus 14 Office Sector 16 Retail Sector 2 Hospitality Sector 22 Definitions & Methodology 24 Contact Information 25 Supply - Photo Gallery 26 Development Location Map 28 No.1 LARGEST ABU DHABI MAINLAND PORTFOLIO 2+ DEDICATED VALUATION PROFESSIONALS 1,7 LANDLORD CLIENTS 98.5% OCCUPANCY RATE 7,6+ MORTGAGE VALUATIONS SINCE JANUARY

3 Q1 217 Q1 217 DEMAND DRIVERS GOVERNMENT INITIATIVES FREEZONES Under directives from His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of, Holding signed an agreement with Municipality to develop the largest public park in land area spread over a land area of 1.4 million sq.m. The park when complete will have 3 kilometers of pathways, 2 kilometers jogging track, more than 14 kilometers of cycle tracks and 7 kilometers of nature trails along with 55 playgrounds, events area, shops, restaurants and cafes. Shaikh Hamdan bin Mohammad bin Rashid Al Maktoum, Crown Prince of and Chairman of Executive Council, approved a lowincome housing policy aimed at providing housing facilities for low income residents both Emiratis and expatriates workers, in strategic sectors in. Indian nationals holding the United States of America green card or visa with at least six months validity will soon be able to get UAE entry visa on arrival with a validity of 14 days and an option for one time extension for the same period. University of Wollongong in announced construction of a new dedicated building offering 2, sq.ft. of campus facilities. This new facility is located in close proximity to the University s current campus and is expected to be in operation by early 22. TRANSPORTATION The Arslanian Group, a leading player in the international rough diamond business has become the 1,th member of the Diamond Exchange (DDE), the GCC s only diamond and coloured stones trading platform. REAL ESTATE AND CONSTRUCTION His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of led the ground breaking ceremony for the Meydan One mall. The mall, once complete, will offer retail space for over 62 outlets, including a hypermarket and department stores, a 21-screen cinema, multipurpose sports facilities for football, basketball and indoor cricket and over 12, car parking spaces. Some of the key components of the development include a one kilometer long indoor ski slope and 38 meter long dancing water fountain. The Electricity and Water Authority inaugurated the second phase of the Mohammed bin Rashid Al Maktoum solar park worth AED1.2 billion, which will generate 2 megawatt clean energy, sufficient to power 5, homes in. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of approved road works along a 12 kilometre stretch of Tripoli Road to link Sheikh Mohammed bin Zayed Road and Emirates Road. The AED5 million road improvement project will ease traffic flow between and Sharjah. TOURISM INITIATIVES Figures from the Department of Tourism and Commerce Marketing ( Tourism) indicate a 12.3% rise in visitors to YTD February 217 versus the same period last year. During the period YTD February 217, had 3.1 million overnight visitors. 2% of the visitors originated from GCC countries, 22% from Western European countries and 18% from South Asia. In terms of top source market, India led with 388, visitors followed by Saudi Arabia with 3, visitors International Airport handled 6.9 million passengers in February 217, up by 8.8% compared to 6.3 million passengers in February 216. During the first two months, passenger traffic increased by 9.3% to million passengers, up from million passengers during the same period last year. and the United Kingdom remained third with 227, visitors. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of, approved Cabinet Decree No 24 for 217. As per the decree, Russian nationals will now be offered on arrival entry visa for 3 days, renewable for a further 3 days. 4 5

4 Q1 217 Q1 217 MACRO TRENDS INVESTOR ANALYSIS DUBAI GDP SHARE BREAKDOWN BY ECONOMIC SECTORS YTD DUBAI LAND TRANSACTIONS VOLUME vs VALUE DUBAI LAND TRANSACTIONS QoQ% CHANGE 11% 12% 5% 15% 6% 22% 29% Source: Statistics Center and MPM Properties Research Transactions 12, 1, 8, 6, 4, 2, Q1 Q2Q3Q4 Q1 Q2Q3Q4 Q1 Q2Q3Q4 Q1 Q2Q3Q4 Q1 Q2Q3Q4 Q Sales Value Sales Transactions * Established Real estate Source: DLD and MPM Properties Research 3, 25, 2, 15, 1, 5, Value (in Millions) Q1 Q2Q3Q4 Q1 Q2Q3Q4 Q1 Q2Q3Q4 Q1 Q2Q3Q4 Q1 Q2Q3Q4 Q Sales Transactions Source: DLD and MPM Properties Research DUBAI POPULATION (GROWTH & HOUSEHOLD SIZE) POPULATION (MILLIONS) ,771 1, Q1 217 Population 2,3 Source: Statistics Center DUBAI CONSTRUCTION ACTIVITY %YoY 2,16 2,214 Growth Rate 2,327 2,447 2,593 2,649 Household Size GROWTH RATE (%PA) AND HOUSEHOLD SIZE DUBAI CPI VS RENTAL CONTRIBUTION TO CPI Q1 217 TOP NATIONALITIES INVESTING IN DUBAI PROPERTY IN Source: DLD UAE India Saudi Arabia United Kingdom Pakistan Egypt Kuwait Qatar 25% 12. 2% %YoY 15% 1% 5% % -5% -1% -15% -2% GDP Construction Source: Statistics Center e JAN 15 JUN 15 JAN 16 JUN 16 JAN 17 Housing CPI Contribution to CPI Source: Statistics Center TOP LOCATIONS - RESIDENTIAL TRANSACTION VALUE Transaction Value AED million Emirates Living Downtown Marina Beach Residence Q4 216 Q1 217 Source: DLD Palm Arabian Ranches Lakes Towers Sports City Village Business Bay 6 7

5 Q1 217 Q1 217 RESIDENTIAL SECTOR SAMPLE OF RESIDENTIAL UPCOMING PROJECTS LOCATION PROPERTY NAME RESIDENTIAL SUPPLY Culture Village Culture Village District One, Mohammed Biin Rashid City Downtown Manazel Al Khor Riah Towers Sobha Meydan Villas The Address Boulevard Residences During Q1 217, over 5,5 new residential units were added to the market, taking the total residential supply of to over 5, units. Freehold areas of Silicon Oasis (DSO), Village Circle (JVC) dominated the supply with 3% of the total units handed over during the quarter. Projects handed over during Q1 217 include Altia and Silicon tower in DSO and Belgravia 1, Shamal Residence, Laya Residence in JVC. Other projects include Wharf Tower 1 & 2 in Culture Village, Warsan Village in International City, Muraba-Palm, Al Naboodah Tower-Al Qusais, Tulip Mirdiff Mirdiff, Polo Residence Building 4 & 5 - Meydan, and Akoya in land. We anticipate a further c.14,5 new units to enter the market during the course of next nine months of the year. As per the completion dates announced by the developers, close to 29, new units are due to enter the market in 217. However, looking at the historic trends and construction progress across the developments, we expect only 7% of this supply to hit the market. During Q1 217, over 3,7 off-plan units (apartments, villas and townhouses) were launched. Prominent projects include the Blue Water Residences by Meraas, Resortz by Danube, Vida Residences by Emaar, La Quinta and Mudon Views by Properties. Marina Marina Arcade Marina Continental Tower Investment Park Green Community West-Phase III Townhouses Studio City Glitz 1 Arjan Syann Park Silicon Oasis Emirates Airlines Towers SAMPLE OF ANNOUNCED PROJECTS IN Q1 217 NAME OF PROJECT TYPE DEVELOPER LOCATION RESIDENTIAL SUPPLY BY UNITS YoY.2%.2%.3%.3%.3%.1%.3%.5% % Q1 217 Q2-Q Existing Supply Apartments Supply Villas +% Change Downtown Views II - Tower 1 & 2 Apartments Emaar Downtown La Quinta Villa Properties Villanova Quad Homes Villa Sobha Sobha Hartland Harbour Gate Apartments Emaar Creek Harbour Nad Al Sheba Gardens Villa plots Meraas Mohammed bin Rashid City KOA Canvas Apartments KOA Mohammed bin Rashid City Golf Views Apartments Emaar South Hajar Villas Villas Damac Akoya Oxygen Mudon Views Apartments Properties Mudon Resortz Apartments Danube Arjan Vida Residences Serviced Apartments Emaar Marina Blue Water Residences Apartments Meraas Blue Waters 8 9

6 Q1 217 Q1 217 RESIDENTIAL SECTOR SALE PRICES RENTS In Q1 217, a total of 3,34 existing residential units were transacted at a cumulative value of AED5.4 billion, as compared AED4.54 billion during the same period in 216, highlighting a 19% yearon-year increase. The prime areas of Marina, Palm, Emirates Living and Downtown accounted for 43% of the total transactions valued at AED2.33 billion. Residential sales rates during the quarter dropped marginally by 1.5% while yearon-year drop was around 5%. High-end properties witnessed the highest drop with Palm recording a drop of 8% for apartments and 7% across villa properties while Downtown area recorded a 5% decline from the average sale rate of AED2,15 Q1 216 to AED2,5 per sq.ft. in Q For the first time, the market is witnessing a price gap between off plan properties vs completed properties. In many instances we have noticed off-plan properties being priced higher than completed properties. Attractive payment structures, rental guarantees, and post-handover payment plans continue to draw-in end users and investors alike which is clearly evident from the transaction data released by Land Department. As per the data, AED11.83 billion worth of off-plan residential properties transacted in Q1 217 as compared to AED5.93 billion in Q A few of the prominent off-plan launches during the quarter include, the Blue Water Residences targeted towards high-end segment with a starting price of AED2,55 per sq.ft. whilst Mudon Views apartments fall under the affordable segment with an average price of AED1,1 per sq.ft. Average residential rents dropped 2% quarter-on-quarter and 5% year-on-year. The drop has been primarily due to deflationary pressure across smaller sized units which had the highest proportion of new supply entering the market over the past six months. Within the apartment segment, smaller units of studio and one bedroom witnessed a drop of over 5%, while larger units witnessed a rental drop of less than 4%. In the villa segment, four bedroom villas witnessed the highest drop of over 7% year-on-year. Looking at the prevailing market condition and anticipated upcoming supply, we expect rents to deflate further during the course of the year. Overall the residential apartment rents continue to witness a drop across all the areas with the highest drop being noticed in Al Barsha and Palm areas. Average rents in Al Barsha area for one bedroom apartments dropped from AED65,-85, per unit per annum in Q1 216 to AED62,-75, per unit per annum in Q1 217 while on Palm, rents for one bedroom dropped to AED15,-125, per unit per annum compared to AED115,-135, per unit per annum in Q1 216, representing an average drop of 9% year-on-year. Across villa districts, the highest rental deflation of over 8% was recorded for villa properties within the Palm, Islands, Silicon Oasis and Golf Estates. Increase in new supply from within the development and neighboring developments has influenced the rental deflation across these developments. Rental rates for a four bedroom villa in Q1 217 in Islands ranged between AED 26,-3, per unit per annum compared to AED29,-34, per unit per annum in Q1 216, resulting in a drop in rents by over 1%, which is largely due to entry of new properties during the quarter. AVERAGE APARTMENT ANNUAL RENTS Q1 217 APARTMENT AVERAGE SALES PRICES (Q1 217) AND PERCENTAGE CHANGE QoQ -2.4% -2.7% -1.4% -1.6% -1.6% -1.8%.%.%.% YoY -5% -6% -1% -8% -5% -2% -4% -4% -2% LOCATION STUDIO 1BR 2BR 3BR Q-ON-Q Y-ON-Y Business Bay % -4.22% DIFC % -5.99% Discovery Gardens % -4.62% AED/sq.ft. 2,5 2, 1,5 1, 5 2,5 1,825 1,775 1,525 1,525 1,375 1, ,225 Downtown % -7.4% Marina % -6.68% Greens % -4.8% International City % -6.68% Downtown Old Town DIFC Palm The Views Marina Business Bay Beach Residence The Greens Beach Residence % -5.1% Lakes Towers % -4.22% Palm % -8.93% Barsha Heights % -3.7% 1 11

7 Q1 217 Q1 217 RESIDENTIAL SECTOR AVERAGE VILLA SALE PRICE AED/ sq.ft. Q1 217 NON-INVESTMENT VILLA VALUES Q AED/sq.ft QoQ YoY 2,5 2, 1,5 1, 5-2.% -7.% 2,4-2.% -4.% 1,275-2.% -2.% 1,125-1.% -6.% 1,113-2.% -2.% 1,75.% -5.% 1,5-3.% -1.% 95.%.% 1, AED (Million) Mirdif Al Barsha Umm Suqeim Al Warqa Low High Average Palm The Lakes Sports City Arabian Ranches Park AVERAGE VILLA ANNUAL RENTS Q1 217 Springs & Meadows Village Al Furjan AED (Million) NON-INVESTMENT VILLA RENTS Q Mirdif Al Barsha Umm Suqeim Al Warqa PROJECT 2 BEDROOM 3 BEDROOM 4 BEDROOM 5 BEDROOM Q.O.Q Y.O.Y Al Furjan % -4.85% 3 Bed 4 Bed 5 Bed Arabian Ranches % -6.93% Sports City % -5.82% Park % -7.64% Village % -5.96% Meadows % -5.45% Palm % -8.64% Springs % -5.7% Islands % -8.22% Golf Estates % -8.48% AED / Sq.ft. NON-INVESTMENT LAND VALUES Q , Mirdif Al Barsha Umm Suqeim Al Warqa Low High Average 12 13

8 Q1 217Q2 215 HAJAR VILLAS Hajar Villas, s first modern stone villas, are being developed by DAMAC Properties. The project comprises of a collection of premium, contemporary villas available in three and four-bedroom homes, one-bedroom duplexes with open-plan arrangements, and duplex units consisting of two one-bedroom units sharing one entrance. The various sizes and arrangements cater to a broad spectrum of investors - from single occupants, to newly-married couples and to families. Located in the heart of international golf community AKOYA Oxygen, Hajar Villas have access to the many amenities on offer in the community, a refreshing escape from the hustle and bustle of the city. AMENITIES AND FACILITIES Unique exteriors of stone with benefits of being naturally warmer in winter and cooler in summer Spacious three and four bedroom villas and one-bedroom duplexes One-of-a-kind arrangement with two units sharing one entrance available for families Private front and back yards Separate living/dining area and kitchen Located in an international golf community with nature-inspired facilities, gourmet dining options, retail boutiques and international golf club UNIT TYPE AREA (SQ.FT.) STARTING PRICE (AED) One bedroom 1,815-1, million Two bedroom 1,752-1, million Three bedroom 1,77-1, million Four bedroom 1, million Five bedroom 2, million PAYMENT PLAN 2% plus registration fees on booking Balance is payable over 5 years According to a report by MEED, UAE s real GDP growth is expected to be 4-5% between 217 and 22. The report also revealed that contracts worth around $22.6 billion were awarded during the first half of 216, mainly driven by real estate, power and transport projects in. The exponential rates of development coupled with a maturing property market that offers strong returns makes a global hotspot for real estate investments today. Investing in an overseas property by extension means you re investing in the country s economy. Fund, and it shows no signs of slowing down. Consequently, the market value of s real estate finds a boost from positive socio-economic variables like continuous population flow, widening job markets, rapid infrastructural development, increasing tourism and retail sector growth significantly increasing the desirability and profitability of real estate. Niall McLoughlin Senior Vice President s economy growing steadily and poised to record a 3.7% growth in 216 up from 3.6% the previous year according to the International Monetary 14 15

9 Q1 217 Q1 217 OFFICE SECTOR OFFICE SUMMARY OFFICE SALES The prime office rents remained stable during the quarter. However, we have witnessed a rising trend of landlords offering incentives of 1-3 months rent-free period and flexible payment terms. Less than 5, sq.ft. of office space entered during this quarter, the lowest addition over the past few years, taking the office stock to 93.9 million sq.ft. Looking at ongoing construction activity, c.3. million sq.ft. of office space is expected to be added over the next 9 months of 217. Of this 68% of the space falls under single ownership category and only 32% strata owned. We are noticing a decline in new supply of strata office space which once dominated the market. Majority of the office space expected during the course of 217 is from Trade Centre district, Business Bay and Science Park locations. Office sale rates across major freehold locations registered a drop of 1% quarter-on-quarter and 4% year-on-year. The highest yearly drop was recorded across Lakes Towers and Downtown areas. Office transactions in both value and volume terms recorded an increase of 7% year-on-year, according to the data from Land Department. During the quarter, over 46, sq.ft. of office space was transacted at a total value of AED536.3 million as compared to 43, sq.ft. of office space with a total value of AED497.3 million in Q However, quarter-on-quarter, the total value dropped by 39% mainly due to transaction of Emaar Business Park building 2 and 4 in Q In Q1 217, Business Bay and Lakes Towers accounted for 62% of the total value of transactions with Business Bay accounting for AED26 million followed by Lakes Towers at AED126 million. Other areas which witnessed increase in transaction activity included Barsha Heights AED56 million, Trade Centre AED32 million, Deira AED26 million and Health Care City AED25 million respectively. OFFICE RENTS DUBAI OFFICE STOCK (28-219) Million sq.ft Q1 217 Stock Expected Q2-Q Average office rents dropped by 1% quarteron-quarter and 6% year-on-year. The drop has been primarily due to strata office space which has struggled on holding healthy occupancy and rental rates. The highest yearly drop of 1% was recorded within the DIFC area. As stated earlier, the drop has been mainly across strata office towers with strata office owners offering the offices, lower than the prevailing rates within the same building. The office rents in the area dropped from AED per sq.ft. per annum in Q1 216 to AED13-34 per sq.ft. per annum in Q Rents across the freehold areas of Lakes Towers, Barsha Heights and Business Bay remained unchanged during the quarter while strata space in Silicon Oasis continued to struggle in achieving decent rental and occupancy rates. Individual strata owners in Silicon Oasis are offering office space as low as AED4 per sq.ft. per annum. Majority of the enquiries during the quarter were for smaller office size of less than 2,5 sq.ft., a preferred unit size across new start-up companies. The office market currently offers multiple options across freehold districts for these new start-ups with flexible payment terms and rent-free period ranging from one to three months

10 Q1 217 Q1 217 OFFICE SECTOR OFFICE AVERAGE SALE PRICES Q1 217 OFFICE RENTS AED/sq.ft. Q1 217 AED / sq.ft. QoQ YoY 2,5 2, 1,5 1, 5-5.% -7.% 2,1-1.% -3.% 1,75.% -2.% 1,475.% -2.%.% -7.% -1.% -4.% 1, AED/sq.ft Downtown DIFC Marina Business Bay Lake Towers Barsha Heights DIFC Downtown Sheikh Zayed Rd Business Bay Lake Towers Barsha Heights DIC & DMC High Low Port Rashid Sheikh Zayed Rd. 18 Jebel Ali Freezone TO ABU DHABI Jebel Ali Port Jebel Ali Industrial Area Sheikh Mohamed Bin Zayed Rd. World Central Airport Investment Park 1 Sheikh Zayed Rd. Jebel Ali Village The The Gardens Greens The Meadows The Discovery Lakes JUMEIRAH Gardens LAKES TOWERS Islands RENT = AED 55 - AED 19 /sq.ft. Emirates Hills AVG. SALE = AED 975 /sq.ft. Park The Springs Investment Park 2 Golf Estates IMPZ Golf Estates DIC & DMC Marina RENT = AED 12 - AED 175 /sq.ft. Media / Internet City Lake Towers Village Village South Sport City Barsha Heights Sheikh Mohamed Bin Zayed Rd. Motor City The Palm Arabian Ranches Al Sufouh BARSHA HEIGHTS RENT = AED 7 - AED 11 /sq.ft. AVG. SALE = AED Al 925 Barsha /sq.ft. Burj Al Arab Umm Suqeim Road Legends Sheikh Zayed Rd. Al Khail Road Umm Suqeim Al Barari Al Safa SHEIKH ZAYED Al RD. Quoz Al Quoz Industrial RENT Area = AED 85 - AED 18 /sq.ft. DOWNTOWN DUBAI RENT = AED 13 - AED 24 /sq.ft. Satwa Al AVG. Wasl SALE = AED 2,2 /sq.ft. Burj Khalifa Business Bay The BUSINESS BAY Lagoons RENT = AED 65 - AED 14 /sq.ft. AVG. SALE = AED 1,5 /sq.ft. Al Marqadh Nad Al Sheba Karama Emirates Towers DIFC DIFC Oud Metha RENT = AED 13 - AED 34 /sq.ft. Za abeelavg. SALE = AED 1,775 /sq.ft. Nad Al Sheba 2 Ras Al Khor Al Khail Road Al Raffa Festival City Naif Rigga Garhoud Port Saeed International Airport TO SHARJAH Murdif Al Mamzar Al Qusais 19

11 Q1 217 Q1 217 RETAIL SECTOR DUBAI RETAIL MALLS GLA BY AREA Q1 217 DUBAI RETAIL SUPPLY (PRE-21) 3% 3% 3% 4% 5% 5% 2% 34% 12% 17% RETAIL SUMMARY 6% 7% 8% 11% 11% 14% 23% 14% Initial outlook for retailer sales in 217 has been viewed as challenging, with pressure on sales targets expected to continue into Q2. With shopping mall occupancy rates showing a marginal decline across the market, operators are shifting focus to increase specialty leasing of Kiosks, RMU, advertising and Pop up stores to assist in compensating on unit rental income. Rental renewals and new rates remain relatively flat, driving property operators to monitor and manage expenses cautiously with rental revenue pressure expected to continue throughout the year. Consumer attendance continue to remain stable across majority of super-regional shopping malls, with spending patterns focused on core-essential shopping, F&B and leisure. With continued new retail, leisure and tourist projects being announced and anticipated to enter the market over the coming years, superregional malls are shifting their tenant mixes, and expanding their existing developments to strengthen their market positions. Some examples are: Mirdif City center s expected opening of Sega & BBC visitor s attraction Orbi to help increase the attendance of domestic and international tourism to the property, and continued strengthening of Ibn Battuta mall attendance with the opening of Premier Inn and metro link. Deira - 2% Marina - 5% Business Bay - 14% Jebel Ali - 5% Barsha - 11% land - 4% Mirdif - 11% - 3% Al Warsan - 8% Al Wasl - 3% Bur - 7% Other Areas - 3% Al Quoz - 6% DUBAI RETAIL MALLS BY SIZE Q % 32% 15% Neighborhood - 17% Community - 12% Regional - 14% Sub-Regional - 23% Super Regional - 34% NEW SUPPLY DELIVERED 21-Q % 33% 16% 16% 2% 22% PRIME SHOPPING MALL AVERAGE RENTS Q1 217 AED/sq.ft. 1,2 1, Neighborhood - 21% Community - 15% Regional - 16% Sub-Regional - 16% Super Regional - 32% Neighborhood - 33% Community - 22% Regional - 2% Super Regional - 25% Anchors Cinema Hypermarket Mini Majors Flagships Restaurants Food Court Line Shops DUBAI RETAIL MALL STOCK - Q1 217 GLA sq.ft. (Millions) Stock Expected - *Includes all retail malls with a GLA greater than 25, sq.ft. 2 21

12 Q1 217 Q1 217 HOSPITALITY SECTOR DUBAI HOTELS PERFORMANCE YTD HOTEL SUMMARY During Q1 217, over 1,6 rooms were added taking the total supply to over 14, rooms and apartments. Examples of the new hotel additions were Viceroy and Dukes on Palm, the Address Boulevard in Downtown and Lapita Hotel at Parks & Resorts. The government s decision to grant visa on arrival to Russian citizens and Indian nationals holding a valid US green card or visa could see a further increase in tourists from these countries. As per the directive, citizens of the Russian Federation are granted an entry visa for 3 days for the first time, renewable one time only for another 3 days while Indian nationals holding a valid US green card or visa with at least six months validity will get UAE entry visa on arrival with a validity of 14 days and an option for one time extension for the same period. The ADR s on an average have seen a year-onyear drop of 8-1% due to continued growth in new rooms and increasing competition from the Northern Emirates. However, growing focus is being taken by hoteliers to capitalise on the increasing, direct online room bookings and international tour bookings to help stabilise their market rates. Q1 217 has seen hotel revenues remaining flat despite rising occupancy, largely due to deflating ADR s and non-room revenues. With pressure on hotel revenues expected to persist across 217, hotel operators are shifting attention to tighten on operational expenses, enhance service standards and improve non-room revenues. AED 1,2 1, Jan-14 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-15 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-16 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-17 Feb Mar ADR RevPAR HOTELS - NEW SUPPLY Q1 217 Occupancy 1.% 9.% 8.% 7.% 6.% 5.% 4.% 3.% 2.% 1.% % HOTEL NAME LOCATION STAR DATE NUMBER OF KEYS The Address Boulevard Downtown 5 star Q Viceroy Palm 5 star Q Dukes Palm 5 star Q Lapita Hotel Parks & Resorts 5 star Q Occupancy DUBAI HOTEL ROOMS SUPPLY ( ) No. of Rooms ('s) Existing Supply New Supply Q1 217 Q2-Q SAMPLE OF UPCOMING SUPPLY HOTEL NAME LOCATION STAR DATE NUMBER OF KEYS Renaissance Downtown Business Bay 5 star Premium Rixos Palm 5 star Double Tree Business Bay 4 star Waldorf Astoria International Financial Centre 5 star

13 Q1 217 Q1 217 DEFINITIONS & METHODOLOGY RESEARCH STUDY AREA A collaborative team providing our integrated services The geographic extent of the study area covers the key districts in. RESIDENTIAL New residential developments are classified as delivered and thus entered into the new supply category when they are made available for occupation. This is verified via a combination of site inspections and discussion with the developer and hence our supply numbers do take into consideration the phased release of large projects. Rental and sales trend analysis is based on transactional data derived from the MPM Properties Agency team and data sourced from developers and owners. OFFICES New office developments are classified as delivered and thus entered into the new supply category when they are available for tenant fit-outs. incentives that may have been negotiated between the parties. The rents quoted are also exclusive of service charges. RETAIL New retail developments are classified as delivered and thus entered into the new supply category when the first units are open and trading. Our classification of malls is based on our own assessment having regard to size and the catchment area which the mall typically penetrates. HOSPITALITY New hotels are classified as delivered and thus entered into the new supply category when they are opened and trading. All trading performance data is provided by DTCM. FUTURE SUPPLY PROJECTIONS CHARLES ANDREW CHAMBERS CEO T: +971 () M: +971 () andrew.charles@mpmproperties.ae FRANK O DWYER MBA (Hons); BEng. COO T: +971 () M: +971 () f.odwyer@mpmproperties.ae YOUSEF AL ZAROONI Regional Head Al Ain T: +971 () M: +971 () yousef.alzarouni@mpmproperties.ae ABDULLAH SAID AL KUWEITI Business Development Director T: +971 () M: +971 () abdullahs@mpmproperties.ae VAIBHAV SHARMA MCOM; MDBA Chief Strategy Officer T: +971 () M: +971 () vaibhav.sharma@adib.com PAUL MAISFIELD BSC (HONS) MRICS Head of UK Real Estate T: +44 () M: +44 () paul.maisfield@adib.com Given the general lack of transparency in the local market rents quoted are headline rents, thus exclude any rent free period of other financial Our future supply projections across all sectors are based on a combination of regular site inspections and discussions with developers. VINEET KUMAR Director of Agency T: +971 () M: +971 () vineet.kumar@adib.com DOMINIC BARLOW Head of Retail, Hospitality & Leisure T: +971 () M: +971 () dominic.barlow@adib.com BESPOKE CLIENT RESEARCH ADDING VALUE TO YOUR PROPERTY INTERESTS The ADIB Real Estate Services team covers all sectors of the real estate market. We provide bespoke market research to our valued clients to meet their specific requirements. DISCLAIMER: The information contained in this report has been obtained from and is based upon sources that MPM Properties believes to be reliable, however, no warranty or representation, expressed or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. MPM Properties will not be held responsible for any third-party contributions. All opinions and estimates included in this report constitute MPM Properties, as of the date of this report and are subject We provide reports, information and presentations derived from primary market data that directly assist our clients to save or make money from real estate and shape strategies to enhance value. to change without notice. Figures contained in this report are derived from a basket of locations highlighted in this report and therefore represent a snapshot of the market. Due care and attention has been used in the preparation of forecast information. However, actual results may vary from forecasts and any variation may be materially positive or negative. Forecasts, by their very nature, involve risk and uncertainty because they relate to future events and circumstances which are beyond MPM Properties control. For a full in-depth study of the market, please contact MPM Properties team. ALI ABDULLAH ABDUL RAHMAN Acting Regional Head Northern Emirates T: 971 () M: +971 () aliabdullah@mpmproperties.ae WAHIDA KARAMA Head of Property Operations T: +971 (2) M: +971 () wahida.karama@mpmproperties.ae BALAJI NAGARAJ MSC MRICS Head of Residential Valuation & Northern Emirates T: +971 () M: +971 () b.nagaraj@mpmproperties.ae MOHAMMED FAHEEM Manager Strategic Advisory & Research T: +971 () M: +971 () mohammed.abdulfaheem@adib.com JUBRAN AL HASHMI Head of Property Services T: +971 () M: +971 () jubran@mpmproperties.ae MOHAMED AL ZOUBI Head of Development Advisory BSc Civil Engineering T: +971 () M: +971 () mohammedalzoubi@mpmproperties.ae 24 25

14 Q1 217 Q1 217 SUPPLY - PHOTO GALLERY NEW SUPPLY Q1 217 RESIDENTIAL SAMPLE OF UPCOMING PROJECTS Q1 217 RESIDENTIAL 1 VICEROY PALM JUMEIRAH 2 SAFEER 1 BUSINESS BAY 3 AL NABOODAH BLDG. ALL QUSAIS 4 DUBAI WHARF CULTURE VILLAGE 1 SUFOUH VILLAS, SUFOUH 2 RIAH TOWERS CULTURE VILLAGE 3 MANAZEL AL KHOR CULTURE VILLAGE 4 EMIRATES AIRLINES ACCOM. AL QUSAIS OFFICE OFFICE 1 EIFFEL 1 UM AL SHEIF 2 OFFICE BUILDING, UM AL SHEIF 1 NBAD OFFICE BLDG. AL JADDAF 2 OFFICE BUILDING, UM AL SHEIF 3 OFFICE TOWER, UM AL SHEIF 4 THE OPUS, BUSINESS BAY HOTEL HOTEL 1 VICEROY PALM JUMEIRAH 2 LAPITA HOTEL DUBAI PARKS & RESORTS 3 THE ADDRESS BOULEVARD DOWNTOWN DUBAI 4 DUKES DUBAI PALM JUMEIRAH 1 ALOFT PALM JUMEIRAH 2 DOUBLE TREE BUSINESS BAY 3 RENAISSANCE DOWNTOWN DUBAI 4 RIXOS PREMIUM JBR RETAIL 1 NAKHEEL MALL, PALM JUMEIRAH 2 WEST VILLAGE AL FURJAN 3 THE POINTE PALM JUMEIRAH 4 PAVILION BADRAH RESIDENCE 26 27

15 Q1 217 Q1 217 Q4 216 NEW SUPPLY Residential Offices Retail Hotels UNDER CONSTRUCTION Residential Offices Retail Hotels Jebel Ali Port Al Mamzar 4 Jebel Ali Freezone Barsha Heights Al Qusais TO ABU DHABI 28 29

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