REAL ESTATE SERVICES DUBAI REAL ESTATE MARKET OVERVIEW Q2 2017

Transcription

1 REAL ESTATE SERVICES DUBAI REAL ESTATE MARKET OVERVIEW Q2 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 Q2 217, c.5, new residential units were added, taking the new residential supply count to 1,9 units during the first half of the year. In total 7,8 apartments (71%) and 3,1 villas/ townhouses (29%) were added in H1 217, taking the total residential stock of to 57, units. Residential sales rates during the quarter recorded a marginal decline of 1.3% while year-on-year the decline was 5%. In terms of performance by location, Palm apartments recorded the highest drop of 9% year-on-year. Residential rents continue to soften as supply continues to supersede demand. Average rents dropped marginally by 1% quarter-on-quarter and 5% year-on-year. The rate of decline across villa properties was marginally higher than the apartments with average rents dropping by 6% year-on-year and 1% quarter-on-quarter. With rising vacancy levels, large landlords that own towers are becoming more open to offering incentives in the form of rent-free periods ranging from one to three months. Office During the quarter over 75, sq.ft. of office space was added, taking the total office stock to 9.8 million sq.ft. New office space that emerged includes Tamani Art Office tower in Business Bay and low-rise towers from Umm Al Sheif area. Looking at the ongoing construction activity, we expect c.2. million sq.ft. of office space to enter during the second half of 217. Valuation Agency Market research Property management Facilities management unchanged quarter-on-quarter. The Downtown recorded the highest yearly drop of 8% followed by Barsha Heights with 5%. Office rents remained unchanged from the previous quarter while year-on-year the rates dropped by 5%. Across the freehold areas, Barsha Heights recorded the highest decline of 8% year-on-year followed by Lakes Towers with 6% drop year-on-year. Retail During this quarter, the rents remained flat across all major malls while secondary mall operators are looking at rental negotiation to retain existing tenants and maintain their occupancy levels. All the major shopping centresr witnessed a boost in sales and footfalls, driven by the three day super sale event and extended mall hours during the Eid. The three day sales event not only attracted UAE residents but also tourists from neighbouring GCC countries. Hotel During Q2 217, over 1,7 rooms were added taking the total supply to over 16, rooms and apartments. Few of the new additions include Premium Rixos in Beach Residence, Double Tree in Business Bay and Rove Trade Centre. Year-on-year the ADR s remained flat while occupancy rates have risen by 2% year-on-year, as Eid holidays aided in recording strong occupancy rates. Looking at the exhibitions and events scheduled and promotions offered by the hotels, occupancy rates are expected to remain strong for the remainder of the year 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 Macro Trends 6 Residential Sector 8 Project Focus 1 Office Sector 16 Retail Sector 2 Hospitality Sector 22 Definitions & Methodology 2 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 212 Average office sale rates across freehold locations declined by 3% year-on-year, while the rates remained 2 3

3 Q2 217 Q2 217 DEMAND DRIVERS GOVERNMENT INITIATIVES TRANSPORTATION Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of and Chairman of the Executive Council, launched Smart 221 initiative. The Pulse, a new platform, will compile all available data to both public and private sectors and provide access to live data about the city for free of cost to public. Analysed data would be available at a fee for economic, academic, professional and commercial purpose. Electricity and Water Authority (DEWA) has awarded the contract worth AED28 million, to supply, extend and commission kilometer of water pipelines along Al Qudra Street and the to Al Ain highway, to increase waterflow capacity and provide water for future development projects in these areas. The project includes remote control and monitoring systems, to allow continuous control of the main water transport network through remote-controlled valves in the control centre. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of approved road works to improve Latifa Bint Hamdan Street and the junction of Umm Al Sheef and Latifa Bint Hamdan streets. The first phase of the project includes linking district with Al Khail road and the parallel roads to the First Al Khail and Al Asayel roads which is expected to be completed in H The second phase of the project includes improving the link between Sheikh Zayed road and to the West and land to the east, with expected completion date being Q International Airport handled 6.8 million passengers in June 217, up by 3.9% compared to 5.85 million passengers in June 216. During the first half of the year, passenger traffic increased by 6.3% to 3.5 million passengers, up from.51 million passengers during the same period last year. REAL ESTATE AND CONSTRUCTION Wasl Asset Management Group announced construction of Warsan project covering 16, sq.ft. of land with a built up area of 2.6 million sq.ft. The project comprises of 26 resort-style residential buildings to accommodate hospitality staff. The project is expected to offer 3,866 residential units comprising of 3,38 shared rooms, 36 studios, and 126 one bedroom units. It is further complimented by health club, swimming pools, sports facilities and green lawns and is expected to complete by October 22. AED1.5 billion construction award for the Palm Gateway project on Palm was awarded to Shapoorji Pallonji Mideast. The project, developed and owned by Nakheel Properties, includes construction of three residential towers, retail space and a beach club. The development includes 1,265 luxury apartments spread across three towers with units ranging from one to three bedrooms and parking over 1 levels. The residential units from the Gateway project will be offered on annual lease and the entire project is expected to be completed in 3 months. TOURISM INITIATIVES Figures from the Department of Tourism and Commerce Marketing ( Tourism) indicate a 1.5% rise in visitors to during June 217YTD versus the same period last year. During the period YTD June 217, had 8.6 million overnight visitors with 21% of the visitors originated from Western European countries, 19% from GCC countries and 18% from South Asia. In terms of top source market, India led with 1.5 million visitors followed by Saudi Arabia with.7 million visitors and the United Kingdom remained third with.63 million. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of launched Marsa Al Arab tourism project, which is valued at AED6.3 billion, developed by Holding and managed by Group. The project comprises of two islands located on either side of Burj Al Arab. One island will be dedicated to entertainment and family tourism while the other will include luxury resort. The development will also offer 3 waterfront residential apartments and 1 luxury villas along with commercial office and retail space. FREEZONES China National Petroleum Corporation (CNPC) has signed an agreement with Jebel Ali Free Zone (JAFZA) to establish its head quarter in JAFZA. The new headquarter covers 55, sq.m. and includes 1, sq.m. of office space along with warehouse facility for storage, maintenance and repair of oil and gas equipment. The new facility will also help in consolidation of 16 listed companies of CNPC to operate under one roof. International Financial Centre (DIFC) signed a memorandum of understanding with Economy to allow companies operating within DIFC to obtain licenses to operate in mainland. Under the MoU, a central data repository will be established, allowing data exchange between the parties, improving visibility and transparency of commercial activity within the DIFC. In addition, joint inspections will also ensure better compliance, prevent fraud and increase consumer protection. 5

4 Q2 217 Q2 217 MACRO TRENDS INVESTOR ANALYSIS DUBAI GDP SHARE BREAKDOWN BY ECONOMIC SECTORS YTD DUBAI LAND TRANSACTIONS VOLUME vs VALUE DUBAI LAND TRANSACTIONS QoQ% CHANGE 5% Wholesale & Retail Trade 19% 27% Real Estate & Construction Transportation & Communication Manufacturing 11% Financial Sector 13% Government & others 9% Hotels & Restaurants 16% Source: Statistics Center and MPM Properties Research Transactions 12, 1, 8, 6,, 2, Sales Value Sales Transactions * Established Real estate Source: DLD and MPM Properties Research 3, 25, 2, 15, 1, 5, Value (in Millions) Sales Transactions Source: DLD and MPM Properties Research DUBAI POPULATION (GROWTH & HOUSEHOLD SIZE) POPULATION (MILLIONS) Q2 217 Population 2.3 Source: Statistics Center DUBAI CONSTRUCTION ACTIVITY %YoY Growth Rate Household Size DUBAI CPI VS RENTAL CONTRIBUTION TO CPI Q2 217 GROWTH RATE (%PA) AND HOUSEHOLD SIZE 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 JUN 17 Housing CPI Contribution to CPI Source: Statistics Center TOP LOCATIONS - RESIDENTIAL TRANSACTION VALUE Transaction Value AED million 1, Emirates Living Downtown Marina Beach Residence Q1 217 Q2 217 Source: DLD Palm Arabian Ranches Lakes Towers Sports City Village Business Bay 6 7

5 Q2 217 Q2 217 RESIDENTIAL SECTOR RESIDENTIAL SUPPLY SAMPLE OF RESIDENTIAL UPCOMING PROJECTS LOCATION PROPERTY NAME During Q2 217, c.5, new residential units were added, taking the new residential supply count to 1,9 units during the first half of the year. In total 7,8 apartments (71%) and 3,1 villas/townhouses (29%) were added in H1 217, taking the total residential stock of to 57, units. Majority of the new supply during Q2 217 was completed within the freehold developments of Village Circle, land, Silicon Oasis, Marina and Production City while in the leasehold developments, most active location was Al Warqa. The off-plan residential market remained active during Q2 217 despite the holiday period. Over, residential units were launched during this quarter with 25% of these units being villas and townhouses and the remaining apartments. Some of the projects launched include Maple III, Vida Residence Mall and Downtown View tower 3 by Emaar Properties, Casa Viva by Properties, Bloom Towers in Village Circle by Bloom Properties, Bayz by Danube and Azizi Aura by Azizi Investments in Downtown Jebel Ali area. Culture Village Riah Towers Marina Continental Tower Studio City Glitz 1 Arjan Syann Park Silicon Oasis Emirates Airlines Towers Motor City OIA Residence Business Bay The Pad Looking at the ongoing construction activity, we anticipate further 9, new units entering the market during the second half of the year. SAMPLE OF ANNOUNCED PROJECTS IN Q2 217 NAME OF PROJECT TYPE DEVELOPER LOCATION The Pulse - Phase 3 Apartments South South RESIDENTIAL SUPPLY BY UNITS YoY 2.% 1.9% 3.1% 2.7% 3.1% 2.2% 1.8% 5.% H1 217 H Existing Supply Apartments Supply Villas +% Change % Kenda Stone Villa Villas Damac Akoya Oxygen Bloom Towers Apartments Bloom Village Circle Noor Townhouse Villas Nshama Town Square Downtown Views Tower 3 Apartments Emaar Downtown Azizi Aura Apartments Azizi Downtown Jebel Ali Bayz Apartments Danube Business Bay Aknan Villas Damac Akoya Oxygen Vida Residence Mall Serviced Emaar Downtown Maple III Villas Emaar Hills Estate Aurum Villa Villas Damac Akoya Oxygen Casa Viva Townhouse Properties Serena Eaton Place Apartments Ellington Village Circle 8 9

6 Q2 217 Q2 217 RESIDENTIAL SECTOR SALE PRICES RENTS Residential sales rates during the quarter recorded a marginal decline of 1.3% while year-on-year the decline was 5%. In terms of performance by location, Palm apartments recorded the highest drop of 9% year-on-year while in the villa segment Springs, Village and Arabian Ranches recorded the highest drop of 7% each yearon-year. Transactions of completed properties recorded a decline year-on-year both in value and volume terms. During Q2 217 a total of 2,73 transactions were recorded at a total value of AED.99 billion compared to AED5. billion in Q The transaction value dropped by 7.3% quarter-on-quarter. During the quarter, apartments accounted for 68% of the total transaction value, while villas and townhouses accounted for 32%. We are noticing an increase in transactions in both value and volume terms for villa properties over the past two years. Since 215, the market has witnessed the launch of several competitively priced villas and townhouses which is leading to increase in volume for villa transactions. The off-plan market remained buoyant with over, properties launched during Q2 217 with large concentration being in the land and South areas. However, as per the data from land Department, the value of transactions declined yearon-year from AED6.7 billion in Q2 216 to AED.8 billion in Q Historically, the market remains sluggish during the festive season which has resulted in drop in absorption rates despite lucrative offers from the developers. Residential rents continue to soften as supply continues to supersede demand. Average rents dropped marginally by 1% quarter-on-quarter and 5% year-on-year. As the developments that towards transforming existing tenants into owner residents complete, we are witnessing a shift in market dynamics with % of owner occupied residents increasing vs. % of tenant occupied units in. This in turn is leading to softening of rents across all locations. With c.9, units expected to complete during the course of the year, the rents are forecasted to soften further, with increased landlord incentives anticipated. The main leasehold areas of Bur, Al Barsha, Oud Metha and Al Nahda recorded over 7% decline year-onyear. Bur area recorded the highest decline with rates dropping by 9.3% year-on-year. One bedroom apartments which were achieving rents in the range of AED7,-85, per unit per annum in Q2 216 dropped to AED65,-75, per unit per annum in Q Similarly Al Barsha area recorded a decline of 7.9% year-on-year with the highest drop been across studio and two bedroom units. The rate of decline across villa properties was marginally higher than the apartments with average rents dropping by 6% year-on-year and 1% quarter-on-quarter. The four bedroom units recorded the highest drop of 7.25% yearon-year with the average rate dropping from AED2, per unit per annum in Q2 216 AED223, per unit per annum. With the expected handover of Arabian Ranches and Town Square developments, we anticipate the rates to deflate further during the course of the year. With rising vacancy levels, large landlords that own towers are becoming more open to offering incentives in the form of rent-free periods ranging from one to three months, no chiller charges and relaxed payment terms of to 12 cheques in order to reduce voids. AVERAGE APARTMENT ANNUAL RENTS Q2 217 APARTMENT AVERAGE SALES PRICES (Q2 217) AND PERCENTAGE CHANGE QoQ -1.2% -1.% -1.% -1.6% -1.6% -.% -1.6% -1.9% -1.2% YoY -6% -8% -3% -9% -6% -2% -% -% -1% LOCATION STUDIO 1BR 2BR 3BR Q-ON-Q Y-ON-Y Business Bay % -.91% DIFC % -6.57% Discovery Gardens % -5.5% AED/sq.ft. 2,5 2, 1,5 1, 5 2,25 1,8 1,75 1,5 1,5 1,375 1, ,21 Downtown % -6.83% Marina % -7.37% Greens % -5.69% International City % -7.2% Downtown Old Town DIFC Palm The Views Marina Business Bay Beach Residence The Greens Beach Residence % -3.17% Lakes Towers % -.6% Palm % -8.89% Barsha Heights % -.78% 1 11

7 Q2 217 Q2 217 RESIDENTIAL SECTOR AVERAGE VILLA SALE PRICE AED/ sq.ft. Q2 217 NON-INVESTMENT VILLA VALUES Q AED/sq.ft QoQ YoY 2,5 2, 1,5 1, 5.% -6.% 2,.% -.% 1,275-3.% -.% 1,1-3.% -7.% 1,75.% -2.% 1,75-2.% -7.% 1,25.% -7.% 95-3.% -3.% 975 AED (Million) Mirdif Al Barsha Umm Suqeim Al Warqa Low High Average Palm The Lakes Sports City Arabian Ranches Park AVERAGE VILLA ANNUAL RENTS Q2 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 BEDROOM 5 BEDROOM Q.O.Q Y.O.Y Al Furjan % -3.8% Bed 3 Bed 5 Bed Arabian Ranches % -6.99% Sports City % -6.35% Park % -8.62% Village % -6.77% Meadows % -6.52% Palm % -7.8% Springs % -6.7% Islands % -7.67% Golf Estates % -7.39% AED / Sq.ft. NON-INVESTMENT LAND VALUES Q , Mirdif Al Barsha Umm Suqeim Al Warqa Low High Average 12 13

8 Q2 217Q2 215 BAYZ TOWER Bayz Tower is located in Business Bay masterplan development in-close proximity to Downtown and Mall. The ground plus 29 floors project is being developed by Danube Properties and offers a total of 56 apartments comprising of studios, one, two and three bedroom units along with retail space on the ground floor. All the apartments are provided with white goods and furniture. The tower offers various sizes of apartments catering to a broad spectrum of investors from single occupants to families. Located in the heart of the city with easy access to major landmarks of Burj Khalifa, Mall, Meydan Race Course and the upcoming world s tallest deck AMENITIES AND FACILITIES Located in a development with well-developed infrastructure and community facilities; Modular kitchen; White goods and furniture; State-of-the-art Health Club with steam room and sauna; Swimming Pool with Jacuzzi; Zen zone for meditation and rejuvenation; Cabana; Barbeque area; Party Hall cum Air conditioned kid s play area UNIT TYPE AREA (SQ.FT.) STARTING PRICE (AED) Studio , One bedroom , Two bedroom 1,11-1,18 1,5, Three bedroom 1,365 1,8, PAYMENT PLAN 1% on booking plus DLD Registration & Oqood fees; 1% 6 days from booking date; 7% 12 days from booking date; 1% every month. (December 217 to December 223). 1 15

9 Q2 217 Q2 217 OFFICE SECTOR OFFICE SUMMARY OFFICE SALES During the quarter over 75, sq.ft. of office space was added, taking the total office stock to 9.8 million sq.ft. New office space that emerged includes Tamani Art Office tower in Business Bay and low-rise towers from Umm Al Sheif area. Looking at the ongoing construction activity, we expect c.2. million sq.ft. of office space to enter during the second half of 217. Average office rents dropped by 5% yearon-year while quarter-on-quarter the rates remained stable. The office rents across all the locations have bottom out and we do not expect a major shift in rental rates during the course of the year. Based on the projects announced/ launched/ under construction, it is estimated c.8. million sq.ft. of new office space to enter the market during the period However, we are noticing a shift in office supply from strata to single owned office towers. The majority of the future supply is single owned grade A space while the strata space expected from office projects launched during the peak of the market are nearing completion now. Average office sale rates across freehold locations declined by 3% year-on-year, while the rates remained unchanged quarter-on-quarter. The Downtown recorded the highest yearly drop of 8% followed by Barsha Heights with 5%. The office sale rates have bottomed out across all the freehold locations and have stabilized at these levels in the second quarter. The average sale rates in Downtown area are currently AED2,1 per sq.ft. as compared to over AED,5 per sq.ft. during the peak of the market. The majority of the enquiries during the quarter were for smaller office sizes of less than 2, sq.ft. which is also evident from the Land Department transaction data. In total c.335, sq.ft. of office space was transacted in Q2 217 at a total value of AED32.2 million as compared to AED536.3 million in Q1 217, recording a quarterly decline of 19% and 11.9% year-on-year. The majority of the transactions during the quarter were for office sizes measuring less than 1,5 sq.ft. accounting for 51% of the total transactions in value terms followed by office sizes in the range of 1,5-2,5 sq.ft. at 2%. In terms of transaction by location, Business Bay and Lakes Towers accounted for 78% of the total value of transaction with Business Bay accounting for AED217 million worth of transactions followed by Lakes Towers at AED119 million. Other areas which witnessed increase in transaction activity include Trade Centre AED3 million and Barsha Heights AED35 million. DUBAI OFFICE STOCK (28-219) Million sq.ft H1 217 Stock Expected H OFFICE RENTS The office market remained subdued during the quarter. Most leasing enquiries were largely from companies looking to consolidate and for smaller sized offices, with space less than 2,5 sq.ft. Office rents remained unchanged from the previous quarter while year-on-year the rates dropped by 5%. The CBD area which includes office towers along Sheikh Zayed road and Downtown recorded a year-on-year decline of 6% which was primarily due to migration of tenants from ageing buildings. Average rents in the area range from AED9-2 per sq.ft. per annum (all inclusive) dependent on the age and quality of the building. Across the freehold areas, Barsha Heights recorded the highest decline of 8% year-onyear followed by Lakes Towers with 6% drop year-on-year. The rates across all the office locations have bottomed out and we do not expect any significant changes in the rental rates in these areas during H

10 Q2 217 Q2 217 OFFICE SECTOR OFFICE AVERAGE SALE PRICES Q2 217 OFFICE RENTS AED/sq.ft. Q2 217 AED / sq.ft. QoQ YoY 2,5 2, 1,5 1, 5-1.% -8.% 2,75.% -3.% 1,75.%.% 1,75.% -2.%.% -3.% -1.% -5.% 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 9 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 2 /sq.ft. Satwa Al AVG. Wasl SALE = AED 2,75 /sq.ft. Burj Khalifa Business Bay The BUSINESS BAY Lagoons RENT = AED 65 - AED 1 /sq.ft. AVG. SALE = AED 1,5 /sq.ft. Al Marqadh Nad Al Sheba Karama Emirates Towers DIFC DIFC Oud Metha RENT = AED AED 3 /sq.ft. Za abeelavg. SALE = AED 1,75 /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 Q2 217 Q2 217 RETAIL SECTOR DUBAI RETAIL MALLS GLA BY AREA Q2 217 DUBAI RETAIL SUPPLY (PRE-21) 3% 3% 3% % 5% 5% 2% 3% 12% 17% RETAIL SUMMARY 6% 7% 8% 11% 11% 1% 23% 1% This quarter witnessed a boost in sales and footfalls across all major shopping centers, driven by the three day super sale event and extended mall hours during the Eid. The three day sales event not only attracted UAE residents but also tourists from neighbouring GCC countries. All the major malls reported long queues across the participating outlets for the three day sales event, while the secondary malls continue to struggle in attracting similar footfall levels. In terms of new retail suppy, only 37,5 sq.ft. of retail space entered the market, taking the total retail stock of to 3.5 million sq.ft. of Gross Leasable Area (GLA). With over 1 million sq.ft. of GLA under construction, s retail space is heading for a massive increase during the course of next three years which could have an effect on occupancy and footfall figures. During this quarter, the rents remained flat across all major malls while secondary mall operators are looking at rental negotiation to retain existing tenants and maintain their occupancy levels. Some of the secondary mall operators have starting revamping their retail mix, to ensure they are aligned to the market demand and prepared for the upcoming new malls and growing space in existing malls. In addition, there is increased pressure from the rapidly expanding online shopping platform, which is growing its market share of the overall retail spend in UAE. Deira - 2% Marina - 5% Business Bay - 1% Jebel Ali - 5% Barsha - 11% land - % Mirdif - 11% - 3% Al Warsan - 8% Al Wasl - 3% Bur - 7% Other Areas - 3% Al Quoz - 6% DUBAI RETAIL MALLS BY SIZE Q % 31% 15% Neighborhood - 17% Community - 12% Regional - 1% Sub-Regional - 23% Super Regional - 3% NEW SUPPLY DELIVERED 21-Q % 33% 16% 16% 2% 22% PRIME SHOPPING MALL AVERAGE RENTS Q2 217 AED/sq.ft. 1,2 1, Neighborhood - 22% Community - 15% Regional - 16% Sub-Regional - 16% Super Regional - 31% Neighborhood - 33% Community - 22% Regional - 2% Super Regional - 25% Anchors Cinema Hypermarket Mini Majors Flagships Restaurants Food Court Line Shops DUBAI RETAIL MALL STOCK GLA sq.ft. (Millions) H1 217 H Stock Expected - *Includes all retail malls with a GLA greater than 25, sq.ft. 2 21

12 Q2 217 Q2 217 HOSPITALITY SECTOR DUBAI HOTELS PERFORMANCE YTD HOTEL SUMMARY During Q2 217, over 1,7 rooms were added taking the total supply to over 16, rooms and apartments. Few of the new additions include Premium Rixos in Beach Residence, Double Tree in Business Bay and Rove Trade Centre. Tourist numbers continue to record a robust growth despite challenging economic environment and currency fluctuation. During H1 217 hotels welcomed 8.6 million guests as against 7.29 million guests during the same period last year, a growth of 1.6% year-on-year. The largest source market during H1 217 was India with 1.5 million guests followed by 7, guests from Saudi Arabia. Visa on arrival for Indian nationals holding US visa had a positive impact on the guest numbers. With foreseeable improvements with visa on arrival to Indians holding UK and EU residency visa will further boost guest numbers from India. Year-on-year the ADR s remained flat while occupancy rates have risen by 2% yearon-year, as Eid holidays aided in recording strong occupancy rates. Looking at the exhibitions and events scheduled and promotions offered by the hotels, occupancy rates are expected to remain strong for the remainder of the year. AED 1,2 1, Jan-1 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 Apr Jun ADR RevPAR HOTELS - NEW SUPPLY Q2 217 Occupancy 1.% 9.% 8.% 7.% 6.% 5.%.% 3.% 2.% 1.% % HOTEL NAME LOCATION STAR DATE NUMBER OF KEYS Rove Trade Centre Al Jaffliya star Q Premium Rixos Beach Residence 5 star Q Occupancy Double Tree Business Bay 5 star Q TRYP by Wyndham Barsha Heights 5 star Q Goldstate Hotel Al Jadaf 3 star Q DUBAI HOTEL ROOMS SUPPLY ( ) No. of Rooms ('s) H1 217 H SAMPLE OF UPCOMING SUPPLY HOTEL NAME LOCATION STAR DATE NUMBER OF KEYS Renaissance Downtown Waldorf Astoria Business Bay 5 star International Financial Centre 5 star Creek Rotana & Arjaan Deira star Bulgari Resort & Residences Bay Island 5 star Existing Supply New Supply 22 23

13 Q2 217 Q2 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: + () M: + () 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 2 25

14 Q2 217 Q2 217 SUPPLY - PHOTO GALLERY NEW SUPPLY Q2 217 RESIDENTIAL 1 SUFOUH VILLAS SUFOUH 2 NILOFAR TOWER CULTURE VILLAGE 3 MARINA ARCADE MANZEL AL KHOR CULTURE VILLAGE SAMPLE OF UPCOMING PROJECTS Q2 217 RESIDENTIAL 1 RIAH TOWERS CULTURE VILLAGE 2 MAYDAN RESIDENCES 1 MAYDAN 3 AZIZ FREESIA AZIZ DAISY OFFICE OFFICE 1 TAMANI ART, BUSINESS BAY 2 OFFICE BUILDING, UM AL SHEIF 3 OFFICE TOWER, UM AL SHEIF OFFICE TOWER, UM AL SHEIF 1 NBAD OFFICE BLDG. AL JADDAF 2 OFFICE BUILDING, UM AL SHEIF 3 OFFICE TOWER, UM AL SHEIF THE OPUS, BUSINESS BAY HOTEL HOTEL 1 TRYP BY WYNDHAM BARSHA HEIGHTS 2 RIXOS PREMIUM JBR 3 GOLDSTATE AL JADAF DOUBLE TREE BUSINESS BAY 1 BULGARI JUMEIRAH BAY ISLAND 2 PARK INN MOTOR CITY 3 RENAISSANCE DOWNTOWN DUBAI WALDORF ASTORIA DIFC RETAIL RETAIL 1 PAVILLION, JUMEIRAH ISLANDS 1 THE POINTE PALM JUMEIRAH 2 THE FIRST AVENUE MOTOR CITY 3 NAKHEEL MALL PALM JUMEIRAH PAVILION BADRAH RESIDENCE 26 27

15 Q2 217 Q2 217 Q 216 NEW SUPPLY Residential Offices Retail Hotels UNDER CONSTRUCTION Residential Offices Retail Hotels 2 3 Jebel Ali Port 3 Al Mamzar Jebel Ali Freezone Barsha Heights Al Qusais TO ABU DHABI

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