Property. Mashreq. Economic Overview. Wealth Gauge.

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1 FOR THE PRIVILEGED FEW Mashreq Volume 12 August 20 Economic Overview As per National Bureau of Statistics, the economic growth in UAE for 20 stands at 5.2 which was well supported by Trade & Tourism, Hospitality and Real Estate. 70 of real Gross Domestic Product growth has come the non-oil based sector. One of the factors that led to GDP improvements in 20 was due to the development of oil output and good and stable oil price levels in the previous years. Central Bank expects the economic growth in UAE to remain strong which will be driven by non - oil based economy given the current oversupply of oil in global markets and the limited growth in oil production. On a broader scale UAE s economy is well supported by strong economic fundamentals. Tourism has been a major sector accounting for about 20 of GDP in 20 and is expected to grow anywhere between 7 to 9 through For the month of June 20 the overall Consumer Price Index (CPI) has reached , (indexed at 2007 = 100), the overall CPI has increased by 0.41 as compared to May. Top three contributors to the increase in the index for the first half of 20 are Education (+4.47), Furniture and Household Goods (+3.73) and Housing (+2.32). The average increase of prices were recorded at 1.91 as compared with the first half of year 20. ( Source: Based on data released by National Bureau of Statistics) Infrastructural Investments and spendings on account of Expo 2020 is on the rise and are in line with the spending plans. The work on the prestigious Dubai Canal Project has begun, 01

2 massive diversions are currently being worked out. Once completed the SZR flyover will rise 8 meters to allow navigation to the vessels round the clock. The hospitality sector has been more vibrant both in Abu Dhabi & Dubai. The Mall of the World announced recently is the talk of the town. Once the project is completed the Mall will be a city in itself which will include 100 hotels. Looking at the Occupancy rates, numerous hotels were also delivered. To name a few Marriott Hotel & Marriott Executive Apartments in Al Jaddaf, Pullman Hotel in JLT, Hyatt Palace in Deira, Sofitel Dubai Downtown, JW Marriott Marquis second tower, and InterContinental Marina were delivered. To streamline the buoyant hospitality sector, the Dubai s Department of Tourism & Commerce Marketing (DTCM) has introduced new laws on short term leasing. A homeowner cannot directly enter into an agreement with tourists for short term lease, they will now have to list the property with a licensed holiday home operator and lease it to the tourists. Real Estate Sector Highlights The Dubai Land Department (DLD) has recently announced that the Real Estate transactions increased by 4.6 to AED 1 billion in the first half of 20 as compared to AED 108 billion for the same period in 20. DLD has also announced that the prices has seen annual price growth slip 11.7 in Q1 20, to 6.3 in Q2 20, however DLD expects the prices to strengthen during the second half of the year. The Dubai Real Estate Institute (DREI) the educational arm of DLD has added six new courses to its training programme to help improve knowledge on the Dubai Real Estate market for all stakeholders. Various new Projects were launched by the Master Developers. Emaar announced the launch of Opera Grand at the Opera District at Downtown Dubai. Dubai Properties has launched Manazel Al Khor in Culture Village; Rahat Villas at Mudon and 200 new units at Remraam. Private Developers continue to join the bandwagon, Damac has launched 34 premium Fendi Villas at Akoya Drive. Two Hotel Apartments, The Vantage & The Constella, were launched in Village. Danube has launched its first project Dreamz which would consist of 171 townhouses in Al Furjan. 02

3 Mashreq Wealth Gauge At Mashreq we have been tracking the property prices by indexing them community wise on a scale of 100. On the basis of the Mashreq Price Indexing, the percentage over a period of time has been indicated both for Apartments and Villas for major communities. Mashreq Price Index as of end y 20 Location - Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- - in last 3 Months in last Aug- YTD Jan- Per Sq. Ft (AED) Arabian Ranches Burj Khalifa Tower Burj Dubai Downtown Business Bay DIFC Dubai Land Dubai Marina Greens International City Beach Residences Lake Towers Islands Park Village Old Town Burj Dubai Palm Springs/Meadows

4 Mashreq Wealth Gauge Contd. Apartments & Villas: The property prices for the month of y have dipped across all locations except for Business Bay which has seen a marginal increase of 0.2 as compared to previous month. The percentage in property prices over the last three months indicate a declining trend across all locations except for Downtown, Business Bay, DIFC, JBR & JLT where the prices are marginally holding up. Over a period of last 12 months (since Aug ) Prominent Villa Communities such as Village have witnessed an increase of 25 in property prices followed by Meadows & Springs which has witnessed an increase of 7. Apartments over a period of last 12 months (since Aug ) such as International City have witnessed a increase of 28.2 in property prices followed by Business Bay which has witnessed an increase of Price Watch Villa Price Trend Mashreq Price Index as of end June 20 Location Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun in last 3 Months in last Aug- YTD Jan- Arabian Ranches Islands Park Village Springs/ Meadows

5 Apartment Price Trend Mashreq Price Index as of end June 20 Location Burj Khalifa Tower Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun in last 3 Months in last Aug- YTD Jan- Burj Dubai Downtown Dubai Marina Beach Residences Lake Towers Outlook The Economic activity in UAE is vibrant and rate of growth will be gradual, the benefits will be spread over the long term. We expect the Hospitality Sector to reap major benefits on account of Expo. The price across all locations have stabilized. We expect this trend to continue for the next quarter. The rental yields on both Villas & Apartments remain attractive; we expect this to have a positive impact on demand for well established communities. The Real Estate Lending Sector will remain competitive, lower interest rate regimes will prevail. Scope for lowering the rate of interest further looks unlikely. 05