Abu Dhabi Real Estate Report Q4 2017

Transcription

1 Historic Review and Outlook Abu Dhabi Real Estate Report Q Property map 3 Historic Review 4 Highlights and Outlook In the Middle East for over 30 Years Apartment 5 6 Rentals Villa and Office Rentals 7 Apartment Sales 8 Villa and Office Sales

2 Property Map 1 Al Bandar Raha Beach 2 Al Bateen Wharf 3 Al Gurm 4 Al Maqtaa 5 Al Muneera Al Raha Beach 6 Al Nahyan Camp 7 Al Raha Gardens 8 Al Rayanna 9 Al Reef 10 Al Zeina Al Raha Beach 11 Baniyas 12 Bateen Airport Area 13 Bateen Area 14 Bawabat Al Sharq 15 Capital District (ADNEC) 16 CBD / Tourist Club Area 17 Corniche 18 Danet Abu Dhabi 19 Eastern Mangroves 20 Golf Gardens 21 Hydra Village 22 Khalidia / Al Hosn / Al Manhal 23 Khalifa City A 24 Khalifa City B 25 Maryah Island 26 MBZ City 27 Mina 28 Mushrif / Karama / Manaseer / Muroor 29 Officer s City 30 Rawdhat Abu Dhabi 31 Reem Island - Marina Square 32 Reem Island Najmat Abu Dhabi 33 Reem Island rest of Shams Abu Dhabi 34 Reem Island City of Lights 35 Reem Island The Gate District 36 Rihan Heights 37 Saadiyat Beach District 38 The Hills Most expensive Expensive Mid priced Affordable YAS ISLAND Note: Area classification by affordability is provided for indicative purposes only as most areas in Abu Dhabi offer various types of residential units, from affordable to high end. As such, the map colour coding takes into account the most prevalent type of product and exceptions of a lower and / or higher price could be available ABU DHABI

3 Historic Review Recession Recovery and Growth Stabilisation 2015 Downturn Rapid Real Estate demand growth in an undersupplied market was followed by substantial corrections in rental rates and sales prices, which dropped in excess of 60% from their peak in Q as a result of the global financial crisis. The decline in rental rates led to a strong leasing market with increased internal Tenant movement to quality properties. Transaction levels picked up towards the end of 2011 leading to take-up of new residential properties in well planned projects. However, with the amount of stock available, sales prices continued to decline. Subdued business growth put pressure on the office market resulting in decreased rental rates across all quality grades. 200 The market began to show signs of recovery in 2012 and rates stabilised throughout the year. Asteco recorded a marked increase in rental rates and sales prices from the end of 2012 due to improved sentiment. Several new prime and high-end projects were handed over during this period. As a result, rates for inferior quality stock advertised at above market averages corrected. Internal Tenant movement and flight-to-quality prevailed as people took advantage of the options available. Transaction levels improved in line with increased job security and market confidence leading to tenancy upgrades and a rise in home ownership. Off-plan sales also recommenced during 2013 and Residential sales prices rose considerably by approximately 50% compared to their lowest point. The office market was relatively stable, with lower quality space noting marginal declines whilst superior units recorded minimal increases. Limited new supply resulted in moderate increases in rental rates and sales prices in 2015, especially during the first half of the year and remained broadly stable thereafter. The drop in oil prices prompted a general slowdown in investment, whilst sales demand focused on completed rather than offplan properties. Bearish market sentiment, coupled with a number of major mergers and companies downsizing, had an unfavourable effect on Real Estate demand. As a result, apartment and villa rental rates recorded an average decrease of 17% and 12%, respectively, since the end of 2015, whilst sales prices declined by 13% and 8%. Approximately 5,000 units were delivered in 2016 and 2017, which put further pressure on rates. Whilst demand for completed projects declined, transaction volumes for newly launched projects offering competitive sales prices and payment plans increased Index Base 100 = March Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Apartment Sales Apartment Rentals Villa Rentals Office Rentals The line graph above demonstrates the average percentage sales and rental trend on a quarterly basis. Asteco Property Management,

4 Highlights and Outlook TRENDS Sales Prices Rental Rates Project Launches Incentives Supply Demand - Off-plan Demand - Completed 2017 Highlights 2018 Outlook Residential Limited economic growth continued to translate into job cuts, reduction of staff allowances and limited new employment opportunities. This, coupled with the increase in new supply, resulted in a drop in sales prices and rental rates across all asset classes. The decline was most prominent for high and mid-quality properties. Apartment rental rates recorded average quarterly declines between 2% and 3% during 2017, whilst q-o-q drops in sales prices ranged from 2% to 4%. Quarterly decreases in villa rental rates and sales prices were less pronounced and varied from 0% to 3% throughout the year. Whilst transaction activity for completed properties slowed compared with previous years, newly launched off-plan quality projects with attractive payment plans and discounts continued to benefit from strong demand. Rental rates and sales prices are expected to follow a similar path as in 2017 and record moderate declines as a result of the continuous delivery of new supply during a period of moderate economic and market growths. Approximately 9,000 residential units, including 6,200 apartments and 2,800 villas and townhouses are anticipated for completion this year, predominantly within the districts of Reem Island, Al Raha Beach and Yas Island. Based on previous years, the delivery of some of this inventory may be delayed until Off-plan quality projects offering attractive sales prices and payment plans will continue to benefit from good levels of demand and ultimately increase investment in the real estate sector. Office Bearish market sentiment in line with reduced business growth and low oil prices resulted in limited demand for office space. Rental rates softened by 5% on average compared to the same period last year. However, evidence indicated declines of up to 10% on contract renewal in several Grade A and B office buildings. Approximately 85,000 square metres of office space was delivered in 2017, mainly within Al Maryah Tower on Maryah Island and the mixed-use Leaf Tower on Reem Island. Additional office developments anticipated for completion in 2017 were delayed and are likely to be handed over in Investor demand remained restricted by the limited availability of projects offering commercial units for sale, with average quoted sales prices ranging from AED 900 per sq.ft. (ADDAX Tower) to AED 1,500 per sq.ft. (Sky Tower). The overall outlook for the office market is expected to be subdued, with further rental declines projected across all quality grades. Vacancy rates are likely to increase as companies continue to downsize and relocate to smaller units. The delayed Omega Towers on Reem Island and the ADIB HQ on Airport Road are expected for handover in The recently introduced value-added tax (VAT) of 5% on commercial property is anticipated to adversely affect overall demand and put pressure on rental rates and sales prices in the short- to medium-term. In the long-term, however, it is believed to improve the financial position of the UAE and provide the necessary funds to further the economy, which would result in business and employment growth. Supply 2,800 APARTMENTS 750 VILLAS AND TOWNHOUSES 85,000 SQ.M. OFFICE SPACE 6,200 APARTMENTS 2,800 VILLAS AND TOWNHOUSES 100,000 SQ.M. OFFICE SPACE 4 ABU DHABI

5 Apartment Rental Rates -3% (All figures in AED 000 s p.a.) TYPE 1 BEDROOM 2 BEDROOMS 3 BEDROOMS YEAR PRIME PROPERTIES Abu Dhabi Island Investment areas HIGH END PROPERTIES Abu Dhabi Island Central Abu Dhabi Corniche Khalidya / Bateen Investment areas Al Raha Beach Marina Square Saadiyat Beach Shams Abu Dhabi MID AND LOWER END PROPERTIES Abu Dhabi Island Central Abu Dhabi Corniche Khalidya / Bateen Investment areas Reef Downtown Off Island MBZ & Khalifa City A ABU DHABI AVERAGE Annual % change - -32% -15% -11% -2% 14% 8% 4% -7% -10% - -45% -3% -8% -6% 15% 8% 4% -6% -11% - -45% -1% -9% -9% 18% 8% 3% -9% -10% since peak (2008) -46% -51% -51% since market low (2012) 7% 7% 8% since 2nd peak (2015) -16% -17% -18% Note: The Abu Dhabi Average and resulting Percentage Changes are based on a wide selection of areas, not all of which are shown in this table. The Percentage Change (since peak, market low, 2nd peak) is calculated using the last quarter of the year for reasons of consistency in the table. However, this may not necessarily correspond to the actual quarter the market peaked/bottomed-out and marginal variations may occur. Asteco Property Management,

6 Villa Rental Rates -3% (All figures in AED 000 s p.a.) TYPE 3 BEDROOMS 4 BEDROOMS 5 BEDROOMS YEAR Khalidiya / Bateen Al Nahyan Camp / Muroor Mushrif / Karama / Manaseer MBZ / Mussafah Khalifa A & B Sas Al Nakhl Al Raha Gardens Golf Gardens Al Reef Saadiyat Beach Al Raha Beach Hydra Village ABU DHABI AVERAGE Annual % change - -38% -13% -14% -3% 6% 0% 2% -3% -6% - -41% -13% -9% 2% 3% 0% 2% -4% -7% - -43% -2% -12% 3% 4% 5% -3% -8% -9% since peak (2008) -57% -55% -55% since market low (2012) -2% -6% -11% since 2nd peak (2015) -9% -11% -16% Abu Dhabi Office Rental Rates Note: The Abu Dhabi Average and resulting Percentage Changes are based on a wide selection of areas, not all of which are shown in this table. The Percentage Change (since peak, market low, 2nd peak) is calculated using the last quarter of the year for reasons of consistency in the table. However, this may not necessarily correspond to the actual quarter the market peaked/bottomed-out and marginal variations may occur. * Includes developments such as Al Maryah Island, Aldar HQ, International Tower, Nation Towers, Ittihad Towers, Capital Plaza, Etihad Tower, etc. **Average Excluding Prime -1% (All figures in AED per sq.ft. p.a.) YEAR PRIME STOCK Fitted* QUALITY STOCK Fitted Shell and core MATURE STOCK Good quality Typical ABU DHABI AVERAGE** Annual % change - -32% -21% -16% -14% 0% 0% 3% -7% -6% since peak (2008) -66% since market low (2012) -10% 6 ABU DHABI since 2nd peak (2015) -13%

7 Apartment Sales Prices AED per sq.ft. -3% ,000 1,500 2,000 2, ,000 1,500 2,000 2,500 2,000 1,025 Marina Square 1,025 1, ,175 1,375 1,375 Reef Downtown ,000 1,025 1, , Raha Beach / Al Bandar 1,750 1,350 1,300 1,225 1,100 1,425 2,450 1,250 1,250 1,130 1,050 1,325 1,550 1,475 1,650 1,500 1,700 1,400 1,600 1,275 Sun & Sky Towers Raha Beach / Al Muneera 1,750 1, ,175 1,425 1,475 1,500 1,500 1,500 1,375 1,275 1,225 The Gate 1,175 Raha Beach / Al Zeina 1,750 1, , ,175 1,200 1,300 1,300 1, Asteco Property Management,

8 Villa Sales Prices AED per sq.ft. 0% ,000 1,500 2,000 2,500 3,000 3,000 3, ,000 1,500 2,000 2,500 3,000 3,000 3,500 Raha Gardens 1, , , , Hydra Village Golf Gardens 1, ,020 1, Al Reef Villas Saadiyat Beach Villas (Standard) 1,375 1,550 1,550 1,550 1, ABU DHABI

9 About Asteco The Middle East s largest full service Real Estate services company, Asteco was formed in Dubai in Over the years, Asteco has gained enormous respect for consistently delivering high quality, professional, valueadded services in a transparent manner. It is also widely recognised for its involvement with many of the projects that have defined the landscape and physical infrastructure of the Emirates. Asteco has an essential combination of local knowledge and international expertise. A deeply established brand, renowned for its application of the latest technological advances, its commitment to transparency, winning strategies and human expertise. Undisputed Real Estate experts, Asteco represents a significant number of the region s top property Owners, Developers and Investors. VALUATION & ADVISORY Our professional advisory services are conducted by suitably qualified personnel all of whom have had extensive Real Estate experience within the Middle East and internationally. Our valuations are carried out in accordance with the Royal Institution of Chartered Surveyors (RICS) and International Valuation Standards (IVS) and are undertaken by appropriately qualified valuers with extensive local experience. The Professional Services Asteco conducts throughout the region include: Consultancy & Advisory services Market research Valuation services SALES Asteco has established a large regional property Sales division with representatives based in the UAE, Qatar and Jordan. Our Sales teams have extensive experience in the negotiation and sale of a variety of assets. LEASING Asteco has been instrumental in the Leasing of many high-profile developments across the GCC. ASSET MANAGEMENT Asteco provides comprehensive Asset Management services to all property Owners, whether a single unit (IPM) or a regional mixed-use portfolio. Our focus is on maximising value for our Clients. OWNERS ASSOCIATION Asteco has the experience, systems, procedures and manuals in place to provide streamlined comprehensive Association Management and Consultancy services to residential, commercial and mixed-use communities throughout the GCC Region. SALES MANAGEMENT Our Sales Management services are comprehensive and encompass everything required for the successful completion and handover of units to individual unit Owners. LICENSING Our brand, network, system and procedures are now available in territories across the MENA region. Our Licensing services currently include Real Estate Brokerage Franchising and associated support services with many of the key elements designed specifically around the Franchisee, making it a truly unique and bespoke franchise opportunity. John Stevens MSc, BSc (Hons), MRICS Managing Director/ Director - Asset Services JohnS@Asteco.com John Allen BSc, MRICS Director - Valuation & Advisory JohnA@Asteco.com Derrick Maguire ARLA, NAEA Associate Director - Transactional Services DerrickM@Asteco.com James Joughin BSc (Hons), MRICS Associate Director - Valuation JamesJ@Asteco.com Jenny Weidling BA (Hons) Manager - Research and Advisory, Dubai JennyW@Asteco.com Ghada Amhaz MSc Manager - Research and Advisory, Abu Dhabi GhadaA@asteco.com Tamer Ibrahim Chaaban BE Branch Manager - Al Ain office TamerI@asteco.com DISCLAIMER: The information contained in this report has been obtained from and is based upon sources that Asteco Property Management 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. Asteco Property Management will not be held responsible for any third-party contributions. All opinions and estimates included in this report constitute Asteco Property Management s judgment, as of the date of this report and are subject 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 UAE market. Averages, however, represent a wider range of areas. Particularly exclusive or unique projects have been excluded from the data to avoid distorting averages. 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 Asteco Property Management s control. For a full in-depth study of the market, please contact Asteco Property Management s Research team. Asteco Property Management LLC. Commercial License No Paid-up Capital AED 4,000,000. ORN 180