Dubai Abu Dhabi Real Estate Market Overview Q4 2013
Market highlights Q4 2013 The prime residential market continued to witness growth in the fourth quarter of 2013, while the retail, hospitality and prime office sectors all remained relatively stable and poised for future recovery. Despite a general over supply in the residential and office sectors, there remains a shortage of high quality stock. This is driving product differentiation and creating two-tier performance between high grade and low grade property. Short-term demand will be fuelled by investment and job growth from new major construction projects (such as the Airport expansion, Etihad Rail, the Saadiyat Island museums and other major infrastructure, economic and social development initiatives), combined with general improvements to market sentiment. Long-term market recovery will be dependent on the government s ongoing initiatives to diversify the economy and generate sustainable new employment growth and many of these initiatives remain work-in-progress. A sustainable recovery also requires the government to implement further supply controls, as a key trend during 2013 has been developers re-looking at schemes that had been placed on hold following the market downturn. We expect significant new construction starts in 2014. There were a number of major completions in the office market this quarter, including Capital Tower at Capital Centre, the World Trade Centre building on Hamdan Street and the Landmark Tower on the Corniche. In spite of 140,000 sq m of new office supply, vacancy rate increased from 38% to 39% reflecting improved market absorption of new supply. Grade A office rents have remained unchanged while Grade B rents decreased slightly by 2%. Significant additions to supply are expected in 2014 that will continue to place downward pressure on rents for secondary space. The leasing of Abu Dhabi s prime scheme Sowwah Square remains on hold as the government progress plans for a financial freezone on Al Maryah Island. Residential stock increased by around 4,400 units in Q4, bringing the total stock in locations monitored by Jones Lang LaSalle to around 218,000 units. Additions to supply included units at Saadiyat Beach and Al Reef. Sales prices for residential units witnessed a 6% increase in Q4 2013 resulting in a total annual increase of 25% during 2013. This increase has however been limited to prime projects and does not represent a general increase across the whole market. Prime residential rents also increased by 8% during Q4 resulting in an annual increase of 17% during 2013 to reach AED 140,000 (average rent for a prime 2 bedroom apartment) but once again this increase only applies to prime product. Retail stock increased by approximately 67,000 sq m of GLA this quarter with the delivery of the World Trade Centre Mall on Hamdan Street and the Eastern Mangroves Promenade retail complex. Average line store retail rents remained unchanged this quarter at AED 2,887 / sq m per annum for malls on Abu Dhabi Island and at 1,990 / sq m per annum for malls outside Abu Dhabi. While the hotel sector continues to witness new completions, the market is approaching recovery, with occupancies increasing to 67% (during the first eleven months of 2013) and RevPAR up by 7% compared to YT November 2012. Occupancies are at their highest level since 2008 and while ADR s have continued to be under pressure over the past year, 2014 is expected to register an increase in average performance as demand increases and the level of new supply moderates. 2
Talking points Q4 2013 The Executive Council has removed the 5% rent cap for properties in Abu Dhabi. This means that landlords will now be able to raise annual rents by more than 5%, depending on supply and demand conditions in the real estate market. This will undoubtedly have a major impact on the residential rental market, particularly for older stock, as the market adjusts to the removal of this price control mechanism. More than 1,400 eligible Emirati families have been issued the final approval for new homes. This approval coincided with celebrations of UAE s 42 nd National Day in December. In an attempt to reduce the level of leverage and increase equity in property investments, the Central Bank of the UAE has issued a new set of regulations on mortgage lending: For properties below AED 5 million in value, the maximum loan will be 80% of the value of the property for UAE nationals and 75% of the value of the property for expatriates. For property with a value in excess of AED 5 million, the loan eligibility shall be 70% of the value of the property for UAE nationals and 65% of the value of the property for expatriates. For a second house or investment property, UAE nationals will be eligible for a mortgage up to 65% of the value of the property, while the maximum loan for expatriates is 60% of the property s value. For properties purchased off plan the mortgage limit is set at 50% regardless of the purpose, value or category of the purchaser. Work has commenced on the first segment of the Louvre Abu Dhabi s iconic dome. The dome will feature 85 segments which will be assembled offsite. The Louvre Abu Dhabi has also been granted the Green Building Award for its sustainable design and environmental excellence. TDIC has received the Blue Flag award for beach quality within three of its developments, Saadiyat Beach, Sir Bani Yas Desert Island and Al Bateen Wharf in Abu Dhabi. The Blue Flag is a prestigious recognition awarded to beaches that follow strict criteria regarding water quality, environmental management and site facilities. Cranleigh Abu Dhabi, the first school campus on Saadiyat Island has opened for admissions for the 2014/2015 academic year. Etihad Rail announced the signing of a Memorandum of Understanding with SNTTA Cargo, a leading freight and logistics provider. In addition to moving goods in containers, SNTTA is exploring the possibility of using the rail network for the shipment of cars and light trucks. Arabtec, the UAE s largest contractor, has set up a property development arm to take advantage of the current market upswing. Arabtec Real Estate Development Company will start building homes in Abu Dhabi and Dubai, with plans to expand further into the GCC countries and the Middle East. Talks are underway between Abu Dhabi Airports Company (ADAC) and the Department of Transport (DOT) to provide road and railway connectivity to the new Midfield Terminal project. While the announcement of the Dubai Expo 2020 is expected to have a positive long term impact on the economy and therefore the real estate market across the UAE, the only effect on the Abu Dhabi market in 2014 is likely to be its contribution to an improvement in sentiment. 3
Abu Dhabi prime rental clock Q4 2012 Q4 2013 Rental Growth Slowing Rents Falling Rental Growth Slowing Rents Falling Rental Growth Accelerating Rents Bottoming Out Rental Growth Accelerating Rents Bottoming Out Retail Residential Office Hotel * *Hotel clock reflects the movement of RevPAR. Note: The property clock illustrates where Jones Lang LaSalle estimates each prime market is within its individual rental cycle as at end of the relevant quarter. Source: Jones Lang LaSalle 4
Abu Dhabi office market overview
Office supply A total of 140,000 sq m was added to the office stock in Q4 with major deliveries including Capital Tower at Capital Centre, the World Trade Centre office building on Hamdan Street and the Landmark Tower on the Corniche. On the mainland, tenants have started moving into the newly completed Courtyard Building at Masdar City this quarter. Total office stock within Abu Dhabi stands at approximately 3.1 million sq m GLA at the end of 2013, with around 216,000 sq m of office GLA added during 2013. Major completions earlier in the year include ADIC HQ, Nation Towers and Al Bustan Complex. Some major projects that were initially planned to be handed over in 2013 have been rescheduled for 2014. These include the ADIB HQ on Airport Road, Finance House HQ at Capital Centre and the Siemens Building at Masdar City. As much as 824,000 sq m of office GLA could enter the market by the end of 2015, increasing the total office stock to approximately 3.9 million sq m. This new supply is primarily within master planned areas but also includes major corporate HQs such as ADNOC s new HQ on the Corniche. GLA (In 000's) Abu Dhabi Office Stock (2012 2015) 4,500 4,000 317 507 3,500 3,000 2,500 2,000 3,601 1,500 2,877 3,093 3,093 1,000 500 0 2012 2013 2014 2015 Completed Future Supply Source: Jones Lang LaSalle, Q4 2013 6
Recent and near term office completions ADIB HQ Landmark Tower World Trade Centre Finance House HQ Capital Centre Capital Tower Capital Centre Completed Q4 2013 Awaiting handover 7
Office demand Government-backed entities remain the principal source of demand. Some have committed to purpose built HQs such as ADIB and ADNOC, whereas others have leased space in private developments such as Finance House at Capital Centre and Al Bustan complex on Airport Road. There remains limited demand from the private sector, with most requirements for relatively small areas of between 300 sq m and 400 sq m. The lack of fitted out options in this size range is proving a real inhibitor to transactions. JLL estimate that approximately 64% of current office space is occupied by local government entities and state-owned-enterprises particularly within the financial services sector. Some office buildings have out-performed the market achieving high absorption rates with a significant increase in occupancy over the last two quarters of 2013. The continued flight to quality will place further pressure on secondary office buildings with general oversupply causing secondary rentals to continue to decline. Improved global and local economic conditions are expected to improve demand and market absorption rates during 2014. Office Floor Space Occupied by Nationality 30% International Regional Local 64% 6% Source: Jones Lang LaSalle 8
Office rental performance Average net effective rents for Grade A office space have stabilised for the last six quarters at AED 1,540 per sq m. However average Grade B office rents have declined by 2% this quarter to reach AED1,180 per sq m, a reduction of 9% during 2013. Grade A rents are expected to remain stable, however secondary rents are expected to decline further in 2014 as supply increases. Tenants will continue to be in a strong negotiating position, which is likely to strengthen as further deliveries take place in 2014. Average Grade A Office Rents* (Q4 2008 Q4 2013) 4,000 3,800 The vacancy rate has increased by 1% this quarter to reach 39%. Although major new deliveries during Q4 added a significant level of office space, the vacancy rate increased by only 1% as some existing buildings achieved higher occupancy rates. The recently completed Trade Centre was preleased to Arabtec before being handed over, which helped offset the increase in the vacancy rate, although some of this space will be offered for sublease. Vacancies are expected to increase further in 2014 as handovers continue. Rents and vacancy trends are expected to continue to diverge in 2014, increasing the performance gap between prime and secondary buildings. Average Rents (AED/sq m) 3,500 3,000 2,500 2,000 1,500 3,190 3,000 2,800 2,800 2,500 2,200 2,200 2,000 1,900 1,850 1,750 1,700 1,700 1,600 1,540 1,540 1,540 1,540 1,540 1,540 1,000 Q4 Q1 Q2 2008 2009 2009 * Average Grade A Effective rents Source: Jones Lang LaSalle, Q4 2013 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 9
Office market summary Indicator Level Comment / Outlook Current Office Stock 3.0 million sq m The majority of existing office space is Grade B and Grade C by international standards but this proportion is changing in line with the high quality additions to the market. Future Supply (by end 2015) 824,000 sq m The proportion of Grade A office space is increasing significantly as new stock is delivered to the market. Current Vacancy Rate 39% Vacancy rate increased by 1% this quarter and is expected to rise further as new supply is added in 2014. Average Grade A Rent AED 1,540 per sq m per annum Grade A rents have remained stable for the last six quarters and are expected to remain stable in 2014. Average Grade B Rent AED 1,180 per sq m per annum Grade B rents decreased slightly this quarter and are expected to decrease further in 2014. 10
Abu Dhabi residential market overview
Residential supply Approximately 4,400 residential units were delivered in Abu Dhabi during Q4. The majority of these units were within Oceanscape and Gate Tower 1 on Reem Island, Al Bustan Complex on Airport Road, the Landmark Tower on the Corniche and the Danet Building by Darwish Bin Ahmed & Sons in Danet Abu Dhabi. Further units were also delivered within the Saadiyat Beach Residences and Al Reef Downtown projects. Within the villa market, Aldar has announced that the first phase of its Al Ghadeer development (near the Dubai border) is now being handed over to owners. Musanada has announced the completion of the Watani national housing development, with villas now being handed over to UAE nationals. Abu Dhabi Residential Stock (2012 2015) These deliveries bring the total residential stock in areas monitored by JLL to approximately 218,000 units, with around 11,600 units added during 2013. An additional 22,000 units are scheduled to be delivered to the market in 2014 although many of these are likely to experience further delays. The majority of this additional supply will be located within masterplanned areas such as Reem Island, Saadiyat Island, Danet and Rawdhat. There are also a number of units scheduled for handover in 2014 within National Housing communities including Al Falah and Watani developments. Residential Units at the end of 2013 Number of Units (In 000's ) 300 250 200 150 100 50 22 206 218 218 11 240 72% 28% Villa Apartment 0 2012 2013 2014 2015 Completed Future Supply Source: Jones Lang LaSalle, Q4 2013 Source: Jones Lang LaSalle, 2013 12
Recent and near term residential completions 6 Oceanscape Reem Island Saadiyat Beach Residences Al Reef Downtown (phase 5) Al Ghadeer Development Watani Development Reem Diamond Reem Island Darwish Bin Ahmed & Sons Building- Danet Danet Tower by Bloom - Danet Al Bustan Complex The Gate Tower 1 Reem Island Landmark Tower World Trade Centre 3 Completed Q4 2013 Awaiting handover 13
Residential performance sales price During the fourth quarter of 2013 average residential sales prices within Investment Areas have increased by 6% to reach approximately AED 12,800 per sq m reflecting an increase of approximately 25% during 2013. Asking prices have increased for both apartments and villas, to AED 15,200 per sq m and AED 11,000 per sq m respectively. These increases are limited to prime buildings within Investment Areas and do not represent a market-wide recovery. Price growth has not been witnessed elsewhere. Sales Price* of Residential Units (Q4 2009 Q4 2013) The growth in sales prices and transaction volumes in Q4 and 2013 more generally, can be attributed to a variety of factors including: - Both Abu Dhabi and Dubai are benefiting from the UAE s status as a safe haven following political unrest in the wider region; - Limited stock available for purchase within high grade schemes; - Expectations of further price growth following the Expo 2020 announcement; - The removal of the previous 5% rent cap, providing an opportunity for investors to achieve higher rents; - Greater levels of job security post and confidence; - Continued improved sentiment across the UAE, further accentuated by the Expo 2020 announcement. Prime Sales ('000 AED/sq m) 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 17,222 Q4 2009 15,070 Q1 2010 13,455 Q2 2010 *Asking prices Source: Jones Lang LaSalle, Q4 2013 Note: Sales prices pertain to Investment Areas only. 11,840 11,840 11,840 11,840 Q3 2010 Q4 2010 Q1 2011 Q2 2011 11,000 11,000 10,900 10,500 10,200 10,200 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 11,000 11,500 12,100 12,800 Q1 2013 Q2 2013 Q3 2013 Q4 2013 14
Residential performance - rents Average asking rents for prime two bedroom apartments have increased 8% this quarter, to reach AED 140,000 per annum. This continues the trend seen earlier in the year, with average prime rents achieving an annual increase of 17% during 2013. Demand remains strong due to a variety of factors including: - Government spending initiatives leading to job growth such as the Airport Expansion, the Etihad railway and the museums on Saadiyat Island amongst other projects; - Government incentives to increase demand such as the decision to limit housing allowances to those employees living in Abu Dhabi; - Smaller rental differential between Abu Dhabi and Dubai as rents in Dubai continue to increase. 231 240 Average Rent ('000 AED per annum) 220 200 180 160 140 120 100 188 Q3 2008 Q4 2008 198 Q1 2009 *Asking rents Source: Jones Lang LaSalle, Q4 2013 180 Q2 2009 170 168 Q3 2009 Q4 2009 163 Q1 2010 153 150 Q2 2010 Q3 2010 145 Q4 2010 While high quality developments have performed well in 2013, secondary stock has been affected by major increases to supply, with rents continuing to decline as people move to newer developments. This divergence in performance is expected to continue in 2014, with prime developments (those that are well located with efficient designs, quality management and providing high quality amenities and facilities and sufficient parking) achieving a premium to the market average. The removal of the rent cap could potentially cause an increase in rents in the short to medium term before rental levels normalise. Average two-bedroom Rents* (2008 Q4 2013) 140 140 Q1 2011 Q2 2011 135 135 Q3 2011 Q4 2011 126 Q1 2012 121 120 120 Q2 2012 Q3 2012 Q4 2012 130 130 130 Q1 2013 Q2 2013 Q3 2013 140 Q4 2013 15
Residential market summary Indicator Level Comment / Outlook Current Residential Stock Future Supply (by end 2015) 218,000 units 33,000 units Good quality residential stock is set to increase further in 2014 with the delivery of additional units within major schemes such as Saadiyat Island and the Gate Towers on Reem Island. Concentrated within master developments such as Rawdhat, Danet, Reem Island and Saadiyat Island in addition to sizeable National housing developments. Average Prime 2 Bed Apartment Rent AED 140,000 per annum Rents for prime apartments increased this quarter and are expected to increase further in 2014. Average Prime 2 Bed Apartment Sale Price Average 3 Bed Villa Rent AED 15,200 per sq m AED 170,000 per annum Sale prices for 2 bedroom apartments continued to increase in selective projects, particularly in investment areas, albeit not market wide. Rents for 3 bed villas remained stable this quarter and are expected to remain relatively stable in most locations 16
Abu Dhabi retail market overview
Retail supply Total retail supply across the Abu Dhabi metropolitan area stands at approximately 1.96 million sq m at the end of 2013, with 193,000 sq m of retail GLA added to the market in 2013. Retail stock increased by around 67,000 sq m in Q4 2013 with the delivery of the World Trade Centre Mall on Hamdan Street which has introduced some new brands to the Abu Dhabi market including House of Fraser as a department store anchor which opened its first store outside of the UK and Ireland. A number of retail centres within mixed-use developments have also been delivered this quarter, including the Eastern Mangroves Promenade retail complex. French supermarket chain Géant opened its second store in Abu Dhabi this quarter within Marina Square on Reem Island. Further deliveries are scheduled for 2014 with approximately 388,000 sq m of retail GLA expected to enter the market by the end of 2014. This includes Yas Mall on Yas Island, Capital Mall within the 9712 BMC and Nation Towers on the Corniche. GLA in '000s sq m Abu Dhabi Retail Stock (2012 2015) 3,000 2,500 388 59 2,000 1,500 1,000 2,350 1,770 1,962 1,962 500 0 2012 2013 2014 2015 Completed Future Supply Source: Jones Lang LaSalle, Q4 2013 In addition to these new malls, a number of further retail centres within mixed-use developments are expected to enter the market in 2014. These include retail space within Al Reef Community, Saadiyat Beach and Nation Towers. Recent announcements of new super regional malls such as Sowwah Central, Saadiyat Mall / The District and Reem Mall togeter with the planned Marina Mall extension could increase the retail supply in Abu Dhabi substantially by 2017. 18
Recent and near term retail completions Yas Mall WTC Mall Central Market Capital Mall Nation Towers Completed Q4 2013 Awaiting handover 19
Retail performance Continuous growth in retail spending (derived from both the resident population and higher tourism levels), is supporting demand for additional retail space in Abu Dhabi. Average rents in retail centres on Abu Dhabi Island have remained stable this quarter at AED 2,887 / sq m per annum, average rents of retail centres outside Abu Dhabi Island have also remained unchanged at AED 1,900 / sq m per annum. Vacancies remain minimal within established centres on Abu Dhabi Island, such as Marina Mall and Abu Dhabi Mall. Vacancies are much higher in newly completed centres, with some opening with significant levels of vacant space. While there are a number of large malls in the supply pipeline, the majority are expected to materialise between 2017 and 2018. This additional supply could however cause rents to soften in the short to medium term as developers compete to secure the best retailers. Rental Rates: Regional and Super Regional Malls - Abu Dhabi Retail Rental Performance* (Q4 2008 Q4 2013) 3,500 F&B (AED / sq m) Casual Dining: 2,000 to 3,000 Food Court: 2,500 to 4,500 Line Shops (AED / sq m) 1,500-4,000 Anchor (AED / sq m) 500-1,500 Kiosk (AED/per annum) 60,000 to 180,000 Retail Rent (AED/sq m/annum) 3,000 2,500 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Source: Jones Lang LaSalle, Q4 2013 *Average retail rents for line shops in regional and super regional malls on Abu Dhabi Island Source: Jones Lang LaSalle, Q4 2013 20
Retail sector summary Indicator Level Comment / Outlook Current Retail Space (GLA) 1.96 million sq m The proportion of high quality retail is increasing as a percentage of total GLA. Additional Supply (by end 2015) 446,000 sq m There is a significant of new retail space expected to open by the end of 2015, although some delays are expected. Current Vacancy Level (Regional and Super Regional malls on Abu Dhabi Island) 2% The vacancy rate is expected to remain stable at 2% in established malls on Abu Dhabi Island, with significantly higher rates in newer decentralised schemes. Average Rents (Regional and Super Regional malls on Abu Dhabi Island) AED 2,887 per sq m per annum Rents are expected to remain stable in the short term but decrease due to increased competition from new high quality malls in 2015. Average Rents (outside Abu Dhabi Island) AED 1,900 per sq m per annum Average rents have remained stable this quarter outside of Abu Dhabi Island and are expected to stabilise at current levels. 21
Abu Dhabi hotel market overview
Hotel supply The fourth quarter of 2013 witnessed the opening of Premier Inn Abu Dhabi International Airport, providing 300 additional rooms. Expected Future Supply (2012 2015) The Dubai-based hospitality company TI ME Hotels Management has also announced the opening of its first property in Abu Dhabi, TI ME Pearl Residence, on Khalifa Bin Zayed street adding 72 serviced apartments to total supply. These new openings have increased Abu Dhabi s hotel supply to around 18,500 rooms, with almost 2,000 rooms added during 2013. Major completions during 2013 include the St. Regis hotel on the Corniche, Ritz Carlton Grand Canal, Dusit Thani on Muroor Street and Rosewood on Al Maryah Island. No. of Rooms 30,000 25,000 20,000 15,000 10,000 5,000 16,500 2,400 18,500 18,500 3,300 20,900 Some hotel developments initially planned to open in 2013 have been rescheduled for 2014. These include the Millennium Executive Suites, Adagio Al Bustan, Capital Centre Arjaan by Rotana and Novotel Al Bustan. No new projects were announced during Q4 and many of the 5,700 additional rooms scheduled for completion by the end of 2015 may be delayed or cancelled following ADTCA s efforts to control supply by limiting new licenses. 0 2012 2013 2014 2015 Completed Future Supply Source: Jones Lang LaSalle, Q4 2013 If all the announced schemes do proceed on schedule, overall supply is expected to reach about 25,750 rooms by the end of 2016, representing a CAGR of 12% from 2013 levels. 23
Recent and near term hotel completions Premier Inn Abu Dhabi Airport Novotel and Adagio Al Bustan Complex Capital Centre Arjaan by Rotana Completed Q4 2013 Awaiting handover 24
25 Trading performance Abu Dhabi surpassed its goal of attracting 2.5 million tourists in 2013 by the end of November, showing an increase of 26% compared to the same period in 2012. In addition to attracting more visitors, Abu Dhabi saw an increased average length of stay, which reached 3.14 nights in YT November 2013. Occupancy levels increased to 67% during the first eleven months of 2013, this is 6 percentage points higher than for the same period in 2012. Heavy competition across the city has caused hotels to rely on rate reductions to attract guests, with average daily rates (ADR s) declining by 2% since the same period in 2012. Despite the decrease in average rates, the increase in occupancy helped to increase RevPAR by 7% compared to YT November 2012. The corporate and MICE (Meetings, Incentives, Conferencing, Exhibitions) segments continue to drive demand for hotels in Abu Dhabi, but leisure developments are expected to help increase the demand in 2014. The city plans to promote leisure offerings such as cultural facilities on Saadiyat Island and entertainment attractions on Yas Island. Hotel occupancies in Abu Dhabi are now at their highest level since 2008 and the market is poised to experience an increase in ADR s in 2014. ADR (AED) Hotel Performance 2010 2013 YT November 1,000 750 500 250 0 Source: STR Global 58% 65% 61% 2010 2011 2012 2013 ADR (AED) Occupancy 67% 80% 60% 40% 20% 0%
Hotel Sector Summary Indicator Level Comment / Outlook Current Hotel Room Supply 18,500 keys One internationally branded hotel opened in Q4 2013 the Premier Inn Abu Dhabi International Airport. Future Supply (by end 2015) 5,700 keys Some projects initially due for opening in Q4 2013 have been delayed and are expected to open early in 2014. These projects include Millennium Executive Suites, Adagio Al Bustan, Capital Centre Arjaan by Rotana and Novotel Al Bustan. No new projects were announced in Q4 2013. 2013 YTD Occupancy 67% Occupancy levels have witnessed a strong increase in YT November 2013. Abu Dhabi surpassed its goal of attracting 2.5 million guests in 2013 by the end of November. 2013 YTD ADR AED 545 ADR levels continued to fall, decreasing by 2% in YT November 2013 compared to the same period in 2012. Despite the ADR decrease, RevPAR saw a year-over-year increase of 7% because of the substantial increase in occupancy levels. 26
Definitions and methodology Residential: Residential buildings are considered handed over once they are ready for tenant occupation. This data excludes labour accommodation. Residential performance data is based on asking prices from a basket of selected developments. Retail: Retail space is considered handed over once it is open and operational. Classification of Retail Centres is based upon the ULI definition as published in Retail Development, 4th Edition published by ULI. Prime Rent Shopping Centre represents the top open market net rent that could be expected for a notional standard line unit shop situated in a specified shopping centre preferred in a inner city location, as at the survey date (normally at the end of each quarter period). Office: Office buildings are considered handed over once they are ready for tenant fit-outs. Average Grade A Office rents represent the average effective rents taken from a basket of selected buildings defined as superior in the current market. The Average Rent reflects values captured in occupational leases that is standard for the local market. It is an effective rent that accounts for rent free periods only (and not the financial impact of any other tenant incentive/s) and excludes service charges and local taxes. Hotels: Hotels are considered handed over once they are open and operational. Hotel room supply is based on existing supply figures provided by ADTCA as well as future hotel development data tracked by Jones Lang LaSalle Hotels. Room supply includes all graded supply and excludes serviced apartments. Hotel performance data is based on monthly survey conducted by STR Global on a sample of international standard midscale upscale hotels. 27
Contacts: David Dudley Head of Abu Dhabi Office david.dudley@jll.com Peter Stebbings Head of Valuation Advisory Abu Dhabi peter.stebbings@jll.com Chiheb Ben-Mahmoud Head of Hotels & Hospitality MENA chiheb.ben-mahmoud@jll.com Andrew Williamson Head of Retail MENA andrew.williamson@jll.com Barry McGettigan Senior Agent, Agency Abu Dhabi barry.mcgettigan@jll.com Craig Plumb Head of Research MENA craig.plumb@jll.com Dunia Joulani Senior Analyst Abu Dhabi dunia.joulani@jll.com Mai Hassan Research Assistant Abu Dhabi mai.hassan@jll.com twitter.com/ JLLMENA www.jll-mena.com youtube.com/ joneslanglasalle linkedin.com/company/ jones-lang-lasalle joneslanglasalleblog.com/ EMEAResearch COPYRIGHT JONES LANG LASALLE IP, INC. 2014 This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Jones Lang LaSalle IP, Inc. The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them. Jones Lang LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.