Property Review Real Estate Report Q4 2019 DUBAI | HISTORIC REVIEW

RECESSION RECOVERY AND GROWTH STABILISATION DOWNTURN 2009-2011 2012-2013 2014-2015 2016-2019

• The Dubai Real Estate market has gone through • The market began to show signs • The market peaked in Q2 2014 • 2016 and 2017 recorded a significant amount of new project launches significant fluctuations over the years. Following of recovery in 2012 when the and corrected thereafter due to and deliveries resulting in steady declines in Sales prices and Rental the introduction of a decree allowing International Euro Crisis and Arab Spring a combination of factors such rates. Whilst new project announcements eased off in 2018 and 2019, Freehold Ownership in 2002, the market recorded conflict led to Dubai being an as the reduction in LTVs, low oil additional supply continued to have a downward effect on rates. rapid growth up until Q1 2009. attractive alternative and ’safe’ prices and a strong US Dollar. haven to invest and live in. • The number and range of incentives increased as Landlords tried to • This period was marked by large scale developments • Rental rates remained broadly retain Tenants and increase take-up, whilst Developers tried to motivate and project launches. The Real Estate market was • In November 2013, Dubai was stable as the handover of Buyers. fuelled by both strong demand from a rapidly awarded to host Expo 2020, new supply was slower than expanding economy and workforce (leading to which led to growth in market anticipated. • A market driven by Tenants and Investors and an increased number double digit Rental growth and Investor returns) and, confidence, a rise in new project of people looking for value-for-money options resulted in affordable more problematically, Investor speculation. launches and increased Sales • Due to the substantial number developments outperforming luxury accommodation in terms of prices and Rental rates. of launches witnessed in the transaction activity. • With the onset of the global financial crisis, loss previous years, concerns of of confidence, erosion of capital and drying-up of • Whilst increased job security an oversupply and lack of • Developers increasingly offered smaller, off-plan units at lower price liquidity, speculators were driven from the market. and market confidence created demand particularly for high points with flexible post-completion payment plans, which resulted in an This resulted in significant value contractions demand for Tenants to upgrade, end properties motivated increase in first-time Buyers and End-users as home ownership became and ultimately the collapse of fundamentals rapid Rental growth also Developers to focus on the mid more accessible to people who were previously unable to jump on the underpinning the Real Estate market. restricted Residents to move and affordable housing sector, property ladder due to high down payments. within Dubai and thus resulted in and to offer incentives such as • Initially, this resulted in a drop in demand for completed properties, but • Asteco also recorded noticeable Tenant migration an upsurge in relocations to the extended payment plans during from neighbouring Emirates due to decreased Rental the slowdown in new project launches and the increased affordability led Northern Emirates in search of the post-completion stage. to a rise in transaction volumes in the secondary market . rates in Dubai. more affordable housing. • Lower deposits also made • Sales activity remained subdued although • In anticipation of the growing off-plan Sales a more attractive transaction levels picked up slightly by the end of Investor demand, the Dubai option compared to the 2011. Government doubled the minimum 25% down payment • Many projects were delayed, put on hold or land registration fee to 4%, required for a mortgaged cancelled. and introduced new loan-to- property. value rules to limit property 220 speculation. 200

180

160

140

120

100

Index Base 100 = March 2010 80

60

40 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 SepDec Mar Jun Sep Dec Mar Jun Sep Dec 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Apartment Sales Villa Sales Office Sales Apartment Rentals Villa Rentals Office Rentals The line graph above demonstrates the average percentage sales and rental trend on a quarterly basis.

2 Dubai Real Estate Report - Q4 2019 DUBAI SUPPLY

COMPLETED IN COMPLETED IN EXPECTED IN Q1 - Q3 2019 Q4 2019 2020

15,600 8,000 39,000 APARTMENTS NO. OF UNITS

4,700 2,700 10,600 VILLAS NO. OF UNITS

1.85 1.25 2.5 OFFICES MILLION SQ.FT.

3 Dubai Real Estate Report - Q4 2019 DUBAI HIGHLIGHTS AND OUTLOOK

2019 HIGHLIGHTS 2020 OUTLOOK

• A total of 31,000 Residential units were handed over in 2019, comprising • New supply for 2020 is estimated at close to 50,000 units and 2.5 million sq.ft. of SUPPLY* approximately 23,600 Apartments and 7,400 Villas, with communities such as Damac Office space, although, similar to previous years, some of this is expected to spill over Hills, Dubai Hills Estates and Akoya Oxygen accounting for the bulk of completions. into 2021. • The Commercial sector recorded the delivery of circa 3.1 million sq.ft. of new Office • We will continue to see project launches from Master Developers with space. construction-linked and post-completion payment plans. • Whilst construction activity for committed projects continued, the pace of new • Calls from industry leaders/experts for a short term curb on new projects in order to launches, particularly from secondary Developers, eased over 2019 in response to restore the supply-demand balance are expected to increase. lower demand and growing supply.

• Although Dubai’s Real Estate market continued to mature throughout 2019 in line • With more supply expected for handover in 2020, retention will become increasingly RENTAL RATES with increased transparency and improved regulatory conditions, Rental reductions important and can be achieved through competitive rates/incentives and remained commonplace in the majority of developments. proactive/professional Property Management. • However, these lower Rental rates also enabled more Tenants to upgrade in terms of • Nonetheless, further pressure on Rental rates across all asset classes is expected for size, quality and/or location. the year as economic uncertainties limit newcomers to the market. • Apartments, Villas and Offices recorded average declines of 11%, 10% and 12%, respectively.

• Apartment, Villa and Office Sales prices continued their downward trajectory during • Whilst Rental rates are expected to contract further, Sale price declines are likely to SALES PRICES 2019, declining by an average of 13% to 15%. ease in 2020, particularly for newly launched projects, as development costs are • Increased affordability opened the market to a wider Investor pool and facilitated a approaching the lowest practical level. rise in End-users and first time Buyers. • Secondary property prices are, however, expected to record additional drops. • Asteco noted a marked rise in enquiries with focus on affordable properties. • Developers, banks and other financial institutions will need to lower entry points to • In fact, according to Dubai Land’s Department (DLD) data, transaction volumes boost Sales. recorded an 11-year high in 2019.

* It is important to note that whilst a number of projects may have received completion certificates, Asteco does not consider a project delivered until the handover process has been initiated, or the units are available for lease in the open market.

SALES PRICES RENTAL RATES PROJECT LAUNCHES INCENTIVES SUPPLY DEMAND DEMAND TRENDS - OFF PLAN - COMPLETED

2019

2020

4 Dubai Real Estate Report - Q4 2019 DUBAI APARTMENT RENTAL RATES

(All figures in AED 000’s p.a.)

TYPE 1 BEDROOM 2 BEDROOMS 3 BEDROOMS

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2019

HIGH TO LUXURY END

DIFC - - 73 80 103 113 105 100 90 - 115 130 158 173 160 145 120 170 198 235 230 190 175 133 85 70 68 98 118 95 83 185 125 275 165 150 180 228 245 240 225 PALM 200 113 90 95 135 110 140 208 155 138 128 300 200 223 243 255 SHEIKH ZAYED ROAD 160 83 80 203 148 290 195 MID TO HIGH END

BUSINESS BAY 55 45 60 93 85 70 65 178 130 78 63 75 68 143 210 205 GREENS 120 65 58 75 88 78 JUMEIRAH BEACH RESIDENCE 115 108 168 163 193 JUMEIRAH LAKES TOWERS 110 50 58 133 153 AFFORDABLE

DEIRA 88 48 40 37 35 60 50 48 55 53 63 100 38 72 DUBAI SPORTS CITY 59 74 45 INTERNATIONAL CITY 70 44 27 23 24 43 46 40 35 30 39 38 JUMEIRAH VILLAGE 73 DUBAI AVERAGE 118 68 57 53 61 85 91 90 74 65 58 157 96 82 75 88 118 127 102 83 216 131 114 107 128 159 170 172 162 142 ANNUAL % CHANGE - -42% -16% -7% 15% 39% 7% -1% -6% -13% -12% -10% - -39% -14% -8% 16% 35% 8% 0% -7% -11% -9% 19% 24% 2% % CHANGE SINCE PEAK (2008) -51% -47% % CHANGE SINCE MARKET LOW (2011) 9% 11% 7% % CHANGE SINCE 2ND PEAK (2014) -36% -35% -33%

5 Dubai Real Estate Report - Q4 2019 AED persq.ft. DOWNTOWN DUBAI DISCOVERY GARDENS DIFC 6 0 ,0 ,0 2,000 1,500 1,000 500 0 1,300 1,225 900 700 750 1,000 2,050 1,350 1,525 1,700 1,900 2,200 2,325 2,200 1,300 1,100 1,300 1,400 2,700 525 650 800 855 850 885 825 450 450 500 550 1,250 1,300 1,425 1,650 1,750 1,700 1,875 1,875 1,350 1,300 1,500 1,600 2,700 900 975 1,175 1,300 1,210 2008 2009 2010 2011 APARTMENT DUBAI 2012 2013 2014 2,500 2015 2016 3,000 SALES PRICES 2017

2018 INTERNATIONAL CITY GREENS DUBAI SPORTS CITY DUBAI MARINA 0 ,0 ,0 2,000 1,500 1,000 500 0 450 550 650 700 700 710 675 350 325 425 500 1,050 900 1,050 1,250 1,350 1,365 1,375 1,400 950 775 825 1,050 1,700 600 725 850 900 950 975 825 600 550 550 700 1,600 1,000 1,125 1,250 1,450 1,600 1,750 1,900 1,050 925 1,000 1,100 1,800 2019 2,500 3,000

PALM JUMEIRAH JUMEIRAH VILLAGE JUMEIRAH LAKES TOWERS JUMEIRAH BEACH RESIDENCE 0 ,0 ,0 2,000 1,500 1,000 500 0 1,225 1,350 1,500 1,700 1,720 2,000 2,000 1,400 1,100 1,175 1,500 2,800 600 725 800 900 950 925 875 500 475 500 600 1,100 850 975 1,125 1,150 1,150 1,250 1,200 750 650 700 850 1,400 925 1,025 1,200 1,300 1,370 1,625 1,525 1,000 925 925 1,100 2,000 Dubai RealEstate Report- 2,500 Q4 2019 3,000 DUBAI VILLA RENTAL RATES

(All figures in AED 000’s p.a.)

TYPE 3 BEDROOMS 4 BEDROOMS 5 BEDROOMS

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2019

ARABIAN RANCHES 275 140 125 155 213 215 203 195 155 145 130 335 285 300 243 235 183 173 425 265 250 365 343 303 205 DUBAI SILICON OASIS (CEDRE VILLAS) - - 150 175 220 223 205 170 165 150 135 - 200 225 168 143 - 180 190 DUBAI SPORTS CITY (VICTORY HEIGHTS) - - 150 155 180 175 125 220 305 245 200 JUMEIRAH 325 160 190 163 150 400 185 253 170 450 225 200 310 230 195 JUMEIRAH PARK - 218 210 153 290 188 183 295 255 225 JUMEIRAH VILLAGE 90 125 160 120 95 110 178 125 108 145 208 160 140 MEADOWS 325 180 210 230 238 233 165 240 260 180 265 210 240 100 80 90 138 133 130 105 93 88 115 100 275 165 125 140 150 115 PALM JUMEIRAH 375 270 275 325 350 333 320 275 245 215 550 340 315 495 485 420 390 315 800 450 500 723 725 675 600 500 465 440 SPRINGS 250 105 140 135 123 THE LAKES 170 200 228 158 280 283 270 220 340 363 330 260 135 160 250 155 490 210 313 DUBAI AVERAGE 314 179 162 152 179 213 225 206 195 175 152 133 388 223 204 186 219 261 271 244 231 183 165 482 274 246 224 259 311 314 290 274 245 222 206 ANNUAL % CHANGE - -43% -9% -6% 18% 19% 5% -8% -5% -11% -13% -13% - -43% -9% 18% 4% -10% -10% -43% -9% 15% 20% 1% -6% -11% -7% % CHANGE SINCE PEAK (2008) -56% -58% -57% % CHANGE SINCE MARKET LOW (2011) -9% -7% -5% % CHANGE SINCE 2ND PEAK (2014) -38% -36%

7 Dubai Real Estate Report - Q4 2019 DUBAI VILLA SALES PRICES

AED per sq.ft.

0 500 1,000 1,500 2,000 2,500 3,000 0 500 1,000 1,500 2,000 2,500 3,000

2,200 1,100 850 600 750 500 750 475 950 550 1,225 850 1,150 975 1,000 950 1,150 850 1,100 750 JUMEIRAH VILLAGE ARABIAN RANCHES ARABIAN 950 650 825 575

1,000 2,200 700 1,000 550 850 475 850 500 1,000 725 1,300 850 1,350 825 1,150

800 MEADOWS 1,300 (CEDRE VILLAS)(CEDRE 750 1,200 725 1,000 DUBAI SILICON OASIS SILICON DUBAI 625 850

1,500 2,750 850 1,800 750 1,550 750 1,500 900 1,800 1,125 3,000 1,250 2,850 1,150 2,475 1,150 2,500 1,050 2,400 PALM JUMEIRAHPALM (VICTORY HEIGHTS)

DUBAI SPORTS CITY 925 2,100 800 1,900

1,500 1,800 725 850 650 650 550 650 800 900 1,175 1,100 1,175 1,075 1,100 950 SPRINGS 1,100 1,100

JUMEIRAH PARK 1,000 1,000 800 825 675 700

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

8 Dubai Real Estate Report - Q4 2019 DUBAI OFFICE RENTAL RATES

(All figures in AED per sq.ft. p.a.)

TYPE

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

BARSHA HEIGHTS (FORMER TECOM) 350 105 75 60 55 85 100 110 48 95 85 68 360 150 90 80 95 108 78 BUSINESS BAY - 70 100 103 88 75 65 DIFC 525 370 230 220 225 220 235 255 250 245 215 195 JUMEIRAH LAKES TOWERS 50 90 98 80 63 SHEIKH ZAYED ROAD 425 215 160 140 175 180 185 165 120 98 DUBAI AVERAGE 350 173 114 96 94 117 126 130 127 122 104 ANNUAL % CHANGE - -51% -34% -16% -2% 24% 8% 3% -4% -7% -12% % CHANGE SINCE PEAK (2008) -72% % CHANGE SINCE MARKET LOW (2012) 9% % CHANGE SINCE 2ND PEAK (2014) -25%

9 Dubai Real Estate Report - Q4 2019 BARSHA HEIGHTS AED persq.ft.

10 JUMEIRAH LAKES TOWERS DIFC BUSINESS BAY (FORMER TECOM) 0 ,0 ,0 2,000 1,500 1,000 500 0 975 825 750 750 850 1,100 2,500 600 675 800 850 975 1,075 925 550 550 650 900 2,000 1,350 1,500 1,650 1,900 1,925 1,875 1,800 1,700 1,800 1,900 1,900 4,250 725 875 1,000 1,250 1,250 1,225 975 700 750 900 1,250 2,200 600 725 800 900 975 2008 2009 2010 2011 OFFICE DUBAI 2012 ,0 ,0 ,0 4,000 3,500 3,000 2,500 2013 2014 SALES PRICES 2015 2016 4,500 2017 2018 2019 Dubai RealEstate Report- Q4 2019 DUBAI PROPERTY MAP

1 Bluewater Island 40 Jumeirah Village Circle 2 JBR 41 Dubai Hills Estate 3 Dubai Marina 42 Living Legends 4 Palm Jumeirah 43 Al Barari 5 Umm Suqeim 44 Meydan 6 Jumeirah 45 Harbour 7 Jumeirah Bay Island 46 Commercial District 8 City Walk 47 Golf District 9 Sheikh Zayed Road 48 Logistic District A 10 La Mer 49 Aviation District 11 Pearl Jumeirah 50 Al Maktoum 12 Bur Dubai International Airport 13 Dubai Maritime City 51 Expo 2020 52 Residential District 14 Port Rashid 15 Rigga 53 Dubai Investment Park 16 Deira 54 Green Community 17 Downtown 55 Dubai Production 18 City (IMPZ) 19 Discovery Gardens 56 Jumeirah Golf Estates 20 Jumeirah Park 57 Victory Heights 21 58 Dubai Sports City 22 Jumeirah 59 MotorCity Lakes Towers 60 Dubai Studio City 23 Springs / Meadows 61 Damac Hills T A 24 62 25 The Lakes 63 Mudon T 26 The Greens 27 Barsha Heights 64 Arabian Ranches 65 Dubailand (Tecom C) 28 66 The Villa 29 Business Bay 67 Liwan 68 Dubai Residence 30 Downtown Dubai Complex 31 DIFC 69 Dubai Silicon Oasis 32 Dubai Design District 33 Dubai Healthcare 70 International City City Phase 2 71 International City Phase 2 & 3 34 72 Al Warqaa 611 35 Dubai Festival City 36 Al Nahda 73 Mirdif 37 74 Uptown Mirdiff 75 Town Square 38 39 Jumeirah Village 76 Akoya Oxygen Triangle

11 Dubai Real Estate Report - Q4 2019 About Asteco

The Middle East’s largest full service Real VALUATION & ADVISORY SALES BUILDING CONSULTANCY Estate Services Company, Asteco was formed Our professional advisory services are Asteco has established a large regional The Building Consultancy Team at Asteco have in Dubai in 1985. Over the years, Asteco has conducted by suitably qualified personnel property Sales division with representatives a wealth of experience supporting their Clients gained enormous respect for consistently all of whom have had extensive Real Estate based in the UAE, Qatar and Jordan. Our throughout all stages of the built asset lifecycle. delivering high quality, professional, value- experience within the Middle East and Sales teams have extensive experience in the Each of the team’s highly trained surveyors added services in a transparent manner. It is internationally. negotiation and sale of a variety of assets. have an in-depth knowledge of construction also widely recognised for its involvement with technology, building pathology and effective Our valuations are carried out in accordance many of the projects that have defined the LEASING project management methods which enable landscape and physical infrastructure of the with the Royal Institution of Chartered Asteco has been instrumental in the Leasing us to provide our clients with a comprehensive Emirates. Surveyors (RICS) and International Valuation of many high-profile developments across the building consultancy service. Standards (IVS) and are undertaken by GCC. Asteco has an essential combination of local appropriately qualified valuers with extensive FRANCHISE knowledge and international expertise. local experience. ASSET MANAGEMENT Our brand, network, system and procedures A deeply established brand, renowned for Asteco provides comprehensive Asset are now available in territories across the its application of the latest technological The Professional Services Asteco conducts Management services to all property Owners, MENA region. Our Licensing services currently advances, its commitment to transparency, throughout the region include: whether a single unit (IPM) or a regional include Real Estate Brokerage Franchising and winning strategies and human expertise. mixed-use portfolio. Our focus is on maximising associated support services with many of the • Consultancy & Advisory services Undisputed Real Estate experts, Asteco value for our Clients. key elements designed specifically around represents a significant number of the • Market research the Franchisee, making it a truly unique and region’s top property Owners, Developers and • Valuation services OWNERS ASSOCIATION bespoke franchise opportunity. Investors. 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.

Elaine Jones John Stevens John Allen James Joughin Jenny Weidling Ghada Amhaz Tamer Ibrahim Chaaban FRICS MSc, BSc (Hons), MRICS BSc, MRICS BSc (Hons), MRICS BA (Hons) MSc BE Executive Chairman and Managing Director/ Executive Director - Senior Associate Manager - Research and Manager - Research and Associate Director / Founder / Director - Director - Asset Management Valuation & Advisory Director - Head of Valuations Advisory, Dubai Advisory, Abu Dhabi General Manager - Al Ain Transactional Services +971 4 403 7777 +971 4 403 7777 +971 4 403 7777 +971 4 403 7777 +971 2 626 2660 +971 3 766 6097 +971 4 403 7777 [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

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. 218551. Paid-up Capital AED 4,000,000. | ORN 180

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