Property Review Real Estate Report Q2 2019 BUILDING The building consultancy team at Asteco have a wealth of experience and an in-depth knowledge CONSULTANCY of construction technology, building pathology and effective project management methods With you throughout all stages of your which enable us to provide our Clients with a comprehensive building consultancy service. built asset lifecycle

Technical Due Snagging Area Diligence Inspections Verification

Life Cycle Schedules of Schedules of Costing Dilapidations Condition

Project RERA Technical Building Monitoring and Reports Condition Audits Surveys

Defect Project Insurance Analysis Management Reinstatement For more details, please contact Valuation Nick Constantine, BSc (Hons) MRICS, Head of Building Consultancy [email protected] DUBAI MARKET OVERVIEW

SUPPLY RENTAL RATES SALES PRICES The significant volume of new supply recorded in Q1 2019 Continuing on from previous quarters, apartment and villa rental Similar to last quarter, residential sales price contractions were continued into the second quarter with the handover of 5,250 rates softened by 4% and 2% over Q2 2019, with annual declines more pronounced than those for rental rates with average apartments, 1,300 villas and nearly 500,000 sq.ft. of office space. settling around the 10% mark. quarterly and annual declines of 4% and 15% for apartments, and 5% and 14% for villas. Whilst the majority of this inventory is located in the new Vacancy rates are on the rise, particularly in the older properties, investment areas of Dubai Creek Harbour and Dubai Hills Estate as new supply continues to outperform population growth. Office sales prices recorded even more notable drops of 6% over (situated along Al Khail Road (E44)), established communities such the quarter and 18% compared to the same period last year. as also recorded additional stock in the form of In addition, as a result of the abundance of options available, Sparkle Towers, Orra Harbour Residences and The Residences at Tenant movement picked up with Residents seeking With the aim to attract a wider range of real estate Investors to Marina Gate (Tower 2). value-for-money options in the form of more the Emirate, the Dubai Land Department (DLD) recently affordable/competitive rates, improved incentives, larger units announced the launch of the Real Estate Investment The delivery of more than 750,000 sq.ft. of office space in Silicon and/or better quality specifications/facilities. Opportunities (REIOs) initiative, under which several investment Park (Dubai Silicon Oasis), which was earmarked for completion products will be offered including: this quarter, was further delayed, thus providing some relief in Q2 Interestingly, whilst apartment and office rental rates still remain 2019. approximately 15% above the 2011/12 market low, villa rents • Collective real estate investment funds; have, for the first time, dropped below that point, albeit, only • Partial title deeds procedures; Despite prevailing oversupply concerns, Developers continued to marginally (-1%). It should be noted, however, that this is • A lease-to-own system; and launch new projects including One Park Avenue at Sobha Hartland predominantly due to the increase in affordable villa communities • Investment portfolio applications. (by Sobha Realty), Zada in (by Damac) and Vincitore such as Damac’s Akoya and Nshama Town Square located along Benessere in Arjan (by Vincitore Realty). the E311 (Sheikh Mohammed Bin Zayed Road) and E611 (Emirates Moreover, the UAE Cabinet approved a total of 122 economic Road) corridors. activities across 13 sectors eligible for up to 100% foreign In addition, Omniyat recently (June 2019) announced the ownership such manufacturing, transport and storage, and recommencement of Anwa, which is expected to be the first Office rental rates came under further pressure and recorded construction. Each Emirate will determine the ownership residential development in Dubai Maritime City (DMC). Completion quarterly and annual declines of 4% and 16% in line with subdued percentage of foreign Investors in these activities. (Further details is anticipated for Q2 2020. economic conditions. are provided by Al Tamimi & Co. on page 31.)

First announced in 2004, DMC - a manmade peninsula spread This downward trajectory is expected to continue for all asset Government initiatives are continuously being rolled out to over 24 million sq.ft., was earmarked to become a purpose-built classes in the second half of 2019. stimulate the economy, increase investment and ultimately boost maritime centre with industrial, commercial, residential and the real estate market but have yet to filter through to create leisure facilities to include six clusters: the Harbour Offices, notable employment/business growth. Harbour Residences, Maritime Centre, Marina District, Dubai Maritime City Campus and the Industrial Precinct. A number of In addition, ongoing trade tensions between leading world residential and commercial projects were launched leading up to economies are likely to dampen local market conditions and the 2008 peak but came to a halt shortly thereafter due to the sentiment in the short-term, meaning sales prices are not global financial crisis. expected to stabilise/rebound until these improve.

3 Dubai Real Estate Report - Q2 2019 DUBAI SUPPLY

COMPLETED IN COMPLETED IN EXPECTED IN Q1 2019 Q2 2019 H2 2019

5,800 5,250 12,000 APARTMENTS NO. OF UNITS

900 1,300 5,000 VILLAS NO. OF UNITS

0.43 0.47 2.2 OFFICES MILLION SQ.FT.

4 Dubai Real Estate Report - Q2 2019 DUBAI APARTMENT RENTAL RATES

(All figures in AED 000’s p.a.)

STUDIO 1 BEDROOM 2 BEDROOMS 3 BEDROOMS % CHANGE Q1 2019 - Q2 2018 - FROM TO FROM TO FROM TO FROM TO Q2 2019 Q2 2019 HIGH TO LUXURY END DIFC 50 70 70 110 85 150 135 220 -3% -8% 42.5 70 60 90 80 140 125 200 -4% -11% PALM 55 75 60 130 100 180 120 -4% SHEIKH ZAYED ROAD 50 70 90 160 -3% MID TO HIGH END BUSINESS BAY 40 60 50 75 70 110 115 145 -12% DUBAI MARINA 40 45 85 65 130 80 190 -9% GREENS 55 55 75 115 150 -1% -13% JUMEIRAH BEACH RESIDENCE 120 110 -12% JUMEIRAH LAKES TOWERS 35 50 40 95 75 135 -16% AFFORDABLE AFFORDABLE DEIRA 20 45 30 65 80 65 110 -1% -8% 25 35 55 85 - - -10% DUBAI SPORTS CITY 40 35 50 75 90 -5% -15% INTERNATIONAL CITY 20 27.5 27.5 60 80 -5% JUMEIRAH VILLAGE 27.5 37.5 35 100

14%

Q-o-Q Y-o-Y Since peak Since market low % Change Q1 2019 Q2 2018 Q2 2014 Q3 2011 -4% -11% -33%

5 Dubai Real Estate Report - Q2 2019 DUBAI APARTMENT SALES PRICES

Q-o-Q % Change Y-o-Y % Change AED per sq.ft. 0 500 1,000 1,500 2,000 2,500 (Q1 2019 - Q2 2019) (Q2 2018 - Q2 2019)

HIGH TO LUXURY END

DIFC 850 1,800 -2% -10%

DOWNTOWN DUBAI 850 1,850 -5% -13%

PALM JUMEIRAH 775 1,900 -4% -14%

MID TO HIGH END

BUSINESS BAY 725 1,400 -3%

DUBAI MARINA 600 1,750 -11%

GREENS 650 1,250 -5% -17%

JUMEIRAH BEACH RESIDENCE 750 1,300

JUMEIRAH LAKES TOWERS 650 1,150 -3% -14%

AFFORDABLE

DISCOVERY GARDENS 525 650 -21%

DUBAI SPORTS CITY 500 850 -7% -13%

INTERNATIONAL CITY 350 650 -5%

JUMEIRAH VILLAGE 425 900 -16%

21%

Q-o-Q Y-o-Y Since peak Since market low % Change Since Q1 2019 Since Q2 2018 Q2 2014 Q3 2011 -4% -15% -33%

6 Dubai Real Estate Report - Q2 2019 DUBAI VILLA RENTAL RATES

(All figures in AED 000’s p.a.)

2 BEDROOMS 3 BEDROOMS 4 BEDROOMS 5 BEDROOMS % CHANGE Q1 2019 - Q2 2018 - FROM TO FROM TO FROM TO FROM TO Q2 2019 Q2 2019

ARABIAN RANCHES 90 130 100 160 150 240 170 270 -3% -10% DUBAI SILICON OASIS (CEDRE VILLAS) - - 140 155 185 -5% -7% DUBAI SPORTS CITY (VICTORY HEIGHTS) 125 150 190 175 250 -9% JUMEIRAH 120 135 215 -4% JUMEIRAH PARK 145 175 160 210 215 260 -2% -6% JUMEIRAH VILLAGE 85 120 90 125 140 120 170 -3% -14% MEADOWS 155 -14% 60 90 70 110 100 150 -1% -12% PALM JUMEIRAH - - 165 265 225 385 350 800 -9% SPRINGS 85 115 110 140 - THE LAKES 200 240 280 -1% -13% 200 300 -8%

Q-o-Q Y-o-Y Since peak Since market low % Change Since Q1 2019 Since Q2 2018 Q2 2014 Q2 2011 -2% -10% -35% -1%

7 Dubai Real Estate Report - Q2 2019 DUBAI VILLA SALES PRICES

Q-o-Q % Change Y-o-Y % Change AED per sq.ft. 0 1,000 2,000 3,000 4,000 5,000 (Q1 2019 - Q2 2019) (Q2 2018 - Q2 2019)

ARABIAN RANCHES 650 1,100 -5% -13%

DUBAI SILICON OASIS 575 725 -7% -16% (CEDRE VILLAS)

DUBAI SPORTS CITY 700 950 -6% -18% (VICTORY HEIGHTS)

JUMEIRAH PARK 600 850 -3% -15%

JUMEIRAH VILLAGE 400 800 -4% -14%

MEADOWS 750 1,050 -5%

PALM JUMEIRAH 700 3,750 -5%

SPRINGS 650 925 -17%

6%

Q-o-Q Y-o-Y Since peak Since market low % Change Since Q1 2019 Since Q2 2018 Q2 2014 Q3 2011 -5% -14% -37%

8 Dubai Real Estate Report - Q2 2019 DUBAI OFFICE RENTAL RATES

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

AVERAGE RENTAL RATES % CHANGE

FROM TO Q1 2019 - Q2 2019 Q2 2018 - Q2 2019

BARSHA HEIGHTS (FORMER TECOM) 50 90 -6% -21% 120 -3% -16% BUSINESS BAY 40 100 -18% DIFC 100 300 -5% -17% JUMEIRAH LAKES TOWERS 30 -7% -22% SHEIKH ZAYED ROAD 65 140 -9% -19%

16%

Q-o-Q Y-o-Y Since peak Since market low % Change Since Q1 2019 Since Q2 2018 Q3 2015 Q4 2012 -4% -16% -20%

9 Dubai Real Estate Report - Q2 2019 DUBAI OFFICE SALES PRICES

Q-o-Q % Change Y-o-Y % Change AED per sq.ft. 0 500 1,000 1,500 2,000 2,500 (Q1 2019 - Q2 2019) (Q2 2018 - Q2 2019)

BARSHA HEIGHTS 475 800 -7% -19% (FORMER TECOM)

BUSINESS BAY 625 1,300 -6% -16%

DIFC 950 1,850 -2% -9%

JUMEIRAH LAKES TOWERS 400 950 -4% -17%

8%

Q-o-Q Y-o-Y Since peak Since market low % Change Since Q1 2019 Since Q2 2018 Q1 2015 Q2 2012 -6% -18% -30%

10 Dubai Real Estate Report - Q2 2019 DUBAI PROPERTY MAP

1 Akoya 32 2 Al Barari 33 Green Community 3 34 International City Arabian Gulf 4 35 JBR 5 Al Nahda 36 Jumeirah 6 37 Jumeirah Golf Estates 7 Al Warqaa 38

50 8 Arabian Ranches 39 Jumeirah 51 9 Barsha Heights Lakes Towers (Tecom C) 40 Jumeirah Park

36 10 Bur Dubai 41 Jumeirah Village Circle 35 10 62 26 12 11 Business Bay 42 Jumeirah Village 11 39 55 14 54 12 City Walk Triangle 58 9 15 11 3 11 59 17 13 Culture Village 43 Living Legends 5 40 38 11 16 32 14 Deira 44 Liwan 44 11 18 56 15 DIFC 45 Meydan 4 22 20 13 6 16 Discovery Gardens 46 Mirdif 44 45 42 17 Downtown Dubai 47 MotorCity 311 23 49 41 27 18 Downtown 48 Mudon 33 21 19 Dubai Creek Harbour 49 44 311 19 37 64 20 Dubai Design District 50 Palm Jumeirah 30 To Abu Dhabi To Sharjah 47 21 Dubai Festival City 51 Pearl Jumeirah 24 22 Dubai Healthcare 52 Remraam 29 57 311 63 8 43 2 City Phase 2 53 Residential City

1 311 46 23 Dubai Hills Estate 54 Rigga 7 24 Dubai Investment 55 Sheikh Zayed Road 52 31 48 611 34 53 Park 56 Springs / Meadows 44 60 28 25 Dubai Residence 57 Dubai Studio City 61 Complex 58 The Greens 25 26 Dubai Marina 59 The Lakes 611 27 Dubai Production 60 The Villa City (IMPZ) 61 Town Square 611 28 Dubai Silicon Oasis 62 Umm Suqeim 29 Dubai South 63 Uptown Mirdiff 611 30 Dubai Sports City 64 Victory Heights 31 Dubailand

11 Dubai Real Estate Report - Q2 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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