Abu Dhabi ReportQ32009
Contracting Property Services Development
Residential
New Supply in Residential Market HIGHLIGHTS IN THIS ISSUE Abu Dhabi continues to see an increase in the supply of residential property with almost 1,000 new apartments having been delivered to the market in the last quarter, predominantly in New Supply in Residential p.1 off-island locations, including Mussafah, Mohammed Bin Zayed City and Khalifa City. These Market apartments have generally been leasing slowly due to a mismatch between landlords’ rental Office Market: Healthy Demand expectations and those of prospective tenants. In addition, tenants now have more choice, from Smaller Companies p.3 including the “Dubai and Drive” option where the differential in rental prices and quality of Al Ain: Plenty of Choice in p.4 amenities is still hard to ignore. Research conducted by Asteco has found that around 400 Residential Market apartments will come online in October 2009 on Abu Dhabi Island, in addition to a continued supply of apartments coming up in Khalifa City ‘A’. The residential rental market in Abu Dhabi has evolved over the last year and this is evident from the approach taken by various letting agents. Last year many brokers were charging viewing fees and most were not willing to entertain telephone enquiries from prospective Asteco is the largest property services tenants. This year, however, the majority of letting agents will offer to collect and drive company in the UAE. Asteco also has prospective tenants to view numerous apartments on their books without charge, reflecting offices in Qatar, Bahrain and Jordan. the fact that some apartments have remained vacant for a number of months. The attractiveness of cheaper rents and better value for money in Dubai is clearly visible ASTECO’S SERVICES from the volume of commuter traffic on the Abu Dhabi roads in the mornings and evenings. Sales and Leasing Indeed, as better quality units are delivered in Abu Dhabi over the next six to 12 months, including Marina Square and Sun & Sky Towers, many daily commuters will consider these Property Management developments. It is clear, however, that this significant group of prospective tenants will Investment Agency benchmark these new developments against comparable developments in Dubai (particularly Valuation in Dubai Marina), and thus individual landlords owning units within these developments should be realistic in their rental expectations, particularly given the amount of competing Market Research units that will come on to the market at the same time. Property Consultancy Furnishing and Design 250,000 Average Apartment Rental Rates (Q3 2009)
200,000
150,000 FOR ADDITIONAL INFORMATION, AED/pa 100,000 PLEASE CONTACT: 50,000 Judy Lam 0 Khalidiyah Corniche TCA Muroor Hamdan Passport Khalifa Salam Airport Mushrif Mussafah Regional Research Manager Road Street Road Email: [email protected] 1 BR 2 BR 3 BR Vaibhav Sharma Senior Research Analyst Khalidiyah and the Corniche continue to be in high demand, but tenants have also started to Email: [email protected] look at developments off Abu Dhabi Island. Average rental rates on the Corniche are currently AED130,000, AED175,000 and AED220,000 (from their peak of AED180,000, AED260,000 Tel: +971 4 4037777 and AED350,000) for one-, two- and three-bedroom apartments respectively. Not surprisingly, Fax: +971 4 4037778 those towers equipped with a gym and swimming pool have started to command a premium and400,000 this is expected to be the trend as Marina Square, CapitalAverage Plaza Villa and Rental Meena Rates Plaza (Q3 come 2009) online. 360,000 Customer Management: +971 4 403 77 00 www.asteco.com 320,000
280,000
240,000
200,000 AED/pa 160,000
120,000
80,000
40,000
0 Khalidiyah Bateen Manaser Muroor Mina Al Falah Airport Mushrif Passport Al Raha Khalifa 'A' Sas Al Gardens Nakheel 3 BR 4 BR 5 BR
Average Office Rental Rates and Percentage Change (Q2-Q3 2009) 2,000 0% 1,800 -2% 1,600 1,400 -4%
/pa 1,200 2 -6% 1,000 800 -8%
AED/m 600 -10% 400 -12% 200 0 -14% Hamdan Khalifa Salam Corniche Khalidiya Airport Electra Najdah TCA Muroor Passport Defence Eastern Road Street Road Street Corniche
Q3 Percentage Change
2,800 Average Retail Rental Rates (Q2 and Q3 2009)
2,600 /pa 2 2,400
2,200 AED/m
2,000 Khalidiyah Bateen Muroor Mina Al Falah Airport Passport Corniche
Q2 Q3 Residential
Villas Provide Better Value for Money
Following a period of falling rents, villa rental rates have stabilised In terms of attracting tenants, given its location - approximately off Abu Dhabi Island with high take-up levels being witnessed at Al 40-50 minutes from downtown Abu Dhabi - this development will Raha Gardens and Sas Al Nakhl. This has been driven by new entrants face competition from well-established communities such as Dubai arriving into the market as well as tenants relocating from Abu Dhabi Marina, Jumeirah Lakes Towers and Discovery Gardens. city to off-island villa compounds in order to take advantage of better Villas continue to attract investor interest, particularly in Al Reef value250,000 for money rental levels. AverageMost of theApartment villas in Rentalthe last Rates phases (Q3 of 2009) (Arabic phase), Golf Gardens and Al Raha Gardens despite a decline Al Raha Gardens have now been let, with the agent at Sas Al Nakhl 200,000 in capital values. In Q3 2009, townhouses on Al Raha were available recently reporting that all villas are now taken. Villas in Khalifa City 150,000 for AED205,000 for three bedrooms and AED210,000 for four ‘A’ have also become increasingly popular as landlords have reduced bedrooms. On the Island, the average rental rate was AED300,000 rents.AED/pa 100,000 Some landlords have still kept their asking rents high, but for three-bedroom villas, AED365,000 for four-bedroom villas, and they are fast losing potential tenants and may struggle to rent as 50,000 AED385,000 for five-bedroom villas, with Mushrif commanding the further supply hits the market. This quarter, new villas have become highest rentals, closely followed by Khalidiyah and Bateen. This is available in0 Eastern Corniche, Al Nahyan Camp, Salam Street and on Khalidiyah Corniche TCA Muroor Hamdan Passport Khalifa Salam AirportcertainlyMushrif driven Mussafah by the available supply in Mushrif and the lack of the mainland. Road Street Road villas available in Khalidiyah and Bateen. 1 BR 2 BR 3 BR The Al Reef development by Manazel, located north of the airport, Rental rates for Al Raha Gardens, Khalifa ‘A’ and Muroor stabilised is the first development to be completed in Abu Dhabi where in the last three months. Moreover, rates dropped sharply during the expatriates can buy their own villa or apartment. The developer has first half of the year, which saw some senior management staff move begun handover of the villas. back to Abu Dhabi from Dubai.
400,000 Average Villa Rental Rates (Q3 2009)
360,000
320,000
280,000
240,000
200,000 AED/pa 160,000
120,000
80,000
40,000
0 Khalidiyah Bateen Manaser Muroor Mina Al Falah Airport Mushrif Passport Al Raha Khalifa 'A' Sas Al Gardens Nakheel 3 BR 4 BR 5 BR
Average Office Rental Rates and Percentage Change (Q2-Q3 2009) 2,000 0% 1,800 -2% 1,600 1,400 -4%
/pa 1,200 2 -6% 1,000 800 -8%
AED/m 600 -10% 400 -12% 200 0 -14% Hamdan Khalifa Salam Corniche Khalidiya Airport Electra Najdah TCA Muroor Passport Defence Eastern Road Street Road Street Corniche 02 For additional information call +971 4 403 77 00 or email [email protected] Q3 Percentage Change
2,800 Average Retail Rental Rates (Q2 and Q3 2009)
2,600 /pa 2 2,400
2,200 AED/m
2,000 Khalidiyah Bateen Muroor Mina Al Falah Airport Passport Corniche
Q2 Q3 250,000 Average Apartment Rental Rates (Q3 2009)
200,000
150,000
AED/pa 100,000
50,000
0 Khalidiyah Corniche TCA Muroor Hamdan Passport Khalifa Salam Airport Mushrif Mussafah Road Street Road 1 BR 2 BR 3 BR
250,000 Average Apartment Rental Rates (Q3 2009)
400,000200,000 Average Villa Rental Rates (Q3 2009)
150,000 360,000
AED/pa 100,000 320,000 50,000
280,000 0 Khalidiyah Corniche TCA Muroor Hamdan Passport Khalifa Salam Airport Mushrif Mussafah Road Street Road 240,000 Commercial 1 BR 2 BR 3 BR 200,000 AED/pa Office160,000 Market: Healthy Demand from Smaller Companies 120,000 The Abu Dhabi office market has witnessed smaller firms or trading have not been able to absorb the excess office supply in the market companies80,000 setting up base in the emirate during the past few months. and most have shown a preference for cheaper rental rates over Conversely,400,000 there has at the same time been a decline inAverage the number Villa Rentallocation. Rates However, (Q3 2009) this has also been a result of landlords with offices of 40,000 companies with branches from other emirates registering their providing limited parking availability trying to command similar rentals business360,000 in Abu Dhabi. The majority of these new companies have as Grade A offices, thus forcing small businesses to settle for offices established0 themselves in Mussafah, followed by the Western Region. that offer more parking, but are located outside the Central Business In320,000 order toKhalidi assisty ah new Bateen start-ups Manaser the Federal Muroor Government Mina issued Al a FalahDistrict Airport (CBD). Mushrif Passport Al Raha Khalifa 'A' Sas Al decree amending Article 227 of the UAE Commercial Companies Gardens Nakheel 280,000 According to the Abu Dhabi Chamber of Commerce and Industry Law No. (8) (Companies Law) with the effect of abolishing 3 the BR 4 BR 5 BR (ADCCI), 4,263 (1,814 in Q3 2009) new companies have registered AED150,000 minimum capital requirement. Around 608 new limited 240,000 in Abu Dhabi in 2009, with the majority taking offices on the liability companies have taken this opportunity to set up in Abu Dhabi. mainland. The Eastern Corniche witnessed a drop in rental rates of 200,000 As Abu Dhabi continues its growth in line with Plan 2030, it is fast 12%, compared with Q2 2009. This was closely followed by Salam AED/pa emerging160,000 as an attractive destination: 570 new foreign businesses Street and Tourist Club Area (TCA) which have experienced a lack of have been established in the emirate during this quarter. The majority demand from office tenants due to ongoing road works. Salam Street of120,000 these companies have started from a small base and, therefore, and TCA showed an 11% drop quarter-on-quarter.
80,000 Average Office Rental Rates and Percentage Change (Q2-Q3 2009) 40,0002,000 0% 1,800 -2% 1,6000 -4% 1,400 Khalidiyah Bateen Manaser Muroor Mina Al Falah Airport Mushrif Passport Al Raha Khalifa 'A' Sas Al
/pa 1,200 2 Gardens Nakheel-6% 1,000 3 BR 4 BR 5 BR 800 -8%
AED/m 600 -10% 400 -12% 200 0 -14% Hamdan Khalifa Salam Corniche Khalidiya Airport Electra Najdah TCA Muroor Passport Defence Eastern Road Street Road Street Corniche
Q3 Percentage Change
Companies continue to move into their ownAverage purpose-built Office Rental premises, Rates which and Percentage will reduce Change demand (Q2-Q3 and create 2009) further pressure on office rental rates. 2,000It is therefore imperative for landlords to re-look at their developments to ensure they meet tenant requirements. 0% 1,800 -2% 1,600 1,400 -4% 2,800 Average Retail Rental Rates (Q2 and Q3 2009) /pa 1,200 2 -6% Retail1,000 Sector: Expanding on Mainland 2,600800 -8% The retail sector is expanding in Abu Dhabi with the opening of Ground floor shop units have been impacted most, with the majority /pa AED/m 600 -10% 2 Mazyad2,400400 Mall in the second quarter, and with the Delma Mall due in new towers struggling to lease. Some of the shops have been -12% to open200 by end of the year. This increase in retail offering is likely to vacant for over three months as landlords have tried to hold rental 2,2000 -14% divideAED/m consumer footfalls as residents on the mainland will have more rates, thus driving prospective tenants to other destinations with options closerHamdan to home Khalifa rather thanSalam driving Corniche into Abu Khalidiya Dhabi city.Airport The Electralower rents.Najdah RentsTCA across Muroor Abu DhabiPassport decreasedDefence slightlyEastern between 2 Road Street Road Street Corniche existing2,000 Abu Dhabi malls are not destination malls and, therefore, and 4%. The Corniche continues to lead the market with an average better incentivesKhalidiyah may need to be Bateenoffered to attractMuroor new tenantsQ3 andMina Percentagerent of AED2,600Al Change Falah per squareAirport metre, followedPassport by KhalidiyahCorniche and retain existing ones as some malls experience a drop in consumer Bateen at AED2,400 per square metre. Q2 Q3 footfalls.
2,800 Average Retail Rental Rates (Q2 and Q3 2009)
2,600 /pa 2 2,400
2,200 AED/m
2,000 Khalidiyah Bateen Muroor Mina Al Falah Airport Passport Corniche
Q2 Q3
For additional information call +971 4 403 77 00 or email [email protected] www.asteco.com 03 Al Ain
Average Villa Rental Rates (Q3 2009) 140,000 120,000 100,000 Plenty of Choice in Residential 80,000Market 60,000 Al Ain’s residential villa market has seen prices remain stable during AED/pa As40,000 the graph below illustrates, Al Towaya continues to command 20,000 the last quarter. The market has been slow during the summer the highest0 rental rates for three-, four- and five-bedroom villas at as landlords have tried to bridge the gap between their rental average rentalTown ratesAl Jimi of AED85,000,Al Al AED106,250Al Al andZaker AED118,750 Al expectations and the tenant’s affordability. The residential market has respectively.Centre Khabisi Muwaiji Manasir Masoudi Towaya previously benefited from an influx of tenants from Dubai and Abu 3 BR 4 BR 5 BR Apartment rental rates in Q3 have maintained the levels achieved Dhabi due to lower rents, but the drop in the number of residents during Q2 2009. Average One-bedroom Villa Rental apartments Rates (Q3 2009) average between from these two emirates has impacted Al Ain’s residential market. 140,000 AED50,000 and AED60,000,Average Apartment two-bedroom Rental Rates apartments(Q3 2009) between 100,000120,000 Tenant demand during Q3 2009 was relatively low compared with AED65,000100,000 and AED75,000, and three-bedroom apartments Q2 2009, with the market witnessing an increase in availability. This between80,00080,000 AED75,000 and AED100,000 in Al Ain. 60,00060,000 has allowed some tenants to move within the city to better locations AED/pa 40,000 Tenants40,000 are showing a preference for villas over apartments, though or better quality villas. This movement is healthy and will allow the AED/pa 20,000 making an exception if the apartment has amenities such as swimming market to start differentiating rents based on location, quality and 20,0000 Town Al Jimi Al Al Al Al Zaker Al pools,0 gymnasia, garden, covered parking and is located within a amenities. As a result, some new villas have been able to command Centre Khabisi Muwaiji Manasir Masoudi Towaya gated community.Town Centre Al Jimi Al Khabisi Al Nyadat Al Manasir a 15-20% premium over old villas, with no amenities, in the same 3 BR 4 BR 5 BR location. 1 BR 2 BR 3 BR
Average Villa Rental Rates (Q3 2009) Average Apartment Rental Rates (Q3 2009) 140,000 100,000 120,000 80,000 Average Retail Rental Rates (Q3 2009) 100,000 1,800 80,000 60,000 60,000 40,0001,500 AED/pa 40,000 AED/pa
/pa 1,200 20,000 2 20,000 0 9000 Town Al Jimi Al Al Al Al Zaker Al 600 Town Centre Al Jimi Al Khabisi Al Nyadat Al Manasir Centre Khabisi Muwaiji Manasir Masoudi Towaya
AED/m 300 1 BR 2 BR 3 BR 3 BR 4 BR 5 BR 0 Khalifa Aud Al Main Senaya Al Jimi Al Ain Al Bawadi Street Touba Street Street Mall Mall Mall Average Apartment Rental Rates (Q3 2009) Street 100,000 Average VillaRetail Rental Rental Rates Rates (Q3 (Q3 2009) 2009) 140,000 Office Tenants Choose Cheaper1,800 Rents over Location 80,000 120,000 60,000 100,0001,500 According to the Chamber of Commerce, 2,560 (654 in Q3 2009) new 80,000 40,000 /pa 1,200 2 AED/pa 60,000
companies have applied for trade licences in Al Ain in the first nine AED/pa Average Office Rental Rates (Q3 2009) 20,000 40,0001,200900 months0 of 2009. The majority of these companies have established 20,000600 0
themselvesTown in Senaya,Centre thusAl Jimi highlighting Al Khabisi a preference Al Nyadat for cheaper Al Manasir rents AED/m 900300 Town Al Jimi Al Al Al Al Zaker Al
over location. Other popular 1locations BR 2 BRwere Mazyad3 BR Street, followed /pa Centre Khabisi Muwaiji Manasir Masoudi Towaya 2 0 by Al Hili and Khalifa Street. The majority of new office tenants in 600 Khalifa Aud Al 3Main BR Senaya4 BR 5Al BR Jimi Al Ain Al Bawadi Q3 2009 have been trading companies, with only a small percentage Street Touba Street Street Mall Mall Mall Street
being industrial or professional companies. AED/m 300 Average Retail Rental Rates (Q3 2009) Average Apartment Rental Rates (Q3 2009) As the graph to the right illustrates, Khalifa Street continues to 100,000 command1,800 the highest average rental rates of AED1,050 per square 0 80,000 Khalifa Street Aud Al Touba Street Main Street Senaya Street metre,1,500 followed by Aud Al Touba at AED1,000 per square metre, Main 60,000 Average Office Rental Rates (Q3 2009) /pa 1,200 2 1,200 Street at AED950 per square metre, and Senaya Street at AED800 per 40,000 900 AED/pa square metre. 20,000 600 900 0 AED/m 300 /pa 2 Town Centre Al Jimi Al Khabisi Al Nyadat Al Manasir 0 600 1 BR 2 BR 3 BR Khalifa Aud Al Main Senaya Al Jimi Al Ain Al Bawadi Street Touba Street Street Mall Mall Mall AED/m 300 Retail MarketStreet Favours Anchor Tenants
0 The Al Ain retail market has seen little demand from tenants, thus Average Retail Rental Rates (Q3 2009) Khalifa Street Aud Al Touba Street Main Street Senaya Street resulting in rents remaining constant in Q3, compared with Q2 2009. 1,800 Mall owners continue to provide a discount to anchor tenants, thus 1,500 Average Office Rental Rates (Q3 2009) relieving1,200 the pressure on them during the relatively slow summer /pa 1,200 2 months. Other tenants, however, continue to struggle and have been 900 900 forced to move to destinations with cheaper rental rates. 600 /pa 2 AED/m 300 Khalifa600 Street commands the highest rental rate of AED2,000 per square metre and is closely followed by Al Jimi Mall, Al Ain Mall and 0 Khalifa Aud Al Main Senaya Al Jimi Al Ain Al Bawadi
AlAED/m Bawadi Mall at AED1,900 per square metre. 300 Street Touba Street Street Mall Mall Mall Street 0 Khalifa Street Aud Al Touba Street Main Street Senaya Street
04 For additional information call +971 4 403 77 00 or email [email protected] Average Office Rental Rates (Q3 2009) 1,200
900 /pa 2 600
AED/m 300
0 Khalifa Street Aud Al Touba Street Main Street Senaya Street Overview
Apartments: Abu Dhabi Island versus Abu Dhabi Mainland and Dubai
Despite new supply coming on to the residential market, there is still beyond their means, or units are being offered on a sub-lease. Most a lack of quality accommodation across all levels. Abu Dhabi residents of the tenants who arrived at the peak of the market have completed still seek towers on the Corniche, Khalidiyah or Bateen, but are one year in their accommodation and are now looking at options in settling for apartments elsewhere as there is lack of supply, rents are Abu Dhabi city, on the mainland, and, increasingly, in Dubai.
Abu Dhabi Island Abu Dhabi Mainland Dubai (Dubai Marina, JLT and Discovery Gardens)
n Central location, easy access to malls, n New apartments with quality finishes n New apartments with quality parks, beach, etc. and white goods supplied in some finishes. cases. n Commercial and residential buildings n Sufficient parking. located in close proximity on n Sufficient parking. n Excellent amenities such as Abu Dhabi Island, offering easy n Quieter, more peaceful lifestyle. swimming pool, gymnasium, play commuting. area for children, etc. n Access to community facilities in n Residential apartments are generally developments like Mangrove Village, n Close proximity to Dubai Metro, bigger in size than those in Dubai. Sas Al Nakhl, etc. thus reducing reliance on owning a
Advantages n Staying closer to work provides a second car. n Close access to car service centres. better work/life balance. n Rents at a discount of 35-50%. n School admissions more readily n Easy access to schools and hospitals. available. n Rents are generally paid in four to six cheques.
n School admissions more readily available.
n Majority of apartments are 15-20 n Majority of apartments currently are n Long commute with travelling time years old. off-island, located in split villas or next increasing due to traffic congestion to labour camps and industrial zones. and speed cameras on Dubai-Abu n Many towers lack quality amenities Dhabi road. such as swimming pool and n Lack of retail malls, cinemas, etc. gymnasium. n Rent tax of 5% on the yearly rent n Traffic congestion during peak hours paid. n Insufficient parking. in and out of Abu Dhabi city. n Some residential towers impacted by n Tightly-controlled market, thus n Lack of affordable mid-segment ongoing construction. difficult to identify supply coming to schools.
Disadvantages the market. n Residents need to drive 10-15 minutes n Traffic congestion during peak hours. for basic needs like laundry, grocery, etc. n Rent paid up front in one cheque.
n Waiting lists for good schools.
The above factors highlight the options currently available to Abu landlords to demolish older buildings, thus improving the overall Dhabi tenants. This situation is expected to change in 2010, when quality of apartments in Abu Dhabi. Marina Square and other luxury developments are delivered during As Abu Dhabi residents move back into the capital, they will help the first half of the year, putting some downward pressure on rents boost Abu Dhabi’s economy further. Abu Dhabi will benefit from and allowing people to move back to Abu Dhabi. The government additional spending power in various industries, especially in the retail of Abu Dhabi has already identified issues related to residential sector. accommodation and is in the process of developing affordable housing. In addition, according to a press release from Abu Dhabi Abu Dhabi is currently undergoing transition and, over the next five Commercial Properties in June 2008, they have 750 low- to mid-rise years, will emerge as the destination of choice with the development towers under construction. This will help the market and allow some of Yas Island, Al Reem, Saadiyat and Al Raha Beach.
For additional information call +971 4 403 77 00 or email [email protected] www.asteco.com 05 Overview Q3 2009 Highlights Abu Dhabi Finance Offers Mortgages to Non-residents Abu Dhabi’s Share of UAE’s Economy Rises on Strong Oil Abu Dhabi Finance recently launched a new mortgage product, Price Compass, for clients residing outside the UAE. Compass will offer High oil prices and production pushed Abu Dhabi’s share of the salaried non-residents, wishing to invest in residential property in UAE economy above 55% in 2008, while the contribution of other the capital, up to 75% mortgage finance; self-employed investors emirates declined or remained unchanged, official figures showed. are eligible for a maximum of 70% finance. With its Compass Dubai’s share of the country’s gross domestic product slipped to just product, the mortgage company will offer a minimum loan amount above 32% but it remained the second largest economy in the UAE. of AED250,000, with the maximum amount depending on the individual’s financial status. UAE Wins Bid to Host IRENA HQ
Abu Dhabi Plans to Build 17,000 Villas for Emiratis The UAE has become the first developing country to host a major international organisation, with Abu Dhabi becoming home to the Almost 17,000 new villas for Emiratis will be built in the emirate over headquarters of the International Renewable Energy Agency (IRENA). the next five years in 23 separate locations. These projects will be The IRENA headquarters will be located in Masdar City which is divided into three regions and will include 2,874 villas and 2,000 currently under construction. IRENA will also bring to the UAE a new plots of land in nine towns of Al Gharbia (formerly known as the industry which will be accompanied by an influx of energy experts, western region), and 3,056 villas and 977 plots in 14 towns in the students, supporting industries and jobs. (Renewal energy projects eastern region around Al Ain. In the capital, the 43 square kilometres in Germany, for example, have brought 300,000 jobs to the country South Shamkha development will consist of up to 10,500 villas, and a since 2002, and have started thriving industries.) smaller 168-villa project close to Aldar’s 5,000 villas of Al Falah.
ADCCI to See Surge in Registration of New Companies First Phase of Yas Island Infrastructure Work Ends Abu Dhabi Chamber of Commerce and Industry (ADCCI) expects Aldar Properties has announced the completion of infrastructure the number of new companies registered to double over the coming work on its Yas Island development. “We have finished all the months due to amendments made to some provisions of the Companies infrastructure work for the first phase of the development, including Law. The amendments were made in a recent decree issued by The main and internal roads, bridges, tunnels, electricity, water and President His Highness Sheikh Khalifa bin Zayed Al Nahyan, Ruler of telecom networks, and sewerage on the island’s southern area,” Abu Dhabi. The earlier law set the capital requirement for a company said Talal Al Dhiyebi, Director of Planning and Infrastructure. The first with limited liability at AED150,000, which used to lead to disputes phase includes seven hotels, which are currently being furnished. among partners and eventually the cancellation of its trading licence. Aldar Hospitality and Hotels will run one - the Yas Hotel - while the But following the amendment, there will be full freedom for partners remaining six will be operated by other international hotel groups. to determine the capital requirement.
Tenders Called for Abu Dhabi Tram Network Abu Dhabi Enforces Business Offences Law The Department of Transport has invited tenders from companies to Abu Dhabi recently began enforcing a new law to curb fraud and other help design a 340-kilometre tram network in Abu Dhabi. The move offences as part of the emirate’s long-term development strategy comes just weeks after the department narrowed down a list of intended to spur investment and ease reliance on volatile oil sales. consultancies to help design a metro system. The two projects are The legislation will primarily target violators of existing economic part of plans to invest more than AED300 billion (USD81.67 billion) regulations, establishments without licences, trade fraud and all other in transport developments in the capital over the next 20 years to practices that infringe the rights of consumers and investors. reduce road congestion. The tram feasibility study will take 18 months to complete and the first phase is expected to become operational by 2014.
06 For additional information call +971 4 403 77 00 or email [email protected] Overview Mortgage Market Update
Mortgages are more readily available in Abu Dhabi and developers are working hard to provide their customers with finance. Abu Dhabi Finance has launched a mortgage product for non-residents to cater for the many people from overseas who bought off-plan from the major developers, and ADCB will finance up to 90% for borrowers who transfer their salary to the bank. Activity in the secondary market remains slow as most properties are still under construction, but the availability of mortgages allows those who have already bought to avoid defaulting on payments or being forced to sell at the wrong time.
CLIENT MAX MAX MAX INTEREST MIN EARLY LENDER (*) TERM MAX LTV INSURANCE PROCESSING FEE CLOSURE TYPE AGE LOAN DBR RATE SALARY REPAYMENT
(AED (AED/ Yrs Yrs % % % % % % million) pm)
ADCB Abu 70 10 25 <90 with 55 8-9.75 8,000 Not 1 (no caps) <2 (No fee after <2 (No fee after 5 Dhabi, salary Mandatory 5 years) years) Dubai, transfer in Sharjah, Abu Dhabi; Ajman <85 with salary transfer in Dubai
ABU Abu 70 No 30 <85 <55 8.5-9.1 10,000 Mandatory 0.75-1 <3 (No fee after <3 (No fee after 3 DHABI Dhabi Limit 3 years) years) FINANCE
DUBAI Dubai 65 10 25 <80 <60 Salary 8,000 Mandatory 1.25 (Capped at <2 <3 ISLAMIC segment AED 25,000) BANK 6.85, Self- Employed 7.75
HSBC Dubai, 65 10 25 <75 <60 8.5-9.5 25,000 Mandatory 1 (min. AED 3 if TF to lender Free min. AED BANK RAK 5,000) *can be (AED 2,500 own 25,000 added to loan* funds)
LLOYDS Dubai, 70 No 15 <50 <40 8.5 12,000 Mandatory 1 (no caps) None None TSB BANK RAK Limit (completed villa only)
MASHREQ Dubai, 70 10 20 <75 in <55 7.49-8.5 9,000 Mandatory 0.5-1 (Capped <1 (No fee after 2 3 if TF to lender (No BANK Abu Dubai <80 at AED 25,000) years) fee after 2 years) Dhabi in Abu Dhabi
SCB Dubai, 70 10 25 75 <60 6.75 8,000 Mandatory 1 2 2 (5 if buyout) Abu Dhabi
RAKBANK Dubai, 65 No 25 <80 <58 7.99- 10,000 Mandatory 0.5-1.25 1 of own fund 1 (5 if TF to lender) Abu Limit 10.3 Dhabi
Note: 1. (*) The above Lenders reserve the right to change their product policy, fees and charges, interest rates and other credit scoring criteria at any time without prior notice. 2. Banks will generally only finance properties from developers on their approved lists. John Charcol Dubai is an independent mortgage broker based in Dubai. For queries or assistance in relation to mortgages, contact John Charcol’s sales team in Dubai on 800 CHARCOL (+971 4 329 7011 if dialling from outside the UAE), or by email to [email protected].
Abu Dhabi Finance has launched a mortgage product to cater for non-residents...
For additional information call +971 4 403 77 00 or email [email protected] www.asteco.com 07 Overview
UAE Residential Comparison
The graphs below show the current average rental rates (in AED‘000) for apartments and the percentage change in rental rates over the last three months for the different units across the emirates.
0% 0%
-5% -5% 45 -6%
AED 000s 23 -8% 21 22 19 15 Studio
Dubai Sharjah Ajman Ras Al Khaimah Fujairah Umm Al Quwain
0% 104 76 -3% -4% -4% -5% 32 30 30 24 -6% -6% 21 1 BR AED 000s
Dubai Abu Dhabi Sharjah Ajman Ras Al Fujairah Umm Al Khaimah Quwain
0% 137 -3% 103 -3% -3% -5% -6% 41 33 35 30 30 2 BR AED 000s -8%
Dubai Abu Dhabi Sharjah Ajman Ras Al Fujairah Umm Al Khaimah Quwain
173 0% -1% 139 -2% -4% -4% -6% 52 49 49 45 40 AED 000s 3 BR -13%
Dubai Abu Dhabi Sharjah Ajman Ras Al Khaimah Fujairah Umm Al Quwain
DISCLAIMER: This report contains information available to the public and has been relied upon by Asteco Property Management on the basis that it is accurate and complete. Asteco Property Management accepts no responsibility if this should prove not to be the case. 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 will not be held responsible for third-party contributions.
08 For additional information call +971 4 403 77 00 or email [email protected]