ANNUAL REPORT 2015-2016

3+STUDY FOR -RASHED 6 AUGUST 2015

www.freehold.info

FMI-3.indd 1 8/26/2015 5:35:42 PM ANNUAL REPORT 2015-2016

3+STUDY FOR AJMAN-RASHED 6 AUGUST 2015

www.freehold.info

Produced by Freehold Mediation & Information RealEstate LLC. All information contained is private an confidential and solely for the named recipient Freehold Mediation & Information Real Estate LLC | #2901 / 2902 Saba Tower 1, Cluster E, Jumeirah Lake Towers, Dubai – UAE | +971 4 422 8000 | [email protected] | www.freehold.info

FMI-3.indd 2-3 8/26/2015 5:35:43 PM TABLE OF CONTENTS

FMI

INTRODUCTION TO FMI

02 KEY FIGURES

08 MACROECONOMIC OVERVIEW OF UAE

12 REAL ESTATEJ MARKET

15 OVER VIEW AJMAN

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INTRODUCTION TO FMI KEY FIGURES

At FMI we understand the importance of information in the real estate sector. We specialize in the market information and analysis of 01 PROFIT BY SEGMENT 02 REVENUE BY SEGMENT UAE market in terms of Trend, Prices and Future Prospects of real estates. Ellignis res as maxim consequae nem recusandel id magnis Ur ab iderias nulluptur aliqui odisimo lloreperest eat vollabo. FMI we understand the importance of information in the real estate sector. eatuscientur solum quas essim volor aut harumet faccatur? Nequo con cuptatiost odipsanihil ium quam dit rerupta tiscia incidi con re volut autatem re pere doluptas quiam, escia We specialize in the market information and analysis of UAE market in terms of Trend, Prices and Future Prospects of real Sediandentem quatist officil ium faccus sumet quae qui consent venimillabo. estatesspecialize in the market information and analysis of UAE market in terms of Trend, Prices and Future Prospects of real quatem eaquiberci is eaquamus nobitatur? Nullupta aut laborro estatesspecialize in the market information and analysis of UAE market in terms of Trend, Prices and Future Prospects of real estates cupta parcide lam quodignatur, earcid est, quas molor mollupi Erro te non re veriaturem faccus mo ipidit, ipisqui res enisit mil il tisinimus nos estrum none nametum faccaecati. maionsequia consecearias non restias sequas sitatis sunt, ut ilis nusamet ut occullenda et, qui asperuntio.

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MACROECONOMIC OVERVIEW OF UAE

The he UAE’s economy grew 4.6% in real terms in 2014, largely The UAE’s economy grew 4.6% in real terms in 2014, largely in line with our 4.5% growth forecast for last year. GDP growth in line with our 4.5% growth forecast for last year. GDP growth for 2013 . for 2013 was revised lower to 4.3% from 5.2% previously, while 2012 growth was revised up sharply from 4.7% to 6.9%. The UAE national accounts show that the oil sector grew 4.0% in real terms last year, faster than the 2.9% growth in 2013. This The UAE national accounts show that the oil sector grew 4.0% was higher than we had expected as Bloomberg oil production in real terms last year, faster than the 2.9% growth in 2013. This estimates suggested flat oil output. was higher than we had expected as Bloomberg oil production estimates suggested flat oil output. The UAE’s economy grew 4.6% in real terms in 2014, largely in line with our 4.5% growth forecast for last year. GDP growth for 2013 was revised lower to 4.3% from 5.2% previously, while The UAE’s economy grew 4.6% in real terms in 2014, largely 2012 growth was revised up sharply from 4.7% to 6.9%. in line with our 4.5% growth forecast for last year. GDP growth for 2013 was revised lower to 4.3% from 5.2% previously, while 2012 growth was revised up sharply from 4.7% to 6.9%.

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After remaining largely unchanged PARTICULARS 2010 2011 2012 2012 2014 The seasonally adjusted headline in 2014, the UAE has increased oil Nominal GDP (AED bn) 1,051 1,276 1,367 1,478 - HSBC/Markit UAE PMI for the non- 125 1.7 production in H1 2015, according oil producing private sector achieved Real GDP Growth Rate (% Y-o-Y) 1.6% 4.9% 4.7% 5.2% 4.3% 124 to Bloomberg estimates. Oil output Consumer Price Index - CPI (% Y-o-Y) 0.9% 0.9% 0.7% 1.1% 2.3% the second highest reading of 59.3 reached 2.9mn bpd in June, up from Government Gross Debt (% of GDP) 22.1% 17.5% 16.6% 12.3% - in January 2015 since the series 123 2.7mn bpd in December. Average began in August 2009, below the Current Account Surplus (% of GDP) 2.5% 14.7% 18.5% 16.1% 11.1% 122 1.4 output in H1 2015 is 2.4% higher Fiscal Surplus (% of GDP) -5.9% -5.6% -4.9% -1.9% - record high of 61.2 in October. The than the average for 2014, and above Net Foreign Assets (AED bn)w 79 92 161 247 - January PMI data reflects sustained 121 our forecast for this year. Despite production growth in the first month Population (in mn) 8.3 8.4 9.2 9.3 - 120 being the single largest contributor of 2015. The rate of output expansion Source: World Bank, IMF, National Bureau of Statistics, Central Bank of UAE, Bloomberg to GDP, the oil sector’s share in GDP strengthened, supported by stronger 119 1.1 2015 2016 2017 is low as compared to the country’s sales, good market conditions, start- GCC counterparts. Going forward, up of new business and export orders. Expected CPI the sector’s growth is likely to lose Real GDP Growth Subsequently, hiring continued to rise Source: National Bureau of Statistics steam further as global crude oil prices 6% in January. 4.90% 4.70% 5.20% 5.20% continue their free fall. Oil prices fell CPI Trends (%-Y-o-Y) around 46% in 2014 as the OPEC 4% However, input prices also rose, 6 ruled out cutting oil production and signaling the prevailing cost pressures. 5 2% 1.60% witnessed a continued fall in January Overall, the current scenario suggests 4 2015 to below USD50 per barrel. encouraging near-term prospects for 0% 2009 3 the economy as demand is holding 2010 2011 2012 2013 2014 2 The seasonally adjusted headline up fairly well, although lower oil prices -2% 1 HSBC/Markit UAE PMI for the non- and weaker demand from key export 0 oil producing private sector achieved -4% markets may weigh on the economy. the second highest reading of 59.3 Jul 14' Jun 14' Oct 14' Jan 14' Feb 14' Apr 14' Sep 14' Dec 14' Aug 14' Nov 14' Mar 14' in January 2015 since the series -6% -5.20% Consumer price inflation came in at May 14' began in August 2009, below the 3.1% in December 2014, maintaining CPI Food and Drinks record high of 61.2 in October. The Source: National Bureau of Statistics its moderate upward trend. The Housing Hotels January PMI data reflects sustained housing and utility costs, accounting production growth in the first month for around 39% of consumer expenses, Source: National Bureau of Statistics of 2015. The rate of output expansion continued to accelerate as it rose 5.4% Key Sub-sector Distribution (% of Nominal GDP) strengthened, supported by stronger 80% Y-o-Y. The rising housing costs in Dubai sales, good market conditions, start- are driving up countrywide house price inflation being imported, it is predicted fast paced economy which shares the up of new business and export orders. 60% inflation as more residents move to that prices of some categories will go same benefits as some of the largest Subsequently, hiring continued to rise nearby emirates. The food prices rose down. competing economies in the world. in January. 40% 1.3% Y-o-Y in December, recording the lowest Y-o-Y increase in 2014, helped Business optimism in the UAE has Along with business optimism, business However, input prices also rose, 20% by lower global food prices. The overall continued to grow steadily despite confidence has also seen a steady signaling the prevailing cost pressures. inflation for 2014 stood at 2.33%. Going the recent market changes. Private increase. It has been reported that Source: World Bank, IMF, National Bureau of Statistics, Central Bank of UAE, Bloomberg Overall, the current scenario suggests 0% forward, the IMF and the UAE’s Ministry wealth has grown at the fastest pace approximately 83% of GCC millionaire encouraging near-term prospects for 2009 2010 2011 2012 2013 2014 of Economy predict a manageable in the UAE when comparing this to are more likely to invest in assets within the economy as demand is holding Oil & Gas Government Services Sector inflation rate of 2.5% for 2015, aided other GCC countries, which saw the the region due to their confidence in the up fairly well, although lower oil prices Others Financial Corporations by weak oil prices, which will allow the UAE’s wealth increase at an annual local economy’s stability and security Non-Financial Corporations and weaker demand from key export government to focus on investments growth rate of 25%. Thus, being and the ability to control and oversee markets may weigh on the economy. without worrying about runaway Source: National Bureau of Statistics a further indicator of growth within their investments with more ease. This prices. The consumer price index (CPI) the country and hence evidencing is compared to 64% last year, showing promotes analysts to believe that due increasing business prospects. a clear rise in business confidence and to the dollar appreciating in value with The influx of inward investment, further indicating the business growth respect to major currencies and with geographical reach and migration prospects for the UAE and wider GCC. approximately 20% to 25% of UAE rate levies way to diversification and a

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The GCC Wealth Insight Report 2015 UAE Population (published by Emirates Investment 10.0 Bank) further highlighted that 9 out 9.35 9.45 of 10 millionaires in the UAE showed 9.5 9.21 further optimism in relation to the 8.93 9.0 country’s economy which represented

s 8.44 approximately 89% of millionaires

on 8.5

illi REAL ESTATE surveyed. The UAE showed the highest M level of optimism, followed by Qatar 8.0 7.72 (83%) and Oman (75%). In addition to the increased confidence, business 7.5 leaders and the government of Dubai 7.0 have launched profound objectives OVERVIEW 2010 2011 2012 2013 2014 2015F MARKET which further position the UAE as one of the best countries in the world. The Source: National Bureau of Statistics government launched ‘Vision 2021’ to ensure that Dubai remains firmly on the UAE: Business growth prospects The UAE Unemployment Rate AJMAN global economy in 2015 footprint of the 4.8 4.6 world post the Expo and that efforts 4.6 placed continue to remain for many 4.3 4.4 4.2 4.2 years post the event. Umm Al Quwain, RAK e 4.2 Umm Al Quwain

UAE Emirate 4.0 AJMAN OVERVIEW Sharjah Emirate Business leaders in the UAE expect to SHARJAH EMIRATE RAK 3.8 3.7 AL HAMRIYAH face a number of growth constraints 0 5km FREE ZONE AL HAMRIYAH in 2015, but these are said to the 3.6 N FREE ZONE PHASE 2 AL HAMRIYAH 0 2 miles FREE ZONE PHASE 2 biggest constraints on growth. For as Percentag 3.4 AL JURF 1 SMEs, access to finance also remains INDUSTRIAL 2 3.2 Arabian Sharjah Emirate Ajman Emirate as a constraint. The lack of skilled 3.0 Gulf workforce is a major constraint for UAE AL JURF 1 2009 2010 2011 2012 2013 INDUSTRIAL 1 businesses irrespective of sector. It has Umm Al Quwain been reported that a particular sector Source: National Bureau of Statistics AL ITIHAD ST. of concern is the leisure and hospitality AL ZAHYA AL JURF 1 sector. Access to skilled labor and Fund (IMF), the population of the UAE government promoted education AL HUMAIDEYA 1 finding the ‘star’ talent that will enable AL SAFIA AL JURF 2 is expected to reach six million by 2015 as one of its upmost priorities. This AL HUMAIDEYA 2 AL NAKHEEL AL BUSTAN AL HELIO 1 hoteliers to truly stand out in relation . D from 5.4 million in 2010. The increase coupled with localization is slowly AL RAKAEB 1 R D E Y A to delivering a bespoke service along Z IN in the expatriate population, which changing the labor landscape of the MUSHARIF B AL JURF 2 D H O with the increased competition in the M AL RUMAILAH K AJMAN EMIRATE H accounts for over 80% of the country’s UAE which is still mainly made up of S AL RASHIDIYA sector is a constraint for hoteliers. With AL RAKAEB 2 AL ALYA population, constitutes the main expats from around the world. The aim AL AMERA AL RAWADHA the Expo expected to generate approx. growth drivers for increasing demand in the future is to create “a diversified AL MUNTAZI 1 Ajman Emirate 110,000 new jobs in the leisure and Sharjah Emirats and flexible knowledge-based economy AJMAN AL RAWADHA within various sectors. With a lack of AL NUAIEMIYA AL HELIO 2 hospitality sector as estimated by the INDUSTRIAL 1 skilled workforce being one of the major that is powered by skilled Emiratis and AJMAN government, hiring the caliber of staff INDUSTRIAL 2 constraints and the local population not strengthened by world-class talent AL ITIHAD ST. and at that scale may not be as easy as SHARJAH AL MUNTAZIZ being as largely represented within the to ensure long-term prosperity for the AL YASMEEN Ajman Emirate initially deemed. It is said that economic EMIRATE AL TALLAH OUTER SYPASSRO private sector, the UAE government UAE.” Sharjah Emirate SHARJAH RING RD. Ajman Emirate growth in traditional source markets is AL MUWAIHAT has noted that in order to promote Sharjah Emirate also making the move to Dubai less sustainability, action needs to be taken WASIT ST. Sharjah City attractive for some candidates. to minimize the constraint. This said, the National Agenda which Dubai, Abu Dhabi SHARJAH EMIRATE Dubai, Abu Dhabi According to the International Monetary was launched last year by the UAE

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Ajman is emerging as the rental hotspot While annual rates in Fujairah, Umm Al Ajman tourism revenues reached nearly This over 40% increase in the number in the Northern Emirates as budget- GDP Structure - Real Estate Related Industries Quwain and Ras Al Khaimah remained AED300 million in 2014, compared to of hotel and hotel apartment guests conscious residents, concerned about stable with nominal increases, Ajman’s AED220 million in 2013. The number of will also play a key role in terms of the escalating rents in Sharjah and 20% residential real estate sector received hotel and hotel apartments’ guests in attracting investor attention to the Dubai, relocate to the emirate, according a fillip, registering a high increase in 2014 increased to 850,000, compared Ajman area. 15% to the market experts in the UAE. The second quarter of 2014, and driven to about 600,000 in the previous years. experts’ view is that the demand for 10% by the emirate’s ultra-affordability, with affordable housing continued to attract two-bedroom apartments available new arrivals, principally from Dubai to 5% for between Dh30,000 to Dh45,000 Distribution by Real Estate Services-Jan & Feb 2015 Sharjah and Ajman in second quarter. per annum in comparison to up to The shift of activities to Ajman yields to 0% Dh80,000 in Sharjah during the period. 2008 2009 2010 2011 2012 the real estate industry moving faster Therefore, Ajman is now taking over than before in the city. Real Estate & Business Services the mantle as the relocation destination The consumer price index of Ajman Construction for budget-conscious residents as Restaurants and Hotels has been increasing for the past recent landlords in Sharjah ask higher than 39.60% 39.60% years, with registering 4% increase in average rental rates, particularly Source: National Bureau of Statistics 2011 and 3% of increase in 2012. The for brand new buildings in popular housing component of Ajman CPI has locations like Al Nahda, Corniche and also been increased 2% in 2012. On Al Wahda. However, this eagerness to the other hand, Ajman’s inflation rate capitalize on market opportunity is not recorded a decrease in 2012 despite being matched by transaction volume, the increase of CPI. Similar to the 125 4% confirming that budget issues are still a 0.99% ’, Ajman’s CPI is key driver. 16.83% 120 1.98% 0.99% expected to rise until the end of 2016 3% according to Ajman Department of 115 In addition to the residential real estate Economic Development. 2% industry, Ajman’s hospitality real estate Issuance of Title Mortgage Release Sales 110 Mortgage Under Grant Issuance of Property Affection Plan sector has also been restless. GDP of the Emirate of Ajman is 1% 105 Source: World Bank, IMF, National Bureau of Statistics, Central Bank of UAE, Bloomberg composed of five major sectors that contributed about 82% of the total value 100 0% 2010 2011 2012 added in 2012. The manufacturing CPI Housing sector comes at the forefront of the key economic sectors where its relative Source: National Bureau of Statistics 3-PROJECT OVERVIEW contribution amounted to about 37% of the value of GDP in 2012. The construction sector contributed about A) PROJECT FACTS AND FIGURES 15% of the total value of GDP in 2012, Constracts per Location followed by wholesale, retail trade and 40% OVERVIEW: PROJECT LOCATION: repairing services which accounted 35% 38% for 13% in the same year. The relative The Rashed 6 project involves 30% OO 10 minutes from Ajman City Centre share of the real estate and business 25% construction of a residential tower services amounted to 11% while the 20% comprising a ground floor, 4 parking OO 10 minutes from Ajman Beach transport, storage and communication 19% 15% levels and 25 additional floors Rashed sectors contributed about 6% of the Tower 6 is located in Al Humaid City, OO 25 minutes from Dubai Airport 10% 12% value of GDP in 2012. In addition to 10% 10% Ajman.One of the most up and coming 5% OO 25 minutes from Deira City Centre, Dubai these recent movements, the real 0% 4% 6% emirates, Ajman is well-known for its estate related components of GDP of Zora Sector City Center Northern Southern Manama Masfoot Sector East Sector The Eastern beautiful beaches, close proximity to Sector Sector Sector Ajman has been somewhat flat since all major landmarks, and user friendly 2008, with expectations of following a Source: National Bureau of Statistics policies for buying of property and similar path for the upcoming years. obtaining freehold status.

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B) PROJECT IMAGES C) CURRENT STATUS OF PROJECT

To be gathered from client

D) PROJECT FACILITIES AND AMENITIES

DD Health Club DD 24 hour security

DD Barbeque Area DD Business Centre

DD Swimming Pool DD Wireless Internet

DD Sauna and Steam DD Multi-purpose Hall

DD Billiards Room DD Jacuzzi

DD Laundry Room DD Exclusive Lobby

DD Prayer Room

E) SALES STATUS OF DEVELOPMENT

To be gathered from client

4-PROJECT INFORMATION - DEVELOPER

A) INFORMATION ABOUT DEVELOPER

Al Rashed Real Estate is an Ajman Based developer, mostly serving on the residential side of the real estate market. The company’s main business focus is Ajman and the area around the city.

Company Address : P.O.Box 8129, Ajman, United Arab Emirates Company Phone Number : +971-6-7015555 Company Website : www.alrashedrealestate.com

B) PROJECT STATUS AS PUBLISHED BY DEVELOPER

To be gathered from client

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Al Humaid City is a residential real directly opposite to . Al owned by R-Holding and the master C) PROJECT FACILITIES AND AMENITIES estate development being built in the Humaid City will contain 69 residential developer is Al Rashed Real Estate & emirate of Ajman, in the United Arab towers ranging from 25 to 35 floors, as it is designed and planned by Adnan DD Health Club DD Laundry Room DD Multi-purpose Hall Emirates. The freehold development well as medical, educational, Hotel and Saffirini. will be located along Emirates Road, shopping facilities. The development is DD Barbeque Area DD Prayer Room DD Jacuzzi

DD Swimming Pool DD 24 hour security DD Exclusive Lobby DD Sauna and Steam DD Business Centre 6-PROJECT INFORMATION - LAND DEPARTMENT DD Billiards Room DD Wireless Internet

D) PSALES STATUS OF DEVELOPMENT A) PROJECT INFORMATION N/A To be gathered from client B) INDEPENDENT PROGRESS MONITORING 5-PROJECT INFORMATION – MASTER DEVELOPER N/A A) INFORMATION ABOUT MASTER DEVELOPER 7-PROJECT INFORMATION Al Humaid City has been the master developer of the Humaid City with incentives of Ajman City. A) SALES PRICES B) INFORMATION ABOUT MASTER DEVELOPMENT Average Apartment Sales Prices (AED/SQF) 500

450

400

350

300

250 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2

Ajman - Overall Emirates City REIDIN

Master Plan Al Humaid City - Ajman

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After Ajman apartment sales prices third quarter of 2014. Assuming that As of the second quarter of 2015, increased 13% in the second half Al Humaid City would also follow a Ajman apartment market falls into the C) SUPPLY INFORMATION of 2014, it shows a drop of almost similar path, these areas became more range of below sales prices and unit

14% in the first half of 2015. So, the attractive with lower sales prices with sizes based on the unit types: Rashed 6 project consists of 496 UNIT TYPE UNIT SIZE NUMBER OF UNIT general sales prices in Ajman have some potential increase in the future, residential units including studios, Unit Type Unit Size Number of Unit been somewhat flat when compared in due to these areas becoming more one-bedroom and two-bedroom units. Studio 502.55 sqf 104 terms of Y-o-Y. Similar to the rest of popular among lower and mid-class The building has identical 24 floors on 1 Bedroom 709.16 - 785.51 sqf 292 the UAE residential real estate market, population. top of a unique first floor, leading to the 2 Bedroom 1,050.33 sqf 100 decreasing sales prices in Ajman is below supply breakdown: also becoming attractive in terms of

investors thinking long-term. UNIT TYPE SIZE RANGE (SQF) MIN PRICE (AED) MAX PRICE (AED) On the other hand, Emirates City, the Studio 350 -700 150,000 350,000 closest established neighborhood to 1 Bedroom 800-1100 260,000 550,000 Al Humaid City, has been recorded 2 Bedroom 1000-2100 350,000 1,000,000 a slightly decreasing trend since the

B) RENT PRICES

Average Apartment Rental Yields 10.0%

9.5%

9.0%

8.5%

8.0%

7.5%

7.0% 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 Ajman - Overall Emirates City

Giving the fact that sales prices to general Ajman rates, Emirates City decrease more than the rent prices in rental rate has also been increasing over overall Ajman, the rental rates has been the last one year. This could potentially increasing in the first half of 2015. As indicate that Emirates City and the most of the investors look for higher areas around would be very popular rental yields, Ajman becomes more among the investors in the near future. attractive for the investors with this increasing rental yield trend. Similar

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FMI-3.indd 20-21 8/26/2015 5:35:53 PM Produced by Freehold Mediation & Information RealEstate LLC. All information contained is private an confidential and solely for the named recipient Freehold Mediation & Information Real Estate LLC | #2901 / 2902 Saba Tower 1, Cluster E, Jumeirah Lake Towers, Dubai – UAE | +971 4 422 8000 | [email protected] | www.freehold.info

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