Heading 01 starts here: Futura Md BT, 30 points, Loose character spacing CBRE Green

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7. 8. ORANGE ENTERPRISING 2017 GREEN R 245 R 0 G 130 G 75 B 32 B 53 F58220 004B35

9. 10. REFRESHING ENERGISING REAL ESTATE ANNUAL GREEN GREEN R 0 R 191 MARKET UPDATE G 166 G 216 B 87 B 87 00A657 BFD857

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Source: Futura Lt BT, Italic, 7pts [ Source: Name, Q#, 2014. ]

Body text on each page ends here SALE RATES The residential sector experienced further modest declines in rentals during Q4 2016, with a 1% dip in average leasing rates recorded. This brought PLATEAU AS the annual decline to around 4%. With an expanding future pipeline of new SENTIMENT units, current deflation trends are likely to continue throughout 2017, with a SHIFTS IN THE large number of new homes expected to complete. However, there are signs that the transactional market is once again stabilising with no major TRANSACTIONAL change in average sales rates noted during the past two quarters, although MARKET on a year-on-year basis, residential values have still fallen by an average of 4%.

APARTMENTS VILLAS 2015 REAL ESTATE SALES VALUE OF AED130 2016 REAL ESTATE SALES VALUE OF AED103

-2.9% YEAR-ON-YEAR -7.2% YEAR-ON-YEAR

-4.7% YEAR-ON-YEAR -3.6% YEAR-ON-YEAR 2015 REAL ESTATE TRANSACTIONS OF 48,000 2016 REAL ESTATE TRANSACTIONS OF 41,776

* Dubai Land Department and published media figures

FUTURE 70,000 SUPPLY UNITS 2017 - 2019

The commercial office sector has evolved into a clear two-tiered market, with STRONG prime accommodation, particularly in the free zones, attracting strong demand CORPORATE amidst low levels of supply availability, sustaining rentals for well located Grade A office accommodation. However, the secondary market continues to DEMAND weaken, with a 12% annualised decline in rental values brought about by a SUPPORTS sustained oversupply of strata office product and a general softening of PERFORMANCE OF demand fundamentals. With large, efficient office spaces over contiguous floors in short supply, pre-leasing activity remains buoyant, underlining the PRIME OFFICES polarised market environment that has emerged. PRIME SECONDARY CBD LOCATIONS OFFICE LOCATIONS

0% YEAR-ON-YEAR -12% YEAR-ON-YEAR

EXISTING FUTURE STOCK 8.9 SUPPLY MILLION m2 0.9

3.0 MILLION m2 MILLION m2 2017 - 2019 2007 2016 DECLINING Dubai’s hospitality market continues to experience downward trends onCBRE room rates, with ADR’s decreasing by 8.4% during November as compared REVENUES AMIDST to the same period last year according to data from STR Global. However, positively occupancy rates actually increased by 7 points, resulting in a CHALLENGING RevPAR of AED682.2/room/night. On a November year-to-date basis, MARKET ADR’s decreased by 10.3%, whilst occupancy rates increased marginally by 0.5 points, with RevPAR reaching AED542/room/night. Publication Date

Despite the overall pressure on hotel performance, the number of visitors to the Emirate has continued to rise year-on-year during 2016. By the end of October 2016, Dubai had hosted 300,000 more people than at the same stage in 2015. During this period, the Top 10 source markets have remained unchanged, although India, Saudi Arabia and the United ADR -10.3% (YTD – Jan-Nov) Kingdom have continued to generate strong growth in tourist arrivals. OCCUPANCY 32,000 (YTD – Jan-Nov) FUTURE ROOMS 77% SUPPLY 2017 - 2019 * Figures from January to November. Source: for occupancy& ADR :STR Global

Supply in Dubai’s retail sector expanded by around 7% during 2016, SIGNS OF with the opening of a number of community centres and expansions EMERGING to existing retail destinations. The most notable addition was City Walk Phase II, which has attracted various new first to market PRESSURES IN concepts. Occupancy rates within prime centres such as Dubai Mall, RETAIL MARKET Mall of Emirates, Ibn Battuta Mall remain exceptionally high at close to 100%, although there has been some evidence of store closures as landlords look to freshen up the retail mix amidst more challenging retail conditions. Dubai remains the biggest regional draw for international retailers, with a host of new names entering the market, including Antonio Marras, Mustang Jeans, Discovery Channel which all opened their first Dubai stores this year. EXISTING STOCK 2.85 million m2

m2 VACANCY RATE FUTURE 900,000 AT MAJOR MALLS SUPPLY 2017 - 2019 <1%

A modest improvement is expected in the performance of the residential transactional market, although the rental sector is set to see further reductions as supply levels start to spike. We anticipate a fragmented market in the short term with affordable masterplan communities continuing to out perform the wider

marketplace as a flight to affordability prevails. 2017 2017 OUTLOOK Demand for free zone office accommodation is expected to remain strong, leading to the commencement of further speculative office schemes during the coming year, with locations such as Tecom and DIFC likely to see rising activity levels. However, there are signs that new requirements for onshore office spaces may be tapering off slightly which may constrain activity in other parts of the market. Whilst Dubai’s occupancy rates are forecast to remain high, the hospitality market is likely to experience further depreciation of room revenues during 2017 amidst rising supply levels, and a sustained period of US dollar strength which is negatively impacting the tourism and retail markets.

Despite showing great resilience in recent times, Dubai’s retail sector is expected to face mounting challenges over the next year with some retailers struggling to acclimatise to persisting economic headwinds, and the US dollar strength, which is impacting local market competitiveness and consequently retail sales. Heading 01 starts here: Futura Md BT, 30 points, Loose character spacing CBRE Green

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RESEARCH CBRE MENAT OFFICES Heading 02 starts here (if any): 1. 2. 3. Second page of new section: Body text starts here Matthew Green Dubai CBRE LIME BLUE

Director / Head of Research & Consulting, UAE Emaar Square GREEN GREEN Strategic Advisory Building 6, 8th Floor Page line: Fixed- do not delete Dubai, UAE Dubai, t: +971 4 437 7200 R 0 R 105 R 0 G 106 G 190 G 178 e: [email protected] Abu Dhabi B 77 B 40 B 211 Body text starts here: | Mussafah – Tarif Highway 006A4D 69BE28 00B2DD Arnhem Pro Nor, 10 points, Single line leading Simon Townsend United Arab Emirates One line paragraph spacing Director / Head of Valuation, Advisory & Consulting Abu Dhabi, UAE 4. 5. 6. Strategic Advisory MAGENTA PURPLE YELLOW Heading 03 sits in the body text box: Dubai, UAE Bahrain Futura Md BT, 10 points, CBRE Green t: +971 4 437 7200 Manama R 236 R 162 R 255 e: [email protected] Enma Mall, Management Office G 0 G 63 G 221 Text boxes have NO Internal Margins (Format Um Nassan Av, East Riffa, 925 B 140 B 151 B 0 EC008C shape/Text Box) Jelena Crnogorcic Manama, Bahrain A23F97 FFDD00 Senior Consultant Strategic Advisory Turkey 7. 8. Dubai, UAE Istanbul ORANGE ENTERPRISING t: +971 4 437 7200 Suleyman Seba Cad. No:48 GREEN e: [email protected] BJK Plaza A Blok A1-06 Besiktas, Istanbul R 245 R 0 G 130 G 75 Morocco B 32 B 53 F58220 004B35 Casablanca 97 Boulevard Al Massira, Al Khadra Casablanca, Morocco 9. 10. REFRESHING ENERGISING Cairo GREEN GREEN Regus Cairo Nile City Towers 22nd floor R 0 R 191 North Tower G 166 G 216 Corniche El Nil Ramlet Boulak B 87 B 87 00A657 BFD857 Cairo,

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Source: Futura Lt BT, Italic, 7pts [ Source: Name, Q#, 2014. ]

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