www.valustrat.com Real Estate Market 4th Quarter | 2019 Review VPI ValuStrat Price Index Residential The fourth quarter 2019 ValuStrat Price Index (VPI)-Residential, displayed an overall 5.0% annual and 0.8% quarterly decline in capital values. Villa and freehold apartment prices saw marginal QoQ declines of 0.5% and 1.8% respectively. Amongst freehold apartments, The Pearl witnessed the highest overall decline in values followed by West Bay Lagoon and Lusail. A quarterly capital depreciation of less than 2% was observed in clusters of Ain Khaled, Abu Hamour, West Bay Lagoon, Umm Salal Ali and Al Khor. The remaining clusters experienced no change in capital values. Gross yields for residential units averaged at an overall 5.0% adjusted by 6.1% for apartments and 4.5% for villas. VPI - Qatar Residential Capital Values 13 Villa and 3 Apartment Locations [Base: Q1 2016=100] 120 100.0 100 96.3 94.2 90.9 89.8 87.2 84.9 82.7 81.3 77.7 75.8 75.0 80 73.4 72.8 71.8 71.2 60 40 20 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 2018 2019 Source: ValuStrat 1 | Qatar Real Estate Market 4th Quarter 2019 Review Macro-Economic Snapshot • International Monetary Fund (IMF) projected Qatar Population real GDP of Qatar to grow by 2% in 2019 on the back of robust non-hydrocarbon sector growth and oil and gas production recovery 2,773,000 2019-Q4 2,674,000 • The state budget for 2020 was announced 2018 which forecasted a budget surplus of QAR 500 million and expenditure in major projects at 2,641,000 QAR 90 billion, amidst a continued conservative 2017 oil price estimate of $55 a barrel 2,597,000 2016 • Population is estimated at 2.77 million as of Q4 2019. World Bank projected population of Qatar 2,421,000 to grow to 2.88 million in 2020 2015 • Gold Line (11 stations) starting from Ras Bu 2,235,000 Abboud to Al Aziziya, Green Line (11 stations) 2014 connecting from Al Mansoura to Al Riffa and remaining stations of Red Line including 2,045,000 Hamad International Airport, Lusail, Qatar 2013 University and Katara were made operational 1,836,000 • During Q4 2019, oil export revenue reduced by 2012 17% YoY and imports contracted by 5% YoY Source: Planning & Statistics Authority (PSA) Consumer Price Index vs. Housing Index • During Q4 2019, the January 2016 – YTD Consumer Price Index (CPI) stood at 107.85 125 points (base year 2013) indicating a marginal 120 decrease of 0.6% 115 annually and 0.8% quarter wise 110 105 • Housing and Utility Expenses Index 100 decreased 2.3% YoY 95 and 0.9% QoQ Jul Jul Jul Jul Oct Oct Oct Oct Apr Apr Apr Apr Jan Jan Jan Jan Jun Jun Jun Jun Feb Feb Feb Feb Sep Sep Sep Sep Dec Dec Dec Dec Nov Nov Nov Nov Aug Aug Aug Aug Mar Mar Mar Mar May May May May 2016 2017 2018 2019 Consumer Price Index (2013=100) Housing, Water, Electricity, Gas and Other Fuels Source: Planning & Statistics Authority (PSA) Residential Supply • Total housing stock by end of 2019 was Qatar Residential Supply approximately 297,700 units with the addition 2016-2020 of 1,750 villas and apartments during Q4 2019 (’000 UNITS) • Apartment supply consisted of 1,600 units coming from project handovers in Lusail (Fox Hills, Al Kharaej and Marina District), The Pearl, Al Sadd and Al Mirqab 2020E • This year's Cityscape exhibition unveiled 10 298 notable residential projects such as Qetaifan 2019E Island North Phase 1 in Lusail, Gewan Island 7.7 290 2018 in The Pearl, Floresta Garden in The Pearl and 290 Al Khail in Mushiereib Downtown 2017 286 2016 • Projected completions for 2020 have been 280 adjusted upwards to 10,000 units due to delayed deliveries from 2019 Existing Expected Supply* *May be subject to significant downward adjustment Source: Planning & Statistics Authority (PSA), MEED Projects, ValuStrat Residential Sales • Median transacted ticket size for houses Residential Median Transacted Ticket Size increased by 6.5% quarterly and 3.7% annually -6.7% 3.7% Last 2 Years Last Year • Citywide transaction volumes for houses declined 3% annually, however on a quarterly basis, grew 18% • The median transacted price for residential houses was QAR 2.8 million where the five largest ticket sizes were seen in Al Wakrah and The Pearl 0.0% 6.5% Last 6 Months Last Quarter • 65 transactions were recorded for residential buildings where Al Sadd, Al Mansoura, Old Al Ghanim and Al Hilal saw the highest transacted values • During 2019, The Pearl and West Bay Lagoon Source: Ministry of Justice, ValuStrat saw 1,008 units sold (an increase of 72% YoY) worth QAR 2 billion in total, a 55% increase over the previous year 3 | Qatar Real Estate Market 4th Quarter 2019 Review Residential Rents • Residential median asking rents declined 6% Residential Median Asking Rents YoY and 1.1% QoQ • The median monthly asking rent for -16.2% -6.0% apartments fell marginally by 1% quarterly Last 2 Years Last Year and 5.8% annually. One-bedroom apartments experienced the highest annual fall in rents of up to 8% • Highest annual falls for asking rents up to 12% were experienced in Al Mansoura, Al Muntazah, Al Wakrah, Fereej Bin Mahmoud and Lusail • Apartments in Al Sadd experienced the least -2.7% -1.1% deductions in rents, down 4% YoY compared Last 6 Months Last Quarter to other areas • The median monthly asking rent for villas fell 1.2% QoQ and 8% YoY. 4-bedroom villas experienced the highest annual decline in rents of up to 12% • Villas within compounds in Duhail, Ain Khaled, Source: ValuStrat Abu Hamour and Al Waab saw the highest fall in annual rents by an estimated 7% while standalone villas in these areas reduced by an average 2% YoY Median Monthly Asking Rent (QAR) and Quarterly Change (%) Villas Apartments 7,000 4,500 Al Wakrah 7,750 -1% Al Mansoura 5,500 0% 11,000 6,250 9,000 5,250 Al Muraikh 10,500 -2% Lusail 7,250 0% 11,500 8,000 9,250 5,250 Abu Hamour 11,750 0% Al Sadd 6,750 0% 13,250 8,500 12,000 6,750 Fereej Bin Al Waab 13,000 -1% 7,000 -4% Mahmoud 13, 500 7,750 18,000 8,250 West Bay 18,750 -1% The Pearl 10,250 0% Lagoon 20,000 12,500 Three Bedroom Five Bedroom One Bedroom Three Bedroom Four Bedroom Average Quarterly Change (%) Two Bedroom Average Quarterly Change (%) Source: ValuStrat Source: ValuStrat Office Supply • 2019 began with an estimated 4.14 million Qatar Office Supply sq m of office Gross Leasable Area (GLA) 2016-2020 (Million sq m GLA) • 70% of the anticipated 1 million sq m GLA was completed during the year making the total 1.0 office stock 4.8 million sq m by the end of 0.7 4.8 2019 4.1 3.9 4.1 • Five office projects were added this quarter in 3.5 Lusail, Al Mirqab, C-Ring Road (Al Mansoura) and Al Sadd comprising 160,000 sq m GLA • Upcoming projects in 2020, currently under development totalled 1 million sq m GLA, 80% of which are located in Lusail (Fox Hills, Energy District and Marina District), Al Dafna and Musheireb Downtown whereas the 2016 2017 2018 2019E 2020E remaining mixed amongst Duhail, Nuaija, Al Existing Stock Expected Supply Hitmi, Al Sadd, Umm Ghuwailina and Al Source: MEED Projects, ValuStrat Muntazah Office Performance • Median office asking rents fell 17% YoY and Office Median Asking Rent (QAR/sq m/Month) 1% QoQ and Quarterly Change (%) • 2% quarterly drop in rents observed in Lusail, -2% -2% -2% -1% 0% -2% -3% as median monthly asking rents declined to QAR 88 per sq m. Newly opened buildings offered asking rents that ranged from QAR 95 to QAR 125 per sq m depending on size, quality and view with rent-free period up to 3 months • Offices along Salwa road experienced the highest quarterly decline in asking rents up to 3%, with rates that ranged from QAR 65 to QAR 100 per sq m • Offices listed for sale in Lusail had asking 118 98 88 86 84 80 76 prices that ranged from QAR 16,250 per sq m West C/D Ring Lusail Citywide Al Sadd Grand Hamad Salwa to QAR 20,500 per sq m Bay Road Avenue Road Median Asking Rate (QAR/sq m) Quarterly Change (%) Source: ValuStrat 5 | Qatar Real Estate Market 4th Quarter 2019 Review Retail Supply • Retail supply grew 5% YoY during 2019 Retail Malls and Shopping Centres reaching up to 1.89 million sq m GLA by Q4 (‘000 sq m GLA) 2019 330 • Due to delayed deliveries, an estimated 462,000 sq m (Boulevard Mall in Jeryan Jenaihat, 04 Mall in The Pearl, J Mall in Al Markhiya, Place Vendome in Lusail and Doha Mall in Al Maamoura) of organised retail 132 space is projected for completion in 2020 • Based on GLA and population figures, shopping centre GLA in Qatar is 660 square meters per 1,000 capita compared to the GCC average of 620 square meters per 1,000 capita 40 202 673 981 Neighbourhood Community Regional Super Regional (3k-10k sq m) (10k-30k sq m) (30k-90k sq m) (> 90k sq m) Existing Stock Expected Supply (till 2020) Source: ValuStrat Retail Performance • The retail market continued to remain tenant Distribution of GLA of Shopping Centres/Malls friendly; landlords offered lucrative incentives across Municipalities (e.g.