Higher Education in Coming of Age! Q2, 2018 Colliers International Education Advisory & Valuation Services team is solely focused on education related business (OpCo) and real estate (PropCo), from complex business related operational advisory to real estate related advisory. Our group has the expertise and knowledge essential to providing forward thinking solutions to any challenging education related decisions where success is measured in high quality care delivered in a cost eective way.

Nurseries | Kindergartens

K-12 Day & Boarding Schools

Special Needs Schools

Medical | Nursing | Pharma Colleges

Science | Arts | Business | Colleges & Universities

Vocational Training Institutes

COMMITMENT PASSION EXPERIENCE KNOWLEDGE INTELLIGENCE

USP

Market Research | Market Entry & Expansion | Equity & Debt Fund Raising Highest & Best Use Study | Market & Financial Feasibility Study Operator Search and Selection | Land, Property & Business Valuations

2 Higher Education in Dubai; Coming of Age | Q2 2018 | United Arab Introduction

With AED 6.8 billion of tuition revenues (academic year 2016/17) Dubai’s private K12 education market remains one of the most attractive and fastest growing markets in . During the same academic year Dubai hosted a total of 260 schools providing John D. Davis education to over 300,000 students of which 90% are in private Chief Executive Officer schools. & North Africa [email protected] However, compared to K12 market the higher education market in Dubai is still in infancy with only approximately 60,000 students in higher education institutions out of which 46,000 students are in private higher education institutions (2015/16 latest available) translating to only 20% and 15% of total K-12 private student population, offering just 13 majors. Higher Education enrolments in Dubai have been steadily increasing from 33,500 in 2011/12 to 46,000 2015/16 a CAGR of 8.4%. The primary reasons for the growth includes: Ian Albert >> A growing resident population. The population of Dubai has Regional Director increased from 2.1 million in 2012 to almost 3 million at the end Valuation & Advisory of 2017, a CAGR of 7.2% per annum. Middle East & North Africa [email protected] >> Students from other Emirates choosing to attend universities in Dubai as it offers a greater variety of courses and established brands. >> Similar to K12 education, a growing preference towards international higher education institutes amongst Emirati parents. >> Professionals seeking to complete their education or obtain an alternate degree on a part time basis along with their work commitment. Mansoor Ahmed >> Similar to healthcare tourism, Dubai has emerged as an Director (MENA Region) Education Tourism Hub as over one third of enrolled higher Development Solutions education students in Dubai come from abroad to study in the Healthcare, Education & PPP city, coming from 167 different countries. [email protected]

Poised to become a leading provider of higher education, regionally and internationally, Dubai requires an estimated 68,000 student places of which 50,000 are in private sector by 2025. Colliers International specialist Education Advisory & Valuation Services team in their first comprehensive white paper on Higher Education in Dubai, present key demand / supply analysis, market assessment and identify challenges and opportunities for operators and investors to enter into Dubai’s lucrative higher education sector.

Higher Education in Dubai; Coming of Age | Q2 2018 | 3 مقدمة

بلغت إيرادات الرسوم الدراسية في دبي 6.8مليار درهم خالل العام الدراسي 2017/2016، ليظل قطاع التعليم المدرسي الخاص في دبي واحداً من أكثر القطاعات جاذبية وأسرعها نموا ًعلى مستوى العالم. خالل العام الدراسي جون دافيس 2017/2016، بلغ إجمالي عدد المدارس في إمارة دبي 260 مدرسة تقدم رئيس تنفيذي الخدمات التعليمية ألكثر من 300 ألف طالب، ٪90 منهم ملتحقون الشرق األوسط وشمال إفريقيا بالمدارس الخاصة. [email protected]

ولكن بالمقارنة مع قطاع التعليم المدرسي، ال يزال سوق التعليم العالي في دبي في مراحله األولى، إذ ال يوجد سوى 60 ألف طالب فقط في مؤسسات التعليم العالي، 46 ألفاً منهم يدرسون في مؤسسات التعليم العالي الخاصة )أحدث البيانات المتاحة من 2016/2015(، أي بنسبتي ٪20 و%15 من إجمالي طالب التعليم المدرسي العام والخاص على التوالي، وال تقدم تلك المؤسسات إال 13 تخصصاً فقط.

إيان ألبيرت هذا وقد ارتفعت معدالت االلتحاق بالتعليم العالي في دبي من 33500 في مدير قسم االستشارات والتقييم اإلقليمي العام الدراسي 2012/2011 إلى 46000 في العام الدراسي 16/2015، بمعدل نمو الشرق األوسط وشمال إفريقياالتقييم واالستشارات سنوي مركب يبلغ .٪8.4 األسباب الرئيسية للنمو تشمل: [email protected]

< ارتفاع عدد المقيمين، حيث ارتفع عدد السكان في دبي من 1.2 مليون نسمة عام 2102 إلى قرابة الـ 3 ماليين في نهاية عام 7102، بمعدل نمو سنوي مركب يبلغ %2.7.

< الطالب القادمين من اإلمارات األخرى لاللتحاق بالجامعات في دبي لما تتمتع به من عالمات عالمية مشهورة وما تقدمه من تخصصات أكثر تنوعاً. منصور أحمد مدير منطقة الشرق األوسط وشمال إفريقيا < تنامي ميل اآلباء في اإلمارات نحو إلحاق أبنائهم بمؤسسات التعليم حلول التطوير والرعاية الصحية والتعليم وشراكات العالي العالمية أسوة بما هو سائد في قطاع التعليم المدرسي. القطاعين العام والخاص [email protected] < على غرار قطاع السياحة الصحية، برزت دبي كمركز للسياحة التعليمية حيث أن أكثر من ثلث الطالب الملتحقين بمؤسسات التعليم العالي في اإلمارة قد أتوا من 761 دولة مختلفة للدراسة فيها.

تسعى دبي الحتالل الريادة في مجال التعليم العالي على الصعيدين اإلقليمي والدولي، إال أنها بحاجة لتوفير األماكن لما يقرب من 68 ألف طالب، 50 ألفاً منهم في القطاع الخاص، بحلول عام 2025. في أول تقرير شامل له حول قطاع التعليم العالي في دبي، قدم فريق كوليرز إنترناشيونال المتخصص في التعليم واالستشارات والتقييم تحليالً مهماً للعرض والطلب وتقييماً للسوق، كما قام برصد التحديات والفرص المتاحة أمام المشغلين والمستثمرين للدخول إلى قطاع التعليم العالي مرتفع الربحية في دبي.

4 Higher Education in Dubai; Coming of Age | Q2 2018 | United Arab Emirates Higher Education in UAE

The overall education sector of the United Arab Emirates (UAE) is governed by the Ministry of Education (MoE), which regulates and oversees several subsidiary educational authorities, as well as implements the federal mandate.

Higher Education in Dubai; Coming of Age | Q2 2018 | United Arab Emirates 5 Higher Education Sector in the UAE

The Regulatory Framework & Relevant Authorities

The Education sector of the United Arab Emirates (UAE) is The Ministry of Higher Education and Scientific Research governed by the Ministry of Education (MoE), this regulates and oversees higher education and scientific research in UAE. oversees several subsidiary educational authorities and implements Regulation and development of the education sector in Dubai is the federal mandate as highlighted in the adjacent chart. overseen by the Knowledge and Human Development Authority Under the MoE are several other national level regulators (“KHDA”). including; the Ministry of Higher Education and Scientific KHDA’s role is to ensure that private educational institutes in Research and Commission for Academic Accreditation. These Dubai are established and operate according to the highest quality two bodies are primarily responsible for the higher education of standards and is responsible for the growth, direction and quality the country. of private education and learning in Dubai.

Education Authorities / Councils in UAE R S T O L A U Education G Council E Commission R for A L ca d

A e

N M m

i i

O n c

I i

s A T t

c r

c A y

r

e

N o d f MINISTRY OF

i

H t

a Knowledge

i

g t

EDUCATION i

h o & Human e n r Development

E Authority d u c a ti on & Sc ch ientific Resear

Fujairah Sharjah Education Education Zone Zone

Ras Al Ajman Khaimah Education Education Zone Zone

6 Higher Education in Dubai; Coming of Age | Q2 2018 | United Arab Emirates UAE Vision 2021 National Agenda

The UAE Vision 2021, a national charter drawn up UAE Vision 2021 National Agenda in 2010 by H.H. Sheikh Mohammad bin Rashid Al Impact on Higher Education Maktoum, calls for the overall development of the UAE. Comprising of four pillars: responsibility, destiny, knowledge, and prosperity. the Vision aims to make Key sectors that will be impacted by the UAE Vision 2021 the UAE among the best countries in the world in time National Agenda include the following: for the Golden Jubilee of the Country in 2021.

The knowledge pillar of the charter emphasizes on the development of a first-rate education system; requiring a complete transformation of the current Technology education system and teaching methods. It aims to equip all schools, universities and students with The technology sector is one of the pivotal sectors required smart systems and devices as a basis for all teaching to activate the country’s diversification policy away from the methods, projects and research. hydrocarbon base.

Ultimately, the UAE will focus on developing human As a critical base sector for the foundations of the capital aspects of innovation, research, science, and knowledge economy the aim is to incorporate technology technology. To achieve this, a shift in the teaching- into society through the establishment of technology and learning process is necessary to equip students with innovation focused higher education institutes. Key public high-order thinking. funding initiatives include The Masdar Institute of Science and Technology and Khalifa University’s various scientific The growth of technology and creativity based programs. industries and lifestyles has, as it has around the world, changed the preference and emphasis for UAE Colliers research identifies the private universities are based students higher education. This top down and responding to shifting market conditions by offering new bottom up demand has seen the introduction of new programs focusing on technology such as Artificial Intelligence courses from the University sector. and 3-D Animation.

Renewable Energy

Focus on renewable energy is also inline with Vision 2021 and various initiatives have taken across the UAE including establishment of the City of Masdar and renewable energy solutions alogside nuclear power electricity generation.

The UAE’s renewable energy goals require a highly skilled workforce. As a result the country is undertaking numerous efforts in order to ensure its human capital base is well equipped.

Higher Education in Dubai; Coming of Age | Q2 2018 | United Arab Emirates 7 Higher Education in the UAE

Number of HEPs and Students in the The UAE higher education sector is largely dominated by private sector operators UAE (Public vs Private) with 71 institutions making it amongst the most privatized education systems in the world. The public sector comprises only 9 institutes, as depicted in the Public Sector Private Sector adjacent exhibits. However, in terms of total number of students the public sector 9 71 share is 36% compared to private sector share of over 64%. Inst. Private Sector Institutes Higher education enrolments are growing faster than the population with growth similar to K12, higher education student enrolments increasing at almost 8% against a background population growth of 6.0%.

Total student enrolments in the UAE have gradually increased for both private and public sectors, however, increase in private sector enrolments was CAGR of 8.5% during 2009/10- 2013/14 compared to 6.5% for the public sector. 35,4% 64,6% Public Sector Students Private Sector Students

45,385 82,894 over Public Sector 38,000 Growth at CAGR 6.5% new seats (2009/10 – 2013/14) will be required by 2025 100 000

Public & Private University Students 75 000 by Field of Study 50 000 8.4 14.1 25 000 5.3 Foundation 0 Diploma 2009/10 2015/16 2020/21 2025/26 Bachelor’s Masters — Doctorate (0%) 72.3

Private Sector Growth at CAGR 8.5% (2009/10 – 2013/14)

225 000

Public & Private University Students 200 000 by Major over 175 000 105,000 new seats Engineering Business 150 000 will be required by 2025 125 000

Media 19.0 & Design 30.5 100 000 2 75 000 IT 6.7 4.1 31.8 50 000 Education 25 000

Other 0 2009/10 2015/16 2020/21 2025/26

8 Higher Education in Dubai; Coming of Age | Q2 2018 | United Arab Emirates Higher Education in Dubai

Driven by a commitment from Dubai’s leadership, who consider education as the key driver to building a knowledge economy, in the last 30 years the number of universities in Dubai has grown from just three to sixty-two. This includes thirty- three international universities from twelve countries including; Australia, India, the United Kingdom, and the United States the majority offering a wide range of programmes at undergraduate and postgraduate levels.

Higher Education in Dubai; Coming of Age | Q2 2018 | United Arab Emirates 9 Dubai has constantly encouraged the establishment of international university branches (Higher Education Providers - HEP Branches) to provide high quality Types of HEPs international degrees to its citizens and expatriate residents. HEP (Higher Education Providers) Branches can be Operating In Dubai located in or outside a Free Zone area. The three main types of HEPs are:

A university, college, academy, or institute HEPs in Dubai located in a Dubai Free Zone, which acts – Free Zones vs Main Land HEP Branch for, on behalf of, and in the name of a HEP headquartered outside a Free Zone (usually another country). 37,1% Mainland A university, college, academy, or institute 62,9% Free zones which provides academic programs leading to the awarding of the higher education HEP Local qualifications. HEP Locals can be either funded privately or by the Dubai Government. (Private/ These institutions are licensed by the Government) Ministry of Education (MoE) with programme Distribution of HEPs accreditation by the Commission for Academic Across Various Free Zones Accreditation (CAA). These institutions may also obtain international accreditation.

DSO: 1 DCCA DHCC: 2 A University or college which provides academic programmes leading to the awarding 33 DIFC: 2 DMCC: 1 HEP Federal of higher education qualifications. HEP Federals are established by federal decree.

Dubai Creative Cluster Authority (DCCA) enjoys the advantage of allowing part-time student employment at any companies registered within any of the DCCA Free Zone Clusters. This has been implemented Under Order No (1) (Feb 2016) of 2016 which authorizes students to work part-time. This offers students a valuable opportunity to get essential experience and exposure to industries that will form the backbone of the knowledge based and also help entities to absorb local talent. Furthermore, this may assist students in sustaining the cost of living and pursuing higher education in Dubai.

10 Higher Education in Dubai; Coming of Age | Q2 2018 | United Arab Emirates HEP Branch Total:

DHCC 24 AUTHORITY DHCC FREE ZONE DHCC HEP HEP BRANCH 0 Local Total: HEP LOCAL 1

DIFC AUTHORITY DIFC 14 FREE ZONE DIFC HEP BRANCH 2 HEP LOCAL 0

D3 AUTHORITY DCCA FREE ZONE D3 HEP BRANCH 0 HEP LOCAL 1

DKP AUTHORITY DCCA FREE ZONE DKP HEP BRANCH 8 HEP LOCAL 3

DCCA DSO DIAC AUTHORITY DCCA AUTHORITY DSO AUTHORITY DCCA FREE ZONE DIC FREE ZONE DSO FREE ZONE DIAC HEP BRANCH 1 HEP BRANCH 0 HEP BRANCH 10 HEP LOCAL 0 HEP LOCAL 1 HEP LOCAL 6

DMCC AUTHORITY DMCC FREE ZONE DMCC HEP BRANCH 2 HEP LOCAL 0

DACC AUTHORITY DACC FREE ZONE HEP BRANCH 1 A majority of the Higher Education Providers “HEPs” in HEP LOCAL 0 Dubai are based in Free Zones most of these located in Dubai Creative Clusters Authority (DCCA).

DCCA consists of 10 Free Zone clusters, each established with a specifc purpose and industry focus. Clusters under DCCA include Dubai Academic City, , , , Dubai Industrial Park, , , , Dubai Outsource City and Dubai Design District.

Higher Education in Dubai; Coming of Age | Q2 2018 | United Arab Emirates 11 Average Annual Fees Undergraduate (AED)

Tuition Fees

Based on capacity utilization, majority (>80%) of AED the students attend HEPs with a fee range between AED 25,000 and AED 65,000 – indicating the affordable tuition fee bracket.

25 35 45 55 65 75 85 Where else, 70% of HEPs offering postgraduate programs have tuition fees ranging from Average Annual Fees Postgraduate (AED) AED 50,000 up to 110,000. Key field of Studies

Based on the latest data available, business related courses remain the most popular with the highest number of enrolments. AED They account for more than a 50% share increasing at a CAGR of 14.2% per annum. This compares to 12.5% in Information 30 50 70 90 110 130 150 Technology, while foundation programs witnessed a decline of 8.0% in student enrolment during the period 2010/11-2015/16

Other Over the last five years student enrolment in Engineering and Foundation Architecture remains the highest compared to other fields, growing at a CAGR of 22.3% and 35.8% respectively. The market Law research conducted by Colliers indicates that these fields are preferred by Emirati students who prefer courses containing science and math. IT 19.0 30.5 2 The foundation programs, which usually consist of an intensive Media 6.7 year of English Language courses, decline indicates that Dubai & Design 4.1 K12 schools are fulfilling this component by offering better English 31.8 Business language skills amongst students.

Student enrolment in other fields of study such as Law, Health Engineering and Medicine and Education have witness a decline at a CAGR -14.5% during the same period.

12 Higher Education in Dubai; Coming of Age | Q2 2018 | United Arab Emirates Dubai Education Tourism – A top destination for higher education Similar to healthcare tourism, Dubai has emerged as an Education Tourism Hub, with over one third of enrolled higher education students coming from abroad to study in the city.

A Global Student Accommodation Dubai offers all the living and educational experiences (GSA) Group survey conducted with an aim to keep up on students attending higher with the globally-oriented, and education in Dubai revealed Technology technologically advanced world. that over 50% of the Driven respondents had only ever Cultural considered studying in Dubai, Diversity Students in Dubai lead a the city being their first choice comfortable life wherein they for study destination. Other are free to choose key reasons for enrollment from the wide range included universities offering Student of opportunities cultural diversity, quality of Life provided across international institutions, better social, cultural and lifestyle experience and sporting experiences centrally global location. designed to enrich their overall university Safety & experience. The HEPs in Dubai Security are mandated to Dubai is globally positioned with one take significant Ease of third of the world’s population living precautionary Travel within a four-hour flight from Dubai, and measures to ensure students safety two-thirds are within an eight-hour flight. and security on campus. Home travel connectivity also serves as an attractor and importantly ease of getting a tourist and student visa

India Student population diversity 30 8 Egypt Students enrolled in HEPs 6 The students in Dubai comes from 167 countries, with 30% from the 6 Nigeria MENA region (including UAE), 56% from Asia, 5.5% Europe, 5.1% Africa Other 45 5 and remaining from other countries. The key source markets are Jordan

% 30 US UK Iran

25 India Russia Ireland France Austria Canada Lebanon Pakistan Australia 20 International diversity of HEPs

15 The current HEP Branches operating in the Dubai Free Zones are from 12 10 different countries. Figure 6 shows the 5 international diversity of the different HEPs in the Free Zones. 0

Higher Education in Dubai; Coming of Age | Q2 2018 | United Arab Emirates 13 Projected Growth in Higher Education in Dubai

During the academic year 2015-2016, the latest published data, just over 60,000 students were enrolled in 56 HEPs in Dubai, including full-time and part-time students, out of which 76% or 46,000 were in private institutions.

Overall HEP Growth at CAGR 7.9% (2009/10 – 2015/16)

120 000 over 68,000 100 000 new seats will be required 80 000 by 2025 in Dubai

60 000

40 000

20 000

0 2009/10 2015/16 2020/21 2025/26

Private HEP Growth at CAGR 7.6% (2009/10 – 2015/16) over 100 000 50,000 new seats 80 000 will be required by 2025 60 000 in Dubai

40 000

20 000

0 2009/10 2015/16 2020/21 2025/26

14 Higher Education in Dubai; Coming of Age | Q2 2018 | United Arab Emirates Conclusions

Similar to K12 market, Based on Colliers Colliers International’s the higher education projections, Dubai will Education Valuation market in Dubai is require an additional and Advisory Services coming of age and 50,000 places in acted as trusted advisor Dubai is expected to private higher education to many investors become a leading player sector by 2025 brining and operators to start regionally and continue it to a total demand of and expand their its drive internationally 68,000. operation in the Middle with opening of East Region and in more campuses of Dubai by providing international higher market assessment, education institutions in feasibility studies, entry Dubai. strategies, business planning and assisting in debt and equity raising and most importantly find the right partner.

If you are looking to expand into the region or in Dubai please contact our Regional Director Mansoor Ahmed for any assistance.

Higher Education in Dubai; Coming of Age | Q2 2018 | United Arab Emirates 15 For further information, Operating from please contact: John D. Davis countries Chief Executive Officer 69 Middle East & North Africa on [email protected] Ian Albert Regional Director 6 continents Valuation & Advisory [email protected]

Mansoor Ahmed $2.7 billion Director in annual revenue Middle East and North Africa Development Solutions, Healthcare, Education & PPP 2 billion [email protected] square feet under management Colliers International | MENA Region

15,400 Dubai | United Arab Emirates professionals and staff +971 4 453 7400

Colliers International Middle East

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Copyright © 2018 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.