DUBAI Report
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ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION DUBAI REport - Q2 2014 • • The first half of 2014 has been a period of stabilisation and consolidation, with more moderate growth levels of 6% for apartment sales and 3% for villa sales in Q2 2014. • Buyer’s interest focused on less established areas such as communities located along the Mohamed Bin Zayed Road corridor. • Rental activity was characterised by demand stemming predominantly from newcomers to the city. On average, apartment rental rates increased by 4% in Q2 2014 throughout Dubai, and villas were up by 5%. • The office market remained stable in Q2 2014, with no growth in sales prices and only a moderate increase of 2%, on average, for rental rates. • Asteco anticipates that the second half of the year will see renewed interest and activity in the market. DUBAI | ABU DHABI | AL AIN | SHARJAH | QATAR | JORDAN IN THE MIDDLE EAST FOR 29 YEARS © Asteco Property Management, 2014 asteco.com | astecoreports.com For additional information: 600 54 7773 ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION 0% 4% 11% 8% 0% 11% 2% 9% 5% DUBAI SALES 28% 26% 52% 62% 22% 36% 47% 46% 31% 3,500 DUBAI RESIDENTIAL SALES AP3,000ARTMENT 0% SALES PR4%ICE RAN11%GE (Q2 2014)8% AND0% PERCENTA11% GE CHAN2% GE 9% 5% 28% 26% 52% 62% 22% 36% 47% 46% 31% • Similar to the first quarter, Q2 2014 witnessed marginal growth; with sales prices up 3,5002,500 2 3,0002,000 0% 4% 11% 8% 0% 11% 2% 9% 5% 6% and 3% for selected apartment and villa developments respectively, as the market 28% 26% 52% 62% 22% 36% 47% 46% 31% AED/ft 1,500 continued to absorb the rapid growth witnessed in 2013. 3,5002,500 2 1,000 3,0002,000 • A two-tier market became even more apparent as buyers who were priced out of the more 500 AED/ft 2,5001,500 1,950 2,150 770 1,000 1,700 3,300 1,200 3,000 1,200 1,600 1,400 2,000 1,100 1,500 800 1,100 1,300 2,900 2 0 popular and established areas such as Downtown Dubai, Dubai Marina and Palm Jumeirah 2,0001,000 focused on other areas, such as Jumeirah Village, Dubai Sports City and Dubai Silicon Oasis 500 DIFC Discovery Downtown Dubai Marina Greens Jumeirah Beach Jumeirah Lakes Jumeirah Village Palm Jumeirah AED/ft 1,500 Gardens Dubai Residence Towers 1,950 2,150 770 1,000 1,700 3,300 1,200 3,000 1,200 1,600 1,400 2,000 1,100 1,500 800 1,100 1,300 2,900 where prices remained low in comparison. These areas witnessed stronger growth rates of 1,0000 Min Max Percentage Change (Q1-Q2 2014) Percentage Change (Q2 2013-Q2 2014) approximately 10% in Q2 2014. 500 DIFC Discovery Downtown Dubai Marina Greens Jumeirah Beach Jumeirah Lakes Jumeirah Village Palm Jumeirah Gardens Dubai Residence Towers 1,950 2,150 770 1,000 1,700 3,300 1,200 3,000 1,200 1,600 1,400 2,000 1,100 1,500 800 1,100 1,300 2,900 • Interestingly, established affordable locations such as Discovery Gardens and International 0 Min Max Percentage Change (Q1-Q2 2014) Percentage Change (Q2 2013-Q2 2014) DIFC Discovery Downtown Dubai Marina Greens Jumeirah Beach Jumeirah Lakes Jumeirah Village Palm Jumeirah City, where price increases were the strongest over the last 12 months, saw only 4% and Gardens Dubai Residence Towers 3% growth respectively in Q2 2014. Any further growth in these communities will position Min Max Percentage Change (Q1-Q2 2014) Percentage Change (Q2 2013-Q2 2014) them outside the affordable range, and consequently lead to a reduction in buyer interest. VILLA SALES5% PR ICE RAN0% GE (Q28% 2014) AN5%D PERCENTA2% GE CHAN0% GE0% 3% 0% • At the same time, less budget sensitive buyers in the premium market are still drawn to 44% 11% 30% 25% 12% 30% 22% 55% 10% established locations. However, many sellers having raised their prices following the Expo 4,500 4,000 5% 0% 8% 5% 2% 0% 0% 3% 0% 2020 announcement and have no intention of reducing their asking prices until buyers 3,500 44% 11% 30% 25% 12% 30% 22% 55% 10% match their expectations. This has led to a reduction in transaction levels, especially for 3,0004,500 2 5% 0% 8% 5% 2% 0% 0% 3% 0% higher priced properties within established communities. 2,5004,000 3,500 44% 11% 30% 25% 12% 30% 22% 55% 10% AED/ft 2,000 3,0004,500 • We expect further stabilisation in Q3 due to the traditional slowdown of transactions 2 1,500 4,000 1,0002,500 witnessed during summer and Ramadan. 3,500 AED/ft 2,000 500 3,000 1,100 1,200 1,000 1,450 1,150 1,450 900 1,100 1,200 1,700 850 1,100 1,200 1,600 2,200 4,000 1,000 1,200 • However, Asteco anticipates the post summer months together with Cityscape are likely to 2 1,500 0 1,0002,500 Al Furjan Arabian Victory Heights Green Jumeirah Jumeirah Meadows Palm Springs see several new project announcements that will test demand in the market, giving buyers AED/ft 2,000 500 Ranches Community Islands Village Jumeirah new opportunities to invest. 1,500 0 1,100 1,200 1,000 Min 1,450 Max 1,150 1,450 Percentage 900 Change 1,100 (Q1-Q2 1,200 2014) 1,700 Percentage 850 1,100 Change 1,200 (Q2 1,600 2013-Q2 2014) 2,200 4,000 1,000 1,200 1,000 Al Furjan Arabian Victory Heights Green Jumeirah Jumeirah Meadows Palm Springs • Recent new launches include projects by Dubai Properties Group such as Manazel Al Khor 500 Ranches Community Islands Village Jumeirah in Culture Village; Rahat Villas at Mudon; and 200 new units at Remraam. 0 1,100 1,200 1,000 Min 1,450 Max 1,150 1,450 Percentage 900 Change 1,100 (Q1-Q2 1,200 2014) 1,700 Percentage 850 1,100 Change 1,200 (Q2 1,600 2013-Q2 2014) 2,200 4,000 1,000 1,200 Al Furjan Arabian Victory Heights Green Jumeirah Jumeirah Meadows Palm Springs • Damac also launched several projects, including NAIA Hotel and Hotel Apartments, 34 Ranches Community Islands Village Jumeirah OFFICE SALES PRICEMin RANGMaxE (Q2 2014)Percentage ANChangeD (Q1-Q2 PER 2014)CENTA GPercentageE CHAN ChangeG (Q2E 2013-Q2 2014) premium Fendi Villas at Akoya Drive, and two hotel apartments at Jumeirah Village, The Vantage and The Constella. 0% 0% 0% 0% 0% 0% • Emaar continued its string of new launches with Opera Grand, the first residential 50% 6% 28% 50% 46% 9% 2,500 development in the Opera District at Downtown Dubai. 0% 0% 0% 0% 0% 0% 2,000 50% 6% 28% 50% 46% 9% • Finally, Danube launched its first project in the UAE called Dreamz, which consist of 171 2,500 townhouses with 3 and 4 bedroom configurations located at Al Furjan. 2 1,500 0% 0% 0% 0% 0% 0% 2,000 50% 6% 28% 50% 46% 9% AED/ft 1,000 DUBAI OFFICE SALES 2,500 2 1,500 2,000500 • Office sales remained stable with no significant growth witnessed during Q2. AED/ft 1,000 1,000 1,400 1,600 2,200 550 600 700 800 850 1,200 750 1,000 2 0 • However, a major transaction was concluded with Emirates REIT, Dubai’s first real estate 1,500 500 Business Bay DIFC Dubai Investment Park Dubai Silicon Oasis Jumeirah Lakes Towers Tecom C AED/ft 1,000 investment trust, purchasing more than 15 vacant office floors in Index Tower, at DIFC. The 1,000 1,400 1,600 2,200 550 600 700 800 850 1,200 750 1,000 Min Max Percentage Change (Q1-Q2 2014) Percentage Change (Q2 2013-Q2 2014) transaction was estimated to be worth over AED 600 million. 0 500 Business Bay DIFC Dubai Investment Park Dubai Silicon Oasis Jumeirah Lakes Towers Tecom C 1,000 1,400 1,600 2,200 550 600 700 800 850 1,200 750 1,000 Page 2 © Asteco Property Management, 2014 asteco.com | astecoreports.com For additional information: 600 54 77730 Min Max Percentage Change (Q1-Q2 2014) Percentage Change (Q2 2013-Q2 2014) Business Bay DIFC Dubai Investment Park Dubai Silicon Oasis Jumeirah Lakes Towers Tecom C Min Max Percentage Change (Q1-Q2 2014) Percentage Change (Q2 2013-Q2 2014) ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION DUBAI LEASING APARTMENT RENTAL RATES (Q2 2014) AND PERCENTAGE CHANGE VILLA RENTAL RATES (Q2 2014) AND PERCENTAGE CHANGE Average Rental Rates (AED’000/pa) % Change Average Rental Rates (AED’000/pa) % Change Studio 1 BR 2 BR 3 BR 2 BR 3 BR 4 BR 5 BR Q1-Q2 Q2 2013- Q1-Q2 Q2 2013- DEVELOPMENT DEVELOPMENT 2014 Q2 2014 Min Max Min Max Min Max Min Max 2014 Q2 2014 Min Max Min Max Min Max Min Max Al Furjan - - 170 200 190 220 240 260 4 17 Deira 38 50 55 80 80 110 115 150 0 49 Arabian Ranches 150 215 180 280 275 350 285 450 4 22 Discovery Gardens 52 57 65 75 85 95 n/a n/a 3 36 Green Community - - 220 250 230 260 230 270 1 1 Downtown Dubai 75 90 100 125 150 190 200 300 4 24 Jumeirah - - 175 230 220 330 270 500 12 40 Dubai Marina 70 90 90 140 140 200 150 250 6 45 Jumeirah Islands - - - - 300 360 320 420 1 5 International City 35 43 48 53 65 70 n/a n/a 1 66 Jumeirah Village 140 170 155 185 170 220 - - 11 20 Jumeirah Beach Residence 75 90 100 140 120 200 160 250 10 39 Meadows - - 220 270 230 300 270 350 4 4 Jumeirah Lakes Towers 65 75 80 105 120 150 145 185 4 54 Mirdif - - 120 175 140 200 160 200 0 38 Jumeirah Village 50 60 70 95 90 115 115 135 6 42 Palm Jumeirah - - 250 370 400 600 500 1,000 0 13 Palm Jumeirah n/a n/a 130 160 150 220 190 320 6 21 Springs 145 155 180 220 - - - - 9 31 Sheikh Zayed Road 75 85 100 120 135 170 165 220 0 22 OFFICE RENTAL RATES (Q2 2014) AND PERCENTAGE CHANGE DUBAI OFFICE LEASING Average Rental Rates (AED/ft2/pa) % Change • Compared with Q1 2014, office leasing in Dubai was relatively slow in Q2, with only certain areas witnessing any growth.