1/ 2/ 3/ 4/ ABU SHARJAH FUJAIRAH DHABI

87% 5% 3% 2% land area land area land area land area

5/ 6/ 7/ RAS AL UMM AL AJMAN KHAIMAH QUWAIN

2% 1% 0.3% 77,903km2 land area land area land area land area

UAE Property Review Special Edition:

Historic Review 2008-2014 and 2015 Outlook UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT Q4 2014 Xxx

2014 Market Highlights Dubai 04 22 UAE Comparison Northern Emirates

Asteco’s 2014 Annual Property looks at the performance of the various UAE property markets from 06 36 the peak in 2008 to the low point in 2011/2012 and to current market levels reached in 2014. The review focuses on the sales and leasing markets in Abu Dhabi, Al Ain, Dubai, Sharjah and the Abu Dhabi Al Ain Northern Emirates covering residential villa and apartment and office asset classes. 10 44 In addition the report outlines Asteco’s outlook for the UAE market highlighting the potential risks and opportunities in 2015.

© Asteco Property Management, 2015 asteco.com | For additional information: 600 54 7773

2 © Asteco Property Management, 2015 © Asteco Property Management, 2015 3 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 2014 Market Highlights 2014 Market Highlights

Abu Al Ain Dubai Northern

Dhabi • The Al Ain residential market • In Q4 2014, sales prices for Emirates recorded rental growth in apartments were still 6% 2014, with the villa segment higher than last year for the • The first half of the year • The residential sales mar- outperforming the rest of same period – but 4% lower witnessed strong levels of ket started strongly in 2014 the market with 16% growth than at their peak in Q2 2014. growth and high occupancy marked by significant price compared with the same pe- In comparison, villa sales levels throughout the North- growth and supported by riod last year. prices were stable compared robust levels of transac- with Q4 2013, although they ern Emirates due to an in- tions. However, the final half fluctuated over the year, crease in Dubai’s rental rates. proved quieter with limited peaking in Q2 and declining • However, during Q3 & Q4 transactions. thereafter. 2014 there were fewer peo- • Conversely, the rental market • The most transacted commu- ple arriving in the Northern started relatively slower than nities in Dubai, in 2014 were Emirates, which put pressure the sales market but ended & JBR, Interna- on leasing rates positively as landlords took tional City, • Rental rates in Sharjah re- advantage of a strong tenant followed by JLT.* mained 50% cheaper than demand and increased their similar properties in Dubai. rates. • The highest recorded num- ber of transacted villas in Moreover, rates in Ajman • The office market remained 2014 were located in the were 60% more affordable. broadly unchanged over an Meadows & Springs devel- • Sharjah announced the Tilal extended period of stability. opments followed by Arabian City project in Q3 2014, which Ranches.* is the first development to permit all nationalities to pur- * Source: Reidin chase property on a 100-year leasehold basis in the Emir- ate. SHS

Sharjah APARTMENT APARTMENT APARTMENT APARTMENT +9% RENTS +10% RENTS +6% +7% RENTS RENTS

4 © Asteco Property Management, 2015 © Asteco Property Management, 2015 5 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 UAE Comparison UAE Comparison UAE Rental Methodology Comparison

The following pages provide a comparison of average rental rates and sales prices across the various emirates as at Q4 2014.

APARTMENT RENTAL RATES AVERAGE APARTMENT RENTS, Q4 2014 RESIDENTIAL APARTMENT RENTAL DATA - TWO CATEGORIES: (LOWER-END TO MID MARKET PROPERTIES) AFFORDABLE TO MID-MARKET PROPERTIES: • In Q4 2014, rents in Dubai and Abu Dhabi were almost on par, Studio Includes all major residential developments throughout the UAE, excluding the High End & Prime properties below. with Abu Dhabi 5% higher than Dubai on average. This is in stark 54 53 25 29 27 contrast to the period from 2009 to 2011 where the rent differ- 19 19 ential between both cities was significantly higher of up to 35%, HIGH END & PRIME PROPERTIES: which caused many residents to live in Dubai and commute to AED 000’s pa Abu Ajman Dubai Fujairah RAK Sharjah UAQ Includes communities and specific developments where average rates are significantly higher than the overall market. the Capital. Dhabi

• On average, rental rates in Sharjah were 50% lower than in similar 1BR 75 71 DUBAI 40 properties in Dubai, and those in Ajman were 60% cheaper, on 33 35 28 39 22 DIFC, Downtown Dubai, Culture Village, Dubai Marina, Greens, JBR, Palm , Sheikh Zayed Road and World average. Trade Centre Residences in Dubai.

• Based on Asteco’s research, it appeared that residents typical- AED 000’s pa Abu Ajman Al Ain Dubai Fujairah RAK Sharjah UAQ Dhabi ly considered relocating to Sharjah, when rent differential was ABU DHABI over 50%. This indicated that the differential between both cities, 2BR Saadiyat Island, Al Reem Island, Al Raha Beach, Corniche, Eastern Corniche, Al Bateen Area or Zayed Sports City. though substantial, was not sufficient to generate a large number 108 100 44 40 51 50 of relocations. 41 29

• Rental Rates in Fujairah and Umm Al Quwain remained the lowest

AED 000’s pa Abu Ajman Al Ain Dubai Fujairah RAK Sharjah UAQ OFFICE RENTAL COMPARISON: in the UAE. Dhabi

Compares the highest quality office space in Abu Dhabi, Dubai, Sharjah and Al Ain as well as typical supply. It should 3BR 150 137 be noted that prime supply in Dubai and Abu Dhabi consists of internationally recognized Grade A standard buildings, 80 66 55 58 47 40 whereas in Sharjah and Al Ain supply is typically of lower quality.

AED 000’s pa Abu Ajman Al Ain Dubai Fujairah RAK Sharjah UAQ Dhabi AVERAGE PREMIUM APARTMENT RENTS UAE SALES PRICE COMPARISON: Q4 2014 245 Reviews Affordable, Mid-End and High End product in Dubai, Abu Dhabi, Ras Al Khaimah and Ajman where significant 221 freehold / long leasehold supply is available for sale in the UAE. The classification is as follows: 165 165 115 90 116 82 DUBAI AED 000’s pa

AFFORDABLE - , , Downtown , Dubai Investment Park, Dubai Silicon Oasis, Studio 1BR 2BR 3BR Dubai Sports City, Dubailand, IMPZ, International City, Jumeirah Village, MotorCity. Abu Dhabi Dubai MID END - , Dubai Festival City, Green Community, Greens, , Tecom C, Uptown . HIGH END - Culture Village, DIFC, Downtown Dubai, Dubai Marina, JBR, Palm Jumeirah and WTCR. OFFICE RENTAL RATES UAE OFFICE RENT COMPARISON Q4 2014 ABU DHABI • Office rental rates in Dubai remained the highest in the UAE. After 220 AFFORDABLE - Al Reef Downtown. taking into consideration the cost and quality of living in Dubai & Abu Dhabi, many companies still opted to setup in Dubai rather 135 MID END - Najmat Abu Dhabi and lower end properties in Shams Abu Dhabi, Marina Square, Al Muneera and Al 93 105 than the capital. 78 70 Zeina. 45 60 HIGH END - Saadiyat Island, Shams Abu Dhabi, Al Bandar and higher end properties in Marina Square, Muneera, • Sharjah and Al Ain predominantly appeal to local companies op- erating in these cities and, therefore, demand levels remained Prime Typical and Al Zeina. relatively subdued. Abu Dhabi Dubai Sharjah Al Ain

6 © Asteco Property Management, 2015 7 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 UAE Comparison UAE Sales Price Comparison Q4 2014

AVERAGE APARTMENT SALES PRICE COMPARISON Q4 2014

AED 2 Million Buys... 1864

1495

1233 1241 1000 892 785 665 555

300 390 in Abu Dhabi Affordable Mid End High End 1BR 2BR 3BR 3BR Villa 3BR TH Al Bandar Marina Square Najmat Al Ghadeer Al Reef Abu Dhabi Dubai Ras Al Khaimah Ajman

• At the high end of the, apartment sales market, prices in Dubai were still significantly higher than in Abu Dhabi by 24%, on average. This was due to a larger pool of potential buyers, including international investors, who were encouraged to purchase through clearer rules and regulations as well as proper freehold ownership in designated areas.

• However, at the mid and affordable segments of the market, prices in Abu Dhabi were equal or higher in Dubai than in Dubai due to a marked lack of properties within these segments. Indeed, to date, Al Reef Down- town is the only purpose built affordable community in Abu Dhabi, whereas Dubai has a large number 1BR 2BR 3BR 2BR TH 3BR TH 4BR Villa DIFC Greens Motor The Springs JVC Reem (off-plan) of master plans within this segment, including International City, Discovery Gardens, parts of Dubai City Silicon Oasis and Jumeirah Village.

• With the affordable segment being one of the most transacted in Dubai, Asteco are of the opinion that a similar offering in Abu Dhabi would attract considerable levels of demand.

• The Northern Emirates also offer some properties for sale, with Ras Al Khaimah attracting the most de- mand, due to an excellent offering of waterfront master-planned communities, some of which include golf courses, at very attractive prices. in Northern Emirates

4BR Duplex 2BR Villa 4BR 3BR Golf Course 3BR Villa RAK with pool Mina Al Arab View Villa Sharjah, Al Zahia & sea view Al Hamra (off-plan)

8 © Asteco Property Management, 2015 © Asteco Property Management, 2015 9 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Abu Dhabi

Sales Leasing RESIDENTIAL • Sales rates increased by 15% because of a shortage of • Rental rates for premium and high-end units in- KEY TRENDS quality stock for sale on the secondary market. creased across all residential types, and in particular for new developments in Investment Areas. Abu Dhabi 2014 • The sales market performed strongly during the first half of the year with purchasers committed to in- • The largest increases were recorded on Saadiyat Is- creased sales prices. land and Marina Square on Reem Island.

Highlights • Sales price growth and volumes slowed significantly in • Rental rates for lower quality units remained relatively the second half of 2014. stable, despite the removal of the rent cap.

TRANSACTION • Some of the newly launched off-plan projects record- • There remained a good level of transaction activity as ACTIVITY ed high sales levels in the primary market such as Al tenants continued to upgrade to better quality units. Hadeel, Ansam and Mamsha Al Saadiyat. • Recently handed over high-end projects achieved • There was limited transaction activity on the second- high occupancy levels leading to an increase in rental ary market for existing quality developments. rates.

POPULAR • Popular master-planned developments for sale in- • In terms of leasing, popular areas were quality driven. • Growing confidence and improved sentiment in the Abu DEVELOPMENTS cluded Saadiyat Island and Al Raha Beach (Al Bandar Investments areas and non freehold areas inside Abu / AREAS and Al Muneera). Dhabi City and on the Mainland attracted a high de- Dhabi market, together with a shortage of quality residen- mand for good quality properties with buildings close • Reem Island proved to be an attractive area providing tial supply resulted in a significant growth in sales and rental to full occupancy in selected developments. more mid-market units. rates, particularly for new mid to high quality developments. OFFICES • Sales for the office market remained restricted due • The office market remained relatively stable with high • Premium units in all Investment Areas recorded strong de- to a lack of buildings offering office space for sale; the vacancy rates ranging from 35% to 40% throughout only ones that were available included Infinity Tower Abu Dhabi. mand with full occupancy for most of the prime and high-end and Sky Tower on Reem Island, and the upcoming developments. ADDAX Tower at City of Lights. • Low quality office buildings continued to see ade- crease in rental rates as companies upgraded to bet- ter quality space. • Several new off-plan projects launched in 2014 including Al Hadeel and Ansam (Aldar), Mamsha Al Saadiyat (TDIC), The Waves (Aabar), Maryah Plaza (Farglory) and Al Reef 2 (Mana- zel).

Annual Growth in 2014

Rents: +10% +12% 0%

Apartments Villas Grade A-Offices

Sales: +15% +16% Apartments Villas APARTMENTS Abu Dhabi Apartment sales prices up by 15% compared Supply Delivered In 2014: Apartments: 4,000 Units Villas: 1,500 Units Offices: 55,0002 m GLA

+15% with SALES PRICES Q4 2013.

10 © Asteco Property Management, 2015 © Asteco Property Management, 2015 11 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Abu Dhabi

Sales Leasing

APARTMENTS • Market activity is expected to remain relatively stable • Rental rates are expected to record modest increases throughout 2015. Prices will become more competi- in 2015 due to a prevailing “flight to quality” scenar- Abu Dhabi 2015 tive as new projects are handed over. io, which will put pressure on older and lower quality properties.

• Quality projects in Investment Zones will continue to Outlook be sought after and therefore occupancy rates are expected to remain high.

VILLAS • The villa sales market will remain relatively flat, with • Villa rental rates are expected to increase slightly due limited prime and high-end units available for sale in to a shortage in quality villa units. However, increased the primary and secondary markets. utility costs could slow potential rental increases. • Since 2013, the Abu Dhabi real estate market has continued to strengthen, with investors being rewarded with sustained • Occupancy rates will remain high and transaction ac- tivity will also be strong. rental and capital appreciation. Our forecasts indicate that this pattern will continue throughout 2015, with stability or OFFICES • The office sales market is expected to remain un- • Office rents in strata-owned space could come under changed in 2015, with limited transaction activity. pressure as owners of the soon to-be-handed-over growth across all sectors. ADDAX Tower compete to secure tenants.

• Asteco expects market conditions will remain positive throughout the UAE in the next few years with an encourag- ing investment climate particularly in Abu Dhabi.

• The Abu Dhabi rental market is expected to prove particularly strong with rental increases likely to exceed 5% per annum. However, the sales market is expected to remain relatively stable with new projects anticipated for handover in both In- vestment Areas and on the island.

• The City of Lights development on Reem Island contains the lion’s share of new supply including Hydra Avenue (residen- tial) and ADDAX Tower (commercial). Total Supply Delivery Anticipated in 2015

• Two towers (C21 & C22) by Aabar are expected to be handed over by mid 2015 in the Saraya masterplan, providing addi- APARTMENTS tional prime supply to the market. 4,700 Units • Changes to utility charges will come in to effect in 2015. This may curtail a rise in villa prices due to potentially significant VILLAS increases to running costs. 500 Units 2 OFFICES 340,000 m GLA

Major Projects Due For Handover 2015

HYDRA AVENUE – CITY OF LIGHTS, REEM ISLAND ADDAX TOWER – CITY OF LIGHTS, REEM ISLAND ADIB HQ – AIRPORT ROAD AABAR PROJECT - SARAYA

1212 © Asteco Property Management, 2015 © Asteco Property Management, 2015 13 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Abu Dhabi Abu Dhabi Rental Rates 2008 to 2014

Apartments TYPICAL 2BR APARTMENT RENT EVOLUTION 2BR 2008 TO 2014

• The table below shows the average rental rates for the fourth quarter of each year since 2008 to 0% -45% 0% -11% -5% 13% 8% 2014 for a selection of apartment areas. The bar chart opposite represents the average rental 246 rates for a 2-bedroom apartment for all areas in Abu Dhabi. 141 135 136 130 • As shown, the rental market peaked in 2008 and began to decrease in 2009 due to the global finan- 121 115 cial crisis. Rates bottomed out in 2011 and recovery of the rental market began in 2012. AED 000’s pa • Apartment rental rates increased by an average of 18% per year since 2011 but were still 41% lower than in 2008 at the end of 2014. However, rents were 9% higher, on average, compared with 2008 2009 2010 2011 2012 2013 2014 2013. 2BR Apartment Rental Rate % Annual Change

1BR 2BR 3BR % Change Average Apartments Rental Rates 2013- 2008- as at Q4 (AED 000’s pa) 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2014 2014

Prime Properties Abu Dhabi Island - - - - 125 125 125 - - - - 156 165 175 - - - - 230 235 265 9 na Investment Areas - - - 120 130 130 140 - - - 165 165 165 180 - - - 220 250 255 255 5 na High End Properties Central Abu Dhabi 165 110 90 80 85 85 90 250 140 140 130 110 135 145 290 175 175 160 130 165 175 6 -42 Abu Dhabi Island Corniche 185 135 120 95 85 105 120 280 160 160 155 125 135 150 365 240 240 225 180 225 245 11 -38 Khalidiya / Bateen 185 135 120 90 85 105 120 280 160 160 140 125 155 160 365 230 230 190 155 210 215 5 -40 Al Raha Beach - - 110 110 100 100 110 - - 155 145 140 150 155 - - 205 200 185 190 200 6 na Marina Square - - - - 80 85 100 - - - - 110 130 140 - - - - 140 170 175 8 na Investment Areas Saadiyat Beach - - - - - 110 120 - - - - - 150 175 - - - - - 190 210 12 na Shams - - - 95 95 110 115 - - - 130 130 150 155 - - - 165 165 170 195 8 na Mid & Low End Properties Central Abu Dhabi 145 85 70 60 55 70 75 215 120 100 80 100 100 105 265 145 145 110 90 140 145 5 -48 Abu Dhabi Island Corniche 155 120 95 80 70 80 80 225 145 145 120 100 105 120 325 175 175 155 130 155 170 9 -48 Khalidiya / Bateen 155 120 100 75 65 80 80 225 130 130 95 90 110 120 325 170 170 125 110 135 170 14 -48 Investment Areas Reef Downtown - - - - 60 70 80 - - - - 75 85 100 - - - - 90 100 130 22 na Off Island MBZ & Khalifa City - 75 55 40 40 60 65 - 90 60 45 45 85 90 - 115 80 70 65 110 120 8 na

14 © Asteco Property Management, 2015 © Asteco Property Management, 2015 15 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Xxx Abu Dhabi Rental Rates 2008 to 2014

The tables on this page represent the average rental rates for the fourth quarter of each year since 2008 for offices and villas. TYPICAL 4BR VILLA RENT EVOLUTION 4BR 2008 TO 2014

Villas 0% -41% -8% -14% 2% 3% 12% • Villa rates at the end of 2014 increased by approximately 20% since their lowest point in 2011, 433 and were 43% lower than at their peak rates in 2008. Villa rental rates for all of Abu Dhabi have increased by 4% since last year. 257 239 235 214 • On average, a four-bedroom villa in Abu Dhabi could be leased for AED 239,000 per annum in Q4 203 208 2014, whereas the average in 2011 was AED 203,000 and AED 433,000 in 2008 as shown in the AED 000’s pa adjacent bar chart. Offices 2008 2009 2010 2011 2012 2013 2014 • In the last five years office rental rates have decreased by 46%, on average. However, marginal growth was witnessed since last year. 4BR Villa Rental Rate % Annual Change

3BR 4BR 5BR % Change Average Villa Rental Rates 2013- 2008- as at Q4 (AED 000’s pa) 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2014 2014

Khalidiya / Bateen 395 275 235 210 190 185 195 460 290 310 225 230 240 285 530 325 330 280 255 280 245 3 -48 Mushrif / Karama / Manaseer 390 235 220 180 170 195 205 455 270 260 230 210 190 230 535 315 345 260 240 240 265 12 -49 Khalifa A & B 360 190 155 125 100 130 135 400 205 180 150 135 170 150 445 255 220 180 170 185 180 -4 -61 Al Raha Gardens 380 205 185 175 165 175 190 420 230 210 210 200 210 243 475 240 260 270 270 285 290 8 -43 Golf Gardens 265 240 190 210 225 200 285 260 255 260 345 335 340 325 325 3 na Al Reef 115 130 105 120 135 140 155 125 150 160 165 175 150 170 190 10 na Saadiyat Beach Villas (Standard) 275 295 295 305 295 330 400 400 400 3 na Al Raha Beach 220 250 250 300 255 255 320 320 0 na

% Change Average Office Rental Rates 2013- 2009- as at Q4 (AED / sq ft / pa) 2009 2010 2011 2012 2013 2014 2014 2014

Recent Build Prime Fitted 260 195 177 149 153 153 0 -41 Prime Shell & Core 210 167 130 116 116 116 0 -45 Older Stock Good 200 140 111 98 93 93 0 -54 Typical Building 160 111 70 70 70 74 6 -54 Low Quality Building 110 74 60 56 56 65 16 -41

16 © Asteco Property Management, 2015 © Asteco Property Management, 2015 17 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Abu Dhabi Abu Dhabi Sales Prices • Villas prices in Q4 2014 increased by 16%, on average, compared with the previous year; this was 2008 to 2014 driven by a lack of available stock to all nationalities. • Despite high prices, the Saadiyat Beach villa community was in high demand from both investors and end-users due to the development’s exclusivity. The development features a golf course, pre- • On average, apartment sale prices in Q4 2014 were 26% lower than in Q4 2008, for the areas mium hotels and an extensive beach within proximity to the new Cultural District. Prices for beach shown in the graph but 15% higher than the previous year. villas started from AED 5 million for a standard 4BR villa and AED 16 million for a St Regis branded 4BR unit. • A current shortage of residential stock for sale in high-end developments has resulted in high ask- ing prices on the secondary market. The achieved high sales volumes on newly launched projects • Al Muneera and Al Zeina at Al Raha Beach also featured a selection of sought after villas and town- in Abu Dhabi, such as Ansam on Yas Island, Al Hadeel at Al Raha Beach and Mamsha Al Saadiyat, houses, which have sea or canal views; prices started from AED 4 million for a 4BR. proved a pent-up demand existed for the right type of product. • Al Raha Gardens and Golf Gardens remained popular with UAE National investors, as these com- munities consistently yielded attractive rental returns.

AVERAGE APARTMENT SALES PRICES AVERAGE VILLA SALES PRICES Q4 2008 TO Q4 2014 Q4 2008 TO Q4 2014

-31% -11% -19% 25% 17% 13% 17% 9% 21% -6% -15%

2000 1550 1750 1750 1375 1550 1190 1200 1375 1425 1115 2 1350 1425 2 1020 1025 1025 1300 1100 1175 900 870 1000 1175 1225 890 860 850 975 825 810 965 1100 770 770 925 730 AED per ft 900 AED per ft

Raha Gardens Golf Gardens Saadiyat Beach Villas (Standard) Marina Square Raha Beach / Al Bandar Raha Beach / Al Muneera

-31% -40% 13% 10% 2% 21% 11% -11%

2450

1750

1475 2 1200 1325 1100 1175 1250 1250 1000 2 1015 1130 1050 950 825 930 AED per ft 900 845 660 550 745 600 500 AED per ft 600 560 540 520

Raha Beach / Al Zeina Reef Downtown Sun & Sky Towers Al Reef Villas Hydra Village

2008 2009 2010 2011 2012 2013 2014 % Change 2008-2014 % Change 2013-2014 2008 2009 2010 2011 2012 2013 2014 % Change 2013-2014 % Change 2008-2014

18 19 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Abu Dhabi Abu Dhabi Area & Rent Affordability Map The following map highlights some of Abu Dhabi’s most popular residential areas, in terms of their affordability for rent or sale.

Most Expensive Expensive Mid Priced

11 Affordable Arabian Gulf 36

1 Al Bandar – Raha Beach 21 2 Al Bateen Wharf 3 Al Gurm 4 Al Maqtaa 5 Al Muneera – Al Raha Beach 6 Al Nahyan Camp 7 Al Raha Gardens 8 Al Rayanna 27 9 Al Reef 33 25 10 Al Zeina – Al Raha Beach 11 Baniyas 31 34 12 Bateen Airport Area 16 13 Bateen Area 14 Bawabat Al Sharq 32 17 15 Capital District (ADNEC) 22 16 CBD / Tourist Club Area 6 17 Corniche 18 Danet Abu Dhabi 1 10 9 19 Eastern Mangroves 2 20 Golf Gardens 13 5 21 Hydra Village 19 28 22 Khalidia / Al Hosn / Al Manhal 23 Khalifa City A 7 24 Khalifa City B 18 12 25 Maryah Island 26 MBZ City 3 15 20 23 33 27 Mina 35 30 8 28 Mushrif / Karama / Manaseer / Muroor 29 Officer’s City 4 37 30 Rawdhat Abu Dhabi 31 Reem Island - Marina Square 29 32 Reem Island – Najmat Abu Dhabi 33 Reem Island – rest of Shams Abu Dhabi 34 Reem Island – The Gate District 35 Rihan Heights

36 Saadiyat Beach District 24 37 The Hills

26 22 11

Note: Area classification by affordability is provided for indicative purposes only as most areas in Abu Dhabi offer various types of residential units, from affordable 14 to high end. As such, the map colour cod- 11 ing takes into account the most prevalent type of product and exceptions of a lower and / or higher price could be available.

20 © Asteco Property Management, 2015 © Asteco Property Management, 2015 21 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Dubai

Sales Leasing RESIDENTIAL • Prices peaked in Q2 2014 from the low point in Q4 • Rental rates were 7% higher than in Q4 2013, and as KEY TRENDS 2011, recording an overall increase of 75% and 60% such many tenants were faced with an increase or no Dubai 2014 for apartments and villas respectively. change in rates rather than a reduction when leases were renewed. • The second half of 2014, however witnessed a mod- erate reduction in sales prices as sellers were more Highlights willing to match buyer’s expectations. TRANSACTION • The slowdown in transactional activity was significant, • 2014 witnessed a slowdown in leasing activity as rent- ACTIVITY with 25% less transactions for villas and apartments, al rates stabilised and many tenants remained in their combined, for the year compared with 2013, accord- existing accommodation rather than relocate. ing to Reidin.

• The slowdown was mostly felt in the second half of the year as Q4 transactions levels were down by 40% compared with the same period last year.

• Off-plan sales slowed as buyers had a wider choice of • Following two years of strong growth for Dubai’s residential completed products to choose from.

sales, 2014 was a year of stabilisation with moderate growth POPULAR • Dubai Marina and JBR, International City, Downtown • In addition to the popular freehold areas, apartments during the first two quarters; this was followed by a decline DEVELOPMENTS Dubai, and Jumeirah Lake Towers were the areas that for rent in areas such as and Deira were in / AREAS had the most sales transactions for apartments in demand due to the affordability of properties and the in prices during the second half of the year. 2014. general convenience of these locations.

• As a result of strong price growth, transactional activity • The most popular villa developments were Meadows, • Villas in the and Jumeirah areas were Springs and Arabian Ranches accounting for 50% of in demand. However, most of the supply consisted slowed down significantly during the second half of 2014 as all villa sales. of older or very large villas, and as such the offering new supply was delivered to the market and low global oil targeting expatriate families for smaller new villas was prices impacted key source markets such as the CIS and GCC insufficient. countries. OFFICES • Demand for offices was minimal, by comparison, as • Office leasing in 2014 improved gradually over the office transactions represented less than 10% of all year with the last quarter being the most active in • Strong rental rate growth of 18% and 13% year-on-year was property transactions in Dubai, according to Reidin. terms of completed transactions.

witnessed since Q4 2011 for apartments and villas respec- • Buyers are typically smaller-sized businesses looking • The type of tenants were small-sized companies set- tively. for their own space in strata-owned buildings. ting up a small office for trade license purposes as well as large local and international companies ex- • Business Bay was the most transacted office area fol- panding or consolidating their business with require- lowed by Jumeirah Lake Towers. ments of +/- 10,000 to 15,000 square feet.

• Similar to recent years, fitted office space was the most in demand, with buildings well connected to the Annual Growth in 2014 transportation network performing best.

Rents: +7% +4% +12%

Apartments Villas Offices

Sales: +4% +1% +9% Apartments Villas Offices Number of Residential transactions in 2014 down by 25%

RESIDENTIAL -25% TRANSACTIONS compared to 2013 Supply Delivered In 2014: Apartments: 7,000 Units Villas: 650 Units Offices: 300,0002 m of GLA

Source: Reidin

22 22 © Asteco Property Management, 2015 © Asteco Property Management, 2015 23 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Xxx

Sales Leasing APARTMENTS • We expect transaction activity to reduce across the • If all the supply is delivered to the market as per cur- Dubai 2015 market as buyers become more cautious, especially rent projections, Asteco anticipates a reduction in when purchasing property for lease, as pressure on rental rates over the year, potentially leading to ten- rents and yields may increase in light of upcoming ant movement in the market and therefore increased Outlook supply. transactional activity as new developments are re- leased. • A continuation of low oil prices as well as sanctions imposed on various countries may have an effect on demand for high-end luxury properties, which could lead to a potential reduction in transactional activity • Sales values are largely underwritten by cash buyers and as well as a moderate reduction in sales prices. despite the small correction in values in the second half • The overall sales prices of units in sought after com- of 2014, the level of interest in the Dubai market remains munities are likely to see relative stability in sales pric- strong. es, whilst secondary communities, with limited facili- ties and amenities are likely to be faced with declining • In fact, there are two completely different markets; the leas- values. ing market which reacts relatively quickly to changes in sup- VILLAS • With a substantial number of off-plan schemes • Villa rental rates are anticipated to remain stable in ply and could therefore soften in 2015/2016 as new supply launched in 2014, 2015 is likely to see a reduction in the most desirable areas, whilst marginal declines in sales prices for off-plan villas and see more attractive less desirable areas can be expected. enters the market and the sales market driven by cash buyers payment plans being offered by developers. • A more significant drop in rental rates could be wit- and general market sentiment. • Prices for completed villas are anticipated to remain nessed in 2016 and beyond as the large number of stable throughout the year, and communities with projects announced in 2013/2014 are completed. minimal facilities and amenities could witness a drop Why buy off-plan? in value. OFFICES • With current sales rates stabilising and office rental • Rental rates appeared to have reached an equilibri- rates witnessing potential increases in the medium um in 2014. If landlords remain reasonable in their ⎷ Ability to purchase property at a discount compared to com- term, office yields are expected to improve andas asking rates, we expect transactional activity to im- such, purchasing office space may become anin- prove during 2015. pleted developments. This is especially beneficial in well es- creasingly attractive option in 2015. tablished areas. • Certain buildings, especially single owned, good qual- ity properties could potentially see some rental in- ⎷ Developers providing attractive financing for off-plan prop- creases in 2015. erties and banks lending up to 50% reduces the buyer’s fi- nancial burden. Total Supply Delivery Anticipated in 2015 ⎷ Rules and regulations for off-plan projects are in place in Du- bai to protect the buyer’s investment. APARTMENTS 12,000 Units Tips on buying off-plan

VILLAS 2,000 Units ⎷ Property should be viewed as a medium to long term invest- ment. The potential for capital appreciation is generally max- imised at completion and ideally a couple of years down the OFFICES 350,000 m2 of GLA line.

⎷ Ensure the contractor is already mobilised on site and all RERA approvals are in place. Major Project Launches in 2015

⎷ Conduct proper due diligence such as checking the develop- er’s track record from the Lands Department. Marina Arcade – Dubai Marina Reef Residence – Jumeirah Village ⎷ Research the area to find out what and when additional sup- ply will come up in the same vicinity.

24 24 © Asteco Property Management, 2015 © Asteco Property Management, 2015 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Dubai Dubai Rental Rates 2008 to 2014

Apartments TYPICAL 2BR APARTMENT RENT EVOLUTION 2BR 2008 TO 2014 • The table below provides average rental rates for the fourth quarter of every year from 2008 to 2014 for a selection of apartment areas. 0% -37% -12% -17% 17% 36% 7% 158 122 • Apartment rental rates increased by 65% since 2011 but are still 25% lower than 2008. Rental rates 114 are 6% higher, on average, compared with last year. 99 87 84 72 • Asteco believes that the rapid growth witnessed from 2011 onwards, and especially during 2013,

led to rental rates peaking. Going forward, any further increases will make many areas unafforda- AED 000’s pa ble to their target market leading to decreased demand and tenant outflow. 2008 2009 2010 2011 2012 2013 2014 • Furthermore, any new projects that are due for delivery in the next 12 to 18 months will result in a softening of rental rates throughout 2015. 2BR Apartment Rental Rate % Annual Change

• On average, a 2-bedroom apartment for all Dubai areas combined, leased for AED 122,000 per an- num in Q4 2014, whereas the average in 2011 was AED 72,000 and AED 158,000 in 2008 as shown in the adjacent bar chart.

1BR 2BR 3BR % Change Average Apartment Rental Rates 2013- 2008- as at Q4 (AED 000’s pa) 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2014 2014

Business Bay 55 45 60 90 93 85 70 85 130 135 115 100 125 178 180 3 Deira 88 48 40 37 35 68 65 103 55 55 53 53 85 90 138 83 75 70 75 135 133 0 -12 Discovery Gardens 100 58 45 38 45 70 70 135 85 70 53 70 83 80 -2 -36 Downtown Dubai 133 85 70 68 80 98 118 185 120 100 100 125 160 170 275 165 150 150 180 228 245 10 -10 Dubai Marina 130 78 63 63 75 105 113 180 110 90 80 100 140 158 245 160 125 115 135 178 210 14 -14 Greens 120 65 58 55 65 85 83 160 88 78 75 100 135 148 180 130 115 105 130 155 173 7 -13 International City 70 44 27 23 24 43 46 93 63 39 38 38 65 63 1 -33 Jumeirah Beach Residence 115 85 73 70 80 108 118 168 118 95 90 100 135 163 203 148 115 110 140 175 200 15 -1 Jumeirah Lakes Towers 110 65 50 45 55 83 90 160 85 65 65 75 110 133 210 118 85 85 100 148 168 15 -19 Jumeirah Village 35 45 70 65 53 70 95 103 80 90 120 130 4 Palm Jumeirah 200 113 90 90 95 135 150 228 145 120 120 140 175 208 300 200 170 170 190 223 243 13 -18 Sheikh Zayed Road 160 83 70 68 83 98 113 203 130 105 100 110 148 148 290 175 120 120 135 195 200 5 -30

26 © Asteco Property Management, 2015 © Asteco Property Management, 2015 27 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Dubai Dubai Rental Rates 2008 to 2014 TYPICAL 4BR VILLA RENT EVOLUTION 4BR 2008 TO 2014 0% -38% -9% 0% 19% 14% 5% Villas 338 274 260 • As shown below, the rental market for villas and apartments reached a low 211 229 192 in 2011, with rates starting to increase from 2012 onwards. 191

• Villa rates increased by approximately 55% since their lowest in 2011, with AED 000’s pa Q4 2014 rates still 20% lower than in Q4 2008 but up 4% since last year.

• On average, a typical 4BR villa for all Dubai areas combined, leased for AED 274,000 in Q4 2014 compared with AED 191,000 at the lowest point of the 2008 2009 2010 2011 2012 2013 2014 market in Q4 2011, as shown in the adjacent bar chart. 4BR Villa Rental Rate % Annual Change

3BR 4BR 5BR % Change Average Villa Rental Rates 2013- 2008- as at Q4 (AED 000’s pa) 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2014 2014

Arabian Ranches 275 140 125 125 155 213 215 335 180 160 160 220 285 300 425 265 250 250 285 365 343 -1 -17 Green Community 310 190 160 170 200 230 220 385 210 190 190 220 235 238 393 240 210 210 240 260 253 -2 -35 Jumeirah Park 195 220 250 290 295 340 15 Jumeirah Village 90 125 155 163 110 150 165 178 145 165 180 210 10 Meadows 325 180 180 180 210 230 238 350 240 200 200 225 250 275 425 265 225 225 265 285 310 8 -25 Mirdif 240 100 80 80 90 138 133 260 120 110 105 115 165 155 275 165 125 125 140 175 175 -3 -40 Palm Jumeirah 375 270 275 275 325 350 355 550 340 315 315 400 495 485 800 450 450 450 500 723 725 0 -9 Springs 250 125 105 105 140 163 195 20 -22

28 © Asteco Property Management, 2015 © Asteco Property Management, 2015 29 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Dubai Dubai Office Market Sales Prices & Rental Rates 2008 to 2014

Leasing

• The office market lagged behind the residential market by a year, with lowest rental rates witnessed % Change Average Office Rental Rates in 2012, and slow growth witnessed thereafter. 2013- 2008- as at Q4 (AED / ft2 pa) 2008 2009 2010 2011 2012 2013 2014 • The fourth quarter of 2014 outperformed the rest of the year with a substantial number of trans- 2014 2014 actions completing for small, medium and large office space. Bur Dubai 360 150 110 90 80 95 105 11 -71 • Demand stemmed from all types of tenants, including new companies setting up and requiring an office for trade license purposes as well as local and international tenants seeking to expand or Business Bay n/a n/a n/a 75 70 100 103 2 consolidate. DIFC 525 370 230 220 225 220 235 7 -55 Dubai Investment Park 205 95 50 40 40 55 65 18 -68 • 2014 rental rates appeared to have reached an equilibrium, encouraging transactional activity and Jumeirah Lake Towers 235 100 60 50 50 90 95 6 -60 as a result, 2015 is likely to continue on this positive trend. Sheikh Zayed Road 425 215 160 140 140 175 180 3 -58 • There appeared to be a lack of single-owned, quality fitted offices in the market due for completion Tecom C 350 105 75 60 55 85 100 18 -71 – with the exception of The One JLT by DMCC and C1 Tower at Dubai World Trade Centre, which are anticipated for handover by the end of 2015.

AVERAGE OFFICE SALES PRICES Sales Q4 2008 TO Q4 2014

26% 4% 5% 16% 18% • Office sales witnessed a strong decline of 65% from 2008 to their lowest point in 2012, with sub- -44% -56% -54% -46% -61% 4250

sequent growth of 35%, on average, from 2012 to 2014 as sales prices increased by 13% over the 2 last year only. 2500

AED per ft 2200 2000 19001900 18001875 • In contrast to the residential sector, transaction levels in the office sector increased by 16% com- 18001700 1250 1225 1200 1075 1100 975 925 975 900 900 850 750 750 825 pared with 2013 with close to 1,500 deals recorded by the Dubai Land Department in 2014, ac- 750 700 650 650 650 550 550 525 550 550 550 cording to Reidin. Business Bay DIFC Dubai Investment Park Jumeirah Lake Towers Tecom C • The most transacted areas were Business Bay, Jumeirah Lake Towers and Tecom C, representing close to 80% of all office transactions in 2014 (90% in 2013) according to Reidin.

2008 2009 2010 2011 2012 2013 2014 % Change 2013-2014 % Change 2008-2014 • In terms of size, most transactions in 2014 were for mid-sized offices measuring from 1,000 to 2,000 square feet, representing approximately 50% of all transactions, whereas small units of less than 1,000 square feet represented 30%.

• Although transaction levels improved, sales price growth remained relatively slow, with a yearly increase of only 9% since Q4 2013, and still 50% lower, on average, than at their peak in 2008.

© Asteco Property Management, 2015 ©© Asteco Asteco Property Property Management, Management, 2015 2015 31 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Dubai Dubai Sales Prices 2008 to 2014

• Following a year of rapid growth in 2013, 2014 was marked by a slowdown in transaction activity • Q4 2014 villa prices were stable in comparison with Q4 2013, however, prices were 30% lower than for all property types. Prices were higher and a string of new regulations by the UAE Central Bank in Q4 2008. Indeed, at that time, the strong levels of demand together with the lack of completed and fees (Dubai Land Department transfer fees) made the process of purchasing property in Dubai villa communities, led to extremely high prices, with Arabian Ranches trading at AED 2,200 per more expensive. square foot, in comparison with AED1,150 per square foot now, on average.

• On average, apartment sale prices in Q4 2014 were 22% lower than in Q4 2008, but still 6% higher • Palm Jumeirah is the only development that has experienced an increase from its Q4 2008 prices, than Q4 2013, despite having declined in the second half of 2014. with rates up by 4%. This increase is due to the firm establishment of the Palm as a unique and exclusive villa community, appealing to both local and international buyers.

AVERAGE APARTMENT SALES PRICES AVERAGE VILLA SALES PRICES Q4 2008 TO Q4 2014 Q4 2008 TO Q4 2014

-6% 0% 7% 6% -3% -2% -37% -31% -29% -14% -8% -19%

2700 2700

2325 2200

2050 -6% 11% 0% 15% 1900 1875 1875 1800 1750 -48% -17% -22% -11% 1700

2 1600 1500 2 1400 1400 1350 1300 1300 1375 1300 1300 1250 1225 1100 1100 1000 1000 1050 1050 AED per ft 885 925 950 2200 900 825 825 775 AED per ft 750 700 1500 550 1225 1250 1500 1175 1175 500 1150 1125 1100 975 850 950 850 900 800 850 450 450 750 750 750 750 725 650 550 600 500 475 550

Business Bay DIFC Discovery Gardens Downtown Dubai Dubai Marina Greens Arabian Ranches Dubai Sports City Jumeirah Park Jumeirah Village

5% 7% 4% 6% 0% -32% -19% -11% -16% -29% 2800

2000 2000 2000 4% -5% -2% -38% 4% -40% 1625 1525 1500 3000 1400 1400 1200 1250 2850

2 1175 2750 1050 1100 1000 1100 1100 925 925 850 875 925 2200 710 750 675 700 1800 1800 1800 650 1550 600 1300 1350 1500 1000 AED per ft2 AED per ft 1000 1100 500 500 500 850 850 850 900 1075 425 475 325 350 650 650

International City JBR JLT Jumeirah Palm Jumeirah Meadows Palm Jumeirah Springs Village

2008 2009 2010 2011 2012 2013 2014 % Change 2013-2014 % Change 2008-2014 2008 2009 2010 2011 2012 2013 2014 % Change 2013-2014 % Change 2008-2014

32 33 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Dubai Dubai Area & Rent Affordability Map

The following map highlights some of Dubai’s most popular residential areas, in terms of their affordability for rent or sale.

Most Expensive Expensive Mid Priced Affordable

1 Al Barari Arabian Gulf 2 Al Furjan 3 Al Nahda 4 5 Al Warqaa 6 Arabian Ranches 7 Barsha 8 Bur Dubai 9 Business Bay 35 10 Culture Village 40 11 Deira 12 DIFC 13 Discovery Gardens 14 Downtown Dubai 28 15 Downtown Jebel Ali 27 51 8 16 Dubai Creek 19 11 11 17 Dubai Hills 33 44 18 Dubai Investment Park 48 12 43 47 19 Dubai Marina 11 7 11 20 Dubai Silicon Oasis 49 14 9 3 21 Dubai Sports City 31 30 13 23 22 Dubailand 44 11 23 15 45 2 24 Green Community 10 4 25 IMPZ 36 44 26 International City 27 JBR 311 32 39 17 28 Jumeirah 25 29 Jumeirah Golf Estates 24 30 44 311 16 31 Jumeirah Park 29 32 Jumeirah Village 53 33 Jumierah Lakes Towers To Abu Dhabi 21 To Sharjah 34 Living Legends 38 35 Maritime City 34 46 311 36 Meydan 52 37 Mirdif 6 1 38 MotorCity 311 37 39 5 40 Palm Jumeirah 41 22 41 Remraam 42 611 26 42 Residential City 43 Rigga 20 44 Sheikh Zayed Road 50 45 Springs / Meadows 46 Studio City 47 Tecom C 48 The Greens 611 49 The Lakes 50 The Villa 51 Umm Suqeim 611 52 Uptown Mirdiff 53 Victory Heights 611

34 © Asteco Property Management, 2015 © Asteco Property Management, 2015 35 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Northern Emirates

Sales Leasing KEY TRENDS • Ras Al Khaimah remained a good value for money • Demand for leasing reduced over the last three quar- option and offered a better established freehold mar- ters of the year, which led to increased vacancy levels Northern ket with a selection of quality properties available at but this had not translated into a reduction of rental reasonable prices and regulatory transparency on rates at year end. property ownership compared with the other North- ern Emirates. • Tenants relocated, within Sharjah, to cheaper accom- Emirates modation due to some landlords unwilling to negoti- • The Sharjah Government opened the property sales ate rental rates. market by introducing the Tilal City project to expa- triates of all nationalities. Foreign investors can now 2014 Highlights purchase properties in Sharjah on a 100-year lease- hold basis. Historically, purchasing property in the emirate was only available to GCC Nationals or Arab expatriates on a case by case basis.

TRANSACTION • Sales activity in Sharjah was limited due to unclear • Demand for apartments to lease in Sharjah was high ACTIVITY ownership regulations. during the first quarter of 2014, due to high rental rates in neighbouring Dubai. However, from Q3 on- • Ajman sales were relatively slow, whereas Ras Al wards a noticeable slowdown in transactional activity Khaimah witnessed strong levels of demand. was witnessed, especially in Sharjah and Ajman.

• Ras Al Khaimah’s transactional activity was stable • The real estate market in the Northern Emirates has tradition- throughout the year. ally been characterised by a strong interdependence with • Umm Al Quwain and Fujairah’s leasing activity was the Dubai market because of the overflow demand driving relatively slow as these markets rely mostly on local rental rates up specifically in Sharjah and Ajman. population rather than commuters.

POPULAR • Master-planned communities such as Al Hamra, Mina • Areas such as Corniche, Al Nahda, Majaz, and Abu • The interdependence was apparent during the first quarter of DEVELOPMENTS Al Arab, and Marjan Islands, all in Ras Al Khaimah, are Shagara in Sharjah have always been popular resi- 2014; with a general stabillisation and slowdown witnessed / AREAS the most popular freehold developments offering dential areas. These areas enjoy high occupancy lev- beach front or golf course fronting properties. Villas els and when units become available they are rented in Dubai, the number of newcomers arriving in Sharjah was in particular have been very popular. out almost immediately. reduced, which saw rental rates in 2014’s last three quarters • Several stalled projects in the Northern Emirates re- • Master-planned developments such as Al Hamra Vil- stabilise. started in 2014 such as Bermuda Villas, Ajman Pearl lage, Bab Al Bahr and Mina Al Arab in Ras Al Khaimah and Al Zorah. were in demand and had healthy occupancy levels.

OFFICES Not applicable • Demand levels for office space in Sharjah had been relatively stagnant as rental rates remained broadly stable throughout 2014 with marginal increases in rates during the year. Annual Rental Growth in 2014

-5% +14% +19% +11%

Sharjah Sharjah Ajman Ras Al Khaimah Typical Good Quality Typical Good Quality

Annual Office Rental in 2014

Sharjah Good quality apartment rental rates +2% increased by 14% Sharjah Offices

APARTMENT +14% RENTAL GROWTH throughout 2014.

36 36 © Asteco Property Management, 2015 © Asteco Property Management, 2015 37 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Northern Emirates

Sales Leasing APARTMENTS • Sales demand is expected to grow with the introduc- • Apartment and villa rates and transactional activity tion of a property ownership law by Sharjah Govern- are expected to decline due to a reduction in the Northern Emirates ment, which allows expatriates from any country to number of tenant migrations from Dubai as mid purchase property on the Tilal City project on a 100- market rental rates in Dubai are expected to decline. year leasehold basis, providing they hold a UAE resi- This is likely to affect Sharjah and Ajman in particular, dence visa. whereas the lesser interdependent emirates such as 2015 Outlook Ras Al Khaimah, Umm Al Quwain and Fujairah are like- ly to see some stability.

VILLAS • The master-planned communities in Ras Al Khaimah • Demand for villa leasing in Ras Al Khaimah is expected such as Al Hamra Village, Bab Al Bahr, and Mina al to remain strong as the offering is attractive both in Arab are expected to see stable levels of demand terms of price and quality. • Sharjah is likely to see a reduction in the number of reloca- from both sales and leasing as the communities be- tions from Dubai and as a result, an increase in vacancy rates come more established resulting in marginal rate in- and a decline in rental rates is to be expected. creases.

OFFICES • Demand levels for office space in Sharjah have been • Fujairah, Ras Al Khaimah and Umm Al Quwain on the other relatively stagnant over the last few years with limited hand are expected to remain relatively stable in terms of new entrants to the city. As a result, rental rates re- mained relatively flat, which is expected to continue rental rates. in 2015.

38 38 © Asteco Property Management, 2015 © Asteco Property Management, 2015 39 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Northern Emirates Northern Emirates

Rental Rates AVERAGE SHARJAH OFFICE RENTAL RATES 2008 to 2014 Q4 2008 TO Q4 2014 0% 8% 5% 5% 0% 0% 0% 0% -63% -55% -48% -32% -61% -55% -60% -50% 150 130 • In Q4 2014, apartment rental rates in Sharjah and Ajman were on average 16% and 17% lower, 110

respectively, from their peak rates achieved in 2008. 100 100 100 100 100 pa 2

• For instance, a one-bedroom apartment in Sharjah’s Al Khan area in 2008 could be leased for AED 70 70 68 63 60 60 53 55 55 53

45,000 per annum, reducing to AED 28,000 per annum at the market’s lowest point in 2012, and 45 50 50 50 50 50 50 50 50 50 50 50 53 AED per ft 48 48 48 50 48 48 45 45 45 45 45 48 43 45 45 45 45 50 45 43 45 45 45

subsequently increasing back to AED 42,000 per annum by Q4 2014. 40 40

• On the other hand, average apartment rental rates in Fujairah and Umm Al Quwain declined by 24% and 34% respectively since 2008. Al Tawuun Road Corniche Area Al Wahda Str. MIna Road Al Qassemeh Clock R/A Al Yarmook Industrial Area • Office leasing rates in Sharjah witnessed the biggest decline of 55% since its peak rates in 2008. The rates have remained relatively stable since 2011 with only marginal fluctuations. Of all areas 2008 2009 2010 2011 2012 2013 2014 % Change 2013-2014 % Change 2008-2014 in Sharjah, the Corniche is the most sought after office location, witnessing only moderate levels of demand.

1BR 2BR 3BR % Change Average Apartment Rental Rates 2013- 2008- as at Q4 (AED 000’s pa) 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2014 2014

Ajman 42 30 26 24.5 22 26.5 32.5 26 47 33 28 27 35 41 66 49 40 40 38 45 55 19 -17 Fujairah 39 24 22.5 22.5 23 30 27.5 30 49 30 29 30 37.5 40 58.5 45 40 41.5 40 47 47 0 -24 Sharjah Typical 44 32 24 23 23 30 35 33 63 41 32 30 46.5 41.5 76 51 42 40 44 67 59 -5 -27 Sharjah New 44 32 24 23 25 34.5 44 36 63 41 32 30 51 57.5 76 51 42 40 48 70 73 14 -5 RAK Typical 42.5 29.5 25.5 22.5 22 29 32.5 28 55 35 32 31 37.5 39 65 49 42.5 40 38 47 50 9 -25 RAK New 33 45 45 31 60 62.5 80 93 110 11 na Umm Al Quwain 37 21 19.5 19.5 20 19.5 21.5 27 48 30 28 28 27 28.5 52.5 40 37.5 37.5 38 38 40 7 -34

1BR 2BR 3BR % Change Average Sharjah Apartment Rental Rates 2013- 2008- as at Q4 (AED 000’s pa) 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2014 2014

Al Majaz 45 35 28 23 23 32 40 65 43 33 31 32 45 53 75 58 47 38 45 68 75 16 -9 Al Qasimiah 40 29 23 23 23 34 38 60 41 30 29 31 43 45 70 57 47 42 40 55 58 7 -17 Al Nahda 45 35 29 28 27 36 41 64 41 33 30 32 48 55 80 58 47 45 46 60 75 19 -10 Al Khan () 45 35 29 29 28 34 42 65 41 35 33 33 44 53 80 58 47 45 43 63 78 23 -10 Abu Shagara 40 29 24 22 20 31 34 62 41 32 27 25 34 42 70 49 40 34 32 50 53 12 -26 Al Yarmook 37 29 24 23 20 23 23 52 34 30 29 24 28 28 65 44 38 36 33 48 48 0 -37 Al Wahda 40 29 23 23 23 34 39 61 41 31 29 31 45 50 70 48 40 38 42 63 68 11 -8 Corniche 48 35 30 28 26 37 48 63 45 40 40 41 60 65 75 58 50 54 55 73 80 14 3 Mina Road 40 29 23 23 20 29 34 62 40 32 31 25 38 39 75 55 50 50 39 48 53 10 -29

40 © Asteco Property Management, 2015 © Asteco Property Management, 2015 41 11

Arabian Gulf UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Northern Emirates Northern Emirates 5/ 11 SHARJAH RAS AL 6/ KHAIMAH 1 Abu Shagara Area Map 2 Al Khan UMM AL 5 3 Al Majaz QUWAIN 10 4 Al Nahda 7/ 4/ 5 Al Qasimiyah 6 Al Taawun AJMAN FUJAIRAH 3/ 8 7 Al Wahda 1 9 8 Corniche / Buhaira SHARJAH 9 Khaledia 10 King Faisal & King Abdul Aziz Streets

2/

DUBAI 7 311 3

2

6

4

1/ ABU DHABI 11

RAS AL KHAIMAH

Mina Al Arab

1 1 Mina Al Arab 2 Marjan Island 3 Al Hamra

Al Hamra

Marjan Island

2 3

42 © Asteco Property Management, 2015 © Asteco Property Management, 2015 43 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Al Ain

2014 Highlights 2015 Outlook KEY TRENDS • Rental rates in Al Ain’s residential market increased • Al Ain’s residential market is expected to witness fur- by an average of 16% for villas and more than 4% for ther rental increases during the first half of 2015, and Al Ain 2014 apartments. stabilisation during the second half of the year. • Retail rental rates remained stable in the last three • The retail market is expected to remain stable years, with an average rate of AED 2,225 per sqm per throughout 2015. Highlights annum for major malls in Al Ain. TRANSACTION • Rental transaction activity was relatively high in 2014 • Transaction activity is expected to increase for resi- & Outlook ACTIVITY especially in the residential sector. dential and office sectors. • The highest transaction activity recorded was in mid 2014.

POPULAR • The most popular areas in Al Ain are Al Jimi and Al • Asharej, will be one of the most sought after areas, DEVELOPMENTS Manaseer for residential, and Town Centre for offices. as new quality residential supply will be handed over / AREAS by mid 2015.

• The Town Centre will remain the business centre of Al Ain.

OFFICES • The office market remained stable across all loca- • Asteco expects a slight increase in rental rates for • Al Ain’s residential market recorded some growth during tions, with the exception of lower quality space, where quality office space, especially for the Town Centre 2014, with over 16% rental increase for the villa market and rental rates declined marginally. and its surrounding area. circa 4% for apartments.

• The office market remained stable across all locations, with the exception of lower quality space where rental rates de- clined marginally.

• In the last three years, the retail sector remained stable and the highest recorded rental rates were predominantly retail shops in the major malls.

Annual Growth in 2014

Rents: +8% +16% 0%

Apartments Villas Offices

44 44 © Asteco Property Management, 2015 © Asteco Property Management, 2015 45 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014 Al Ain Al Ain AVERAGE OFFICE RENTAL RATES Rental Rates Q4 2008 TO Q4 2014 0% 0% 0% 0% 0% -11% -11% -38%

1150 1125 1150 1100 1050 1075 1100 pa

2 1000 975 950 950 950 975 2008 to 2014 850 850 850 925 850 850 850 900 900 850 800 800

550

AED per ft 500 500

• The Al Ain residential apartment market followed a similar trend to the one witnessed in Abu Dha- bi, with rental rates declining till 2012 and never fully recovering to 2008 levels. Khalifa Street Aud Al Touba Street Main Street Senaya Street

• In comparison, villa rents however recovered beyond 2008 levels, with 18% increases witnessed 2008 2009 2010 2011 2012 2013 2014 % Change 2013-2014 % Change 2008-2014 within older units whereas new units are only 7% lower than in Q4 2008.

AVERAGE RETAIL RENTAL RATES 1BR % Change Q4 2008 TO Q4 2014 Average Apartments Rental Rates 2013- 2008- as at Q4 (AED 000’s pa) 2008 2009 2010 2011 2012 2013 2014 2014 2014 87% 70% 50% 78% 0% 0% 0% 0% Mature Units 2250 2250 2225 2225 2225

1BR 50 35 25 23 23 29 33 14 -34 1825 1825 1825 1825 1825 1825 1700 1650 1700 1650 1500 1500 1500 1500 1550 pa 1350 1350 1300 2BR 70 55 45 43 35 39 43 10 -39 2 1250 1075 1200 975 1000 3BR 90 75 60 53 48 51 53 4 -41

New Units AED per ft

1BR 60 50 38 28 28 32 38 19 -37 Khalifa Street Main Street Senaya Street Major Malls 2BR 75 65 58 45 45 45 48 7 -36 2008 2009 2010 2011 2012 2013 2014 % Change 2008-2014 % Change 2013-2014 3BR 95 85 73 55 58 63 65 3 -32

1BR 2BR 3BR % Change Average Villas Rental Rates 2013- 2008- as at Q4 (AED 000’s pa) 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2014 2014

Mature Units Town Centre 70 60 60 55 50 65 85 95 80 75 70 65 75 95 95 90 90 85 85 105 125 24 17 Others * 70 60 60 55 50 65 85 85 75 75 70 65 75 95 95 90 90 85 85 105 130 27 24 Zaker 65 55 55 50 45 65 75 75 70 70 65 60 75 75 85 75 85 80 80 105 105 4 13 Al Towaya 75 65 65 60 50 70 80 85 80 80 80 65 85 95 100 95 95 95 85 110 125 13 15 Al Jimi 70 60 60 55 50 65 85 85 75 75 70 65 75 95 95 90 90 85 85 105 125 24 22 New Units Town Centre 115 95 80 65 65 75 90 125 115 100 90 85 100 110 140 135 125 110 105 130 155 16 -7 Others * 115 95 80 65 65 75 80 120 115 100 90 85 100 115 140 135 125 110 105 130 160 16 -5 Zaker 105 85 65 55 50 75 80 115 95 90 85 75 100 100 135 100 115 105 90 130 130 2 -13 Al Towaya 110 105 85 70 65 80 95 130 125 105 100 85 105 110 140 135 130 120 105 135 160 14 -4 Al Jimi 120 95 80 65 65 75 90 120 115 100 90 85 100 110 140 135 125 110 105 130 155 16 -7

* Includes , Al Muwaiji, Al Manasir , Al Masoudi Areas and prime compounds

46 © Asteco Property Management, 2015 © Asteco Property Management, 2015 47 UAE ANNUAL REPORT 2014 UAE ANNUAL REPORT 2014

Al Ain Area Map

48 © Asteco Property Management, 2015 © Asteco Property Management, 2015 49 UAE ANNUAL REPORT 2014

The Middle East’s largest full service real estate consultancy company, Asteco was John Stevens, BSc MRICS formed in Dubai in 1985. Over the years, Asteco has gained enormous respect Managing Director/Director, Asset Services for consistently delivering high quality, professional, value-added services in a +971 600 54 7773 transparent manner. It is also widely recognised for its involvement with many of the projects that have defined the landscape and physical infrastructure of the [email protected] Emirates. John Allen, BSc MRICS Asteco has an essential combination of local knowledge and international expertise. A deeply established brand, renowned for its application of the latest Director, Valuation & Advisory technological advances, its commitment to transparency, winning strategies and +971 600 54 7773 human expertise. Undisputed real estate experts, Asteco represents a significant [email protected] number of the region’s top property owners, developers and investors. Jeremy Oates, BSc FRICS General Manager, Abu Dhabi VALUATION & ADVISORY +971 2 626 2660 Our professional advisory services are conducted by suitably qualified personnel [email protected] all of whom have had extensive real estate experience within the Middle East and internationally. Sean McCauley, MBA BCom Our valuations are carried out in accordance with the Royal Institution of Director - Agency Services Chartered Surveyors (RICS) and International Valuation Standards (IVS) and are +971 600 54 7773 undertaken by appropriately qualified valuers with extensive local experience. [email protected] The Professional Services Asteco conducts throughout the region include: Julia Knibbs, MSc • Consultancy and Advisory Services Research & Consultancy Manager, UAE • Market Research +971 600 54 7773 • Valuation Services [email protected]

SALES Ghada Amhaz, MBA Asteco has established a large regional property sales division with Research & Consultancy Manager, Abu Dhabi representatives based in the UAE, Qatar and Jordan. Our sales teams have +971 2 626 2660 extensive experience in the negotiation and sale of a variety of assets. [email protected]

James Joughin, BSc (Hons) MRICS LEASING Head of Valuations, Abu Dhabi Asteco has been instrumental in the leasing of many high-profile developments +971 2 626 2660 across the GCC. [email protected]

ASSET MANAGEMENT Tamer Ibrahim Chaaban Branch Manager, Al Ain Asteco provides comprehensive asset management services to all property owners, whether a single unit (IPM) or a regional mixed use portfolio. Our focus is +971 3 7666097 on maximising value for our Clients. [email protected]

Zahra Alvi, MSc OWNERS ASSOCIATION Research Analyst Asteco has the experience, systems, procedures and manuals in place to provide +971 600 54 7773 streamlined comprehensive Association Management and Consultancy Services [email protected] to residential, commercial and mixed use communities throughout the GCC Region.

SALES MANAGEMENT Our Sales Management services are comprehensive and encompass everything required for the successful completion and handover of units to individual unit owners.

50 © Asteco Property Management, 2015 ©© Asteco Asteco Property Property Management, Management, 2015 2015 5151 Xxx

UAE Property Review

Special Edition:

Historic Review 2008-2014 and 2015 Outlook

DISCLAIMER: The information contained in this report has been obtained from and is based upon sources that Asteco Property Management believes to be reliable, however, no warranty or representation, expressed or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. Asteco Property Management will not be held responsible for any third-party contributions. All opinions and estimates included in this report constitute Asteco Property Management’s judgment, as of the date of this report and are subject to change without notice. Figures contained in this report are derived from a basket of locations highlighted in this report and therefore represent a snapshot of the Dubai market. Due care and attention has been used in the preparation of forecast information. However, actual results may vary from forecasts and any variation may be materially positive or negative. Forecasts, by their very nature, involve risk and uncertainty because they relate to future events and circumstances which are beyond Asteco Property Management’s control. For a full in-depth study of the market, please contact Asteco Property Management’s research team. Asteco Property Management LLC. Commercial Licence No. 218551. Paid-up Capital AED4,000,000.

© Asteco Property Management, 2015