REVIEW

VISION

Abu Dhabi

www.valustrat.com ValuStrat Price Index – VPI Residential Base: Q1 2016=100 All prices are quoted in UAE Dirhams unless otherwise stated Sales and Rent performance are measured on a quarterly basis while hotel performance are on yearly basis

Q12019 REVIEW • The VPI – Residential first quarter 2019 stood at 75.1 points, this is compared with 100 points from the 2016 base Economy • Abu Dhabi’s declining residential capital values were 18.7% lower than the same period in 2017, 12.2% lower than last year and 3.2% • Moody’s confirmed long term issuer rating of Abu Dhabi at Aa2 below the previous quarter • Fitch Ratings awarded highest credit rating to Abu Dhabi National • The weighted average residential value this quarter was AED 10,150 Oil Company per sq m (AED 943 per sq ft), apartments stood at AED 11,259 per sq m (AED 1,046 per sq ft), and villas at AED 7,513 per sq m (AED • Oil prices averaged USD 60.5 per barrel, declined 6% annually 698 per sq ft)

• The residential rental VPI stood at 77.2 points, declining 22.8% VPI Residential VPI Residential since 2016, softening 2.1% quarterly and 6.9% annually Capital Values Rental Values • Abu Dhabi’s gross yields averaged 7.1%, with apartments at 7.4% 75.1 77.2 and villas at 6.5% Sales -3.2% -2.1% • Al Murjan Tower sold for AED 289 million Q1 Y-o-Y Q1 Y-o-Y

Residential • Aldar sets up a comprehensive property management arm – Provis • Aldar unveiled AED 2 billion Alreeman project Hotel • New residential tower with 525 units released at Pixel in Makers District • Interfaith visit and 17th edition of Asian Football Cup positively affected hotel performance • Hilton Abu Dhabi hotel rebranded as Radisson Blu Abu Dhabi Corniche Office Asking Office Asking • Al Watha Desert Resort was opened Sales Price Rents 10,290 904 Office AED/sq m p.a. AED/sq m p.a. • Notable expected completions included Eclipse Twin Towers with 51,590 sq m (555,294 sq ft) GLA, Reem Tower 1 with 27,650 sq m (297,614 sq ft) GLA and Al Mansouri Commercial Tower having -10.5% -1.9% 14,364 sq m (154,608 sq ft) GLA Q-o-Q Q-o-Q Industrial • launched Tech Park depicted for start-ups • Abu Dhabi (KIZAD) launched Polymers Park • DHL announced plans to build a distribution centre in KIZAD

Retail • Eithad Plaza with approx. 1,000 sq m (10,764 sq ft) GLA of retail space acquired by Aldar Hotel Average Hotel Infrastructure Daily Rate Occupancy • Under construction mall GLA is estimated at 978,334 sq m (10.5 • Internal road and infrastructure project at Al Shawamekh reached million sq ft) as of Q1 416 81% 74% completion as per Musanada AED

16.0% 0.5% Q1 Y-o-Y Q1 Y-o-Y

Tourism Legal • Qasr Al Watan in the Presidential Palace compound was opened • Two new laws enacted and issued by HH Sheikh Khalifa Bin Zayed Al Nahyan in relation to Abu Dhabi Investment Office and PPPs • Special Olympics Garden was inaugurated • Abu Dhabi Department of Culture and Tourism (DTCAD) reduced tourism fees to 5.5% to help boost the sector • unveiled a rare Rembrandt masterpiece, Head of a Young Man in Prayer (circa 1655)

Projects • AED 535 million Hub71 project in Abu Dhabi Global Market Square announced

Q22019 REVIEW • The VPI – Residential second quarter 2019 stood at 72.7 points, this is compared with 100 points from the 2016 base Tourism • Abu Dhabi’s declining residential capital values were 19.5% lower than the same period in 2017, 13.3% lower than last year and 3.3% • DTCAD signed a five-year agreement to host UFC fights below the previous quarter • Oldest Christian site in the UAE opened for tourist by DTCAD • The weighted average residential value this quarter was AED 9,795 per sq m (AED 910 per sq ft), apartments stood at AED 10,861 per • Louvre Abu Dhabi launched highway gallery along E11 sq m (AED 1,009 per sq ft), and villas at AED 7,244 per sq m (AED 673 per sq ft) • About 200,000 visited The Founder’s Memorial after its first year of opening • The residential rental VPI stood at 75.6 points, declining 24.4% VPI Residential VPI Residential • Al Qana waterfront destination unveiled and will include largest since 2016, softening 2% quarterly and 7.9% annually. Abu Dhabi’s Capital Values Rental Values gross yields averaged 7.3%, for apartments at 7.5% and villas with aquarium in the Middle East 6.7% 72.7 75.6

-3.3% -2.0% Q2 Y-o-Y Q2 Y-o-Y

Industrial Economy • KIZAD announced to receive AED 36.7 billion investment • S&P gave AA credit rating for Abu Dhabi • ICAD Business Park and ICAD Gate projects to be built at Industrial • Abu Dhabi government announced nine new initiatives to help boost City Abu Dhabi 3 (ICAD 3) economic performance • Oil prices averaged USD 65.1 per barrel, declined 9% annually

Office Asking Office Asking Sales Price Rents Infrastructure 11,055 904 • Abu Dhabi General Service Company (Musanada) opened a new Cityscape AED/sq m p.a. AED/sq m p.a. bridge, B17 ICAD Bridge along Shaikh Khalifa Bin Zayed International Highway • Aldar launched Lea at and Alreeman 2 • Sheikh Zayed Bin Sultan Road (Eastern Mangroves Road) Traffic • Official data revealed 14,000 attendees, as per post show report 7.5% -1.9% Improvements Project started construction, as per Musanada Q-o-Q Q-o-Q • Top visiting nationalities were locals, Indians, Egyptians, Jordanians • Al Zahiya area road project finished construction and British citizens • Al Maqtara – Hamim road traffic safety improvement project completed, according to Musanada

Hotel • Al Sherifi Hotel and Al Ameri Hotel Airport Road expected to finish costruction Residential Hotel Average Hotel • With increased tourist attractions and event offerings in the city, Daily Rate Occupancy • Leonardo Residence Masdar City, Al Qudra Danet Abu Dhabi and tourists Average Length of Stay (ALOS) in hotels went up 2.8% YoY West YAs Villas were completed 323 67% AED

3.5% -1.6% Q2 Y-o-Y Q2 Y-o-Y

Retail Mergers and Acquisitions • Three-way merger of ADCB, UNB and Al Hilal Bank • First City Centre shopping centre in the UAE capital opened, My City Centre Masdar • Al Maryah Central renamed to The Galleria and will serve as extension to The Galleria • Apparel Group entered into a lease agreement with Aldar malls to occupy 9,290 sq m (100,000 sq ft) GLA of shopping space in three malls Transportation • Careem acquired bike-sharing company Cyacle

Legal • Abu Dhabi announced freehold ownership law in investment areas in the capital Launches • A law was issued to form Abu Dhabi Digital Authority • Jubail Island development officially launched. Estimate to have up to 6,000 residents once completed

Q32019 REVIEW • The third quarter VPI - Residential Capital Values declined 2.4% quarterly to 70.9 points, registering a slower rate of decline than the past 4 quarters Tourism • Abu Dhabi capital values were 12.6% lower than the third quarter • Department of Culture and Tourism Abu Dhabi announced AED 600 last year, 29.1% lower than Q1 2016, the base of the VPI million budget to help boost entertainment and events sector • The weighted average residential value this quarter was AED 9,505 • A new landmark development in will be built as part per sq m (AED 883 per sq ft), apartments stood at AED 10,044 per of the UAE’s vision of tolerance and hospitality called The sq m (AED 977 per sq ft), and villas at AED 7,083 per sq m (AED 658 Abrahamic Family House which will be a place of worship for per sq ft) Christians, Jews and Muslims • The residential rental VPI declined 2.4% quarterly and 9.2% • Abu Dhabi was included in the list of most cultural cities, as per VPI Residential VPI Residential Skyscanner annually to 73.8 points. Abu Dhabi’s gross yields averaged 7.4%, Capital Values Rental Values with apartments at 7.7% and villas at 6.6% • DCTAD announced partnership with Miral to enhance Yas Island 70.9 73.8 offerings

-2.4% -2.4% Q3 Y-o-Y Q3 Y-o-Y Economy • UAE Central Bank lowered interest rates by a quarter point, Retail mirroring US Federal Reserve move • The Galleria Al Maryah Island expansion was opened boasting an • OPEC+ meeting held in the city discussed possible oil production estimated 23,226 sq m (250,000 sq ft) GLA, with 250 shops, 70 dining cut as crude hovered in the low USD 60 per barrel options and 21-screen cinema complex • A total of 16 MoUs were signed at the UAE-China Economic forum • Mall launched its new Zeal Entertainment Centre with 3,252 sq m (35,000 sq ft) GLA • Oil prices averaged USD 59.7 per barrel, declined 18% annually • Construction contract for North Riyadh City's (formerly known as Wathba North/South Samkha) Retail Strip Mall has been awarded by Modon Properties Office Asking Office Asking Sales Price Rents 10,620 836 AED/sq m p.a. AED/sq m p.a. Residential • An estimated total of 1,000 villas and 733 apartments were -3.9% 2.8% Industrial completed Q-o-Q Q-o-Q • The China – UAE Industrial Capacity Cooperation Demonstration • Aldar launched 306 villa plots at Saadiyat Reserve Project has so far attracted 20 Chinese companies pumping investments worth AED 6.2 billion in Khalifa Industrial Zone Abu Dhabi (KIZAD) • KIZAD lowered its fees and charges for more than three-fourths of its services

Office • WeWork announced to open its first UAE co-working facility at Abu Dhabi’s Hub71 Hotel Average Hotel Daily Rate Occupancy Transportation • Aldar inaugurated new Provis and Khidmah headquarters 279 70% AED • Registration for road toll started with roll-out to officially begin in 1st January 2020

-1.0% 4.1% Q3 Y-o-Y Q3 Y-o-Y

Hotel • Andaz Capital made it into the list of best hotels in the Middle East, Mergers and Acquisitions as per Conde Nast Traveller • Abu Dhabi Financial Group (ADFG) and Shuaa Capital merger sealed

Infrastructure • Abu Dhabi Municipality announced Corniche Road revamp was Government started • First Emirati astronaut Hazzaa Ali Almansoori sent to International • Musanada declared Al Rahba road project completion Space Station

Q42019 REVIEW • The fourth quarter VPI - Residential Capital Values declined 2.6% quarterly to 69.1 points Transportation • Abu Dhabi capital values were 11.0% lower than the fourth quarter last year, 30.9% lower than Q1 2016, the base of the VPI • Etihad and Air Arabia partnership to launch the city’s first budget carrier • The weighted average residential value this quarter was AED 9,246 per sq m (AED 859 per sq ft), apartments stood at AED 10,236 per • Department of Transport announced an online carpooling system sq m (AED 951 per sq ft), and villas at AED 6,910 per sq m (AED 642 per sq ft) • The residential rental VPI declined 2.8% quarterly and 9% annually to 71.7 points VPI Residential VPI Residential Capital Values Rental Values 69.1 71.7 Hotel • W Hotel Abu Dhabi Yas Island officially inaugurated -2.6% -2.8% • Hotels in close proximity to Abu Dhabi Grand Prix enjoyed healthy Economy Q4 Y-o-Y Q4 Y-o-Y performance indicators • Fitch Ratings affirmed AA rating and gave a stable outlook for Abu • Miral announced to build world’s first Warner Bros branded hotel in Dhabi on foot of its strong fiscal and external metrics as well as Yas Island by 2021 high GDP per capita • Abu Dhabi issued USD 10 billion multi-tranche bonds • US Federal Reserve reduced interest rates by a quarter of a percent, the UAE Central Bank followed suit • Oil prices averaged USD 58.8 per barrel, declined 9% annually Industrial • Etihad opened its first 3D manufacturing factory Office Asking Office Asking Sales Price Rents • Abu Dhabi Ports broke ground on Marsa Mina project 10,889 827 AED/sq m p.a. AED/sq m p.a. Residential • Provis secured 12 property management and leasing services for 12 residential projects from Aldar 2.5% -1.1% Q-o-Q Q-o-Q • Saidah Development announced 400 units residential project in Yas Bay Legal • The UAE Central Bank mulls amendment of policies regulating real • Aldar launched rent to own system for selected projects estate financing • AED 2.3 billion housing project in Al Dhanah assigned to Modon • Early settlement fee for mortgages set to maximum 1% or AED Properties 10,000, whichever is lower • UAE Central Bank issued a new law to help regulate insolvency cases

Hotel Average Hotel Projects Daily Rate Occupancy 420 81% • Aldar launched AED 8 billion mega project Saadiyat Grove at AED Cultural District Saadiyat Island Tourism • CLYMB Abu Dhabi project was opened boasting the world’s tallest 0.0% 1.0% indoor climbing wall and widest indoor flight chamber Q4 Y-o-Y Q4 Y-o-Y • DTCAD discovered world’s oldest natural pearl dating back between 5,800 to 5,600 BC • World Travel Awards chosen Abu Dhabi as the World’s Leading Sports Tourism Destination Oil and Gas • Abu Dhabi announced discovery of new gas reserves which could increase its rank to 6th place in both global oil and gas reserves

Hotel Economy • Upcoming hotels: Fairmont Marina Abu Dhabi • Institute of International Finance (IFF) estimates Abu Dhabi’s real GDP growth rate in 2020 at 2% • The UAE ‘s oil GDP growth forecast at 1.4%, as per IMF

Retail • New malls: Forsan Central Mall , Cinemacity CityMAX Al Qana, Reem Mall Outlook • IMF forecast UAE’s overall GDP could accelerate by 2.5% in 2020 on foot of Expo 2020 and recent fiscal stimulus • A more positive market sentiment is expected due to direct and indirect drivers impacting tourism, business and the overall economy as Expo 2020 kicks off in Dubai during the fourth quarter • Capital values and rents soften at a slower rate and possibly Tourism stabilise by the end of the year due to limited number of new projects handing over. Increasingly affordable rents, particularly for • Upcoming attractions: Al Qana Aquarium townhouses and small villas • Spill-over tourists from EXPO 2020 could help boost performance • Rentals and capital values for prime office space to remain stable. Secondary locations to soften further • Strong hospitality performance, particularly the fourth quarter as Expo 2020 commences in neighbouring Dubai

Infrastructure • Abu Dhabi roads toll system to officially start • Couple of phases for infra projects to finish construction VPI ValuStrat Price Index