Valustrat Abu Dhabi Real Estate Review Q4 2019

Real Estate Market 4th Quarter | 2019 Review VPI Residential VPI Residential Real Capital Values Rental Values Estate 69.1 71.5 Performance (Base Q1 2016=100) (Base Q1 2016=100) -11.0% -9.3% Y-o-Y Y-o-Y Market Intelligence. VPI Simplified. ValuStrat Price Index Source: ValuStrat Key Indicators Source: ValuStrat, REIDIN, DCTAD Apartment Asking Villa Asking Apartment Villa Sales Price Sales Price Asking Rents Asking Rents 13,005 9,943 112,500 187,734 AED/sq m AED/sq m 2 Bedrooms (AED p.a.) 4 Bedrooms (AED p.a.) -1.6% -3.4% -2.8% -3.6% Q-o-Q Q-o-Q Q-o-Q Q-o-Q Hotel Average Hotel Office Asking Office Asking Room Rate Occupancy Sales Price Rents 343 73% 10,889 827 (AED) Jan-Sep Jan-Sep AED/sq m AED/sq m p.a. 10.9% 1.1% 2.5% -1.1% Y-o-Y Y-o-Y Q-o-Q Q-o-Q Increase Stable Decline 1 | Abu Dhabi Real Estate Market 4th Quarter 2019 Review VPI ValuStrat Price Index Residential The valuation based ValuStrat Price VPI - Abu Dhabi Residential Capital Values Index (VPI) for capital values in Abu 5 Villa and 5 Apartment Locations Dhabi’s residential investment zones [Base: Q1 2016=100] for the fourth quarter 2019, declined 2.6% quarterly to 69.1 points. Annually, capital values were 11% 120 100.0 lower than the fourth quarter 2018. 96.4 95.4 94.1 100 92.4 90.3 88.5 87.1 85.5 83.8 81.1 The weighted average residential 77.6 80 75.1 72.7 value this quarter was AED 9,246 per 70.9 69.1 sq m (AED 859 per sq ft), apartments stood at AED 10,236 per sq m (AED 60 951 per sq ft), and villas at AED 6,910 per sq m (AED 642 per sq ft). 40 Ready properties in Al Reem Island, 20 Al Muneera, Al Reef and Hydra Village saw double digit declines in capital 0 values since Q4 2018. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 2018 2019 Locations that were more resistant to Source: ValuStrat downward pressure, with capital values declining annually in single digit percentages, were apartments in Saadiyat Island, and Al Bandar, as well as villas in Mohamed Bin Zayed VPI - Abu Dhabi Residential Rental Values City and Al Raha. 5 Villa and 5 Apartment Locations [Base: Q1 2016=100] The fourth quarter VPI - Residential Rental Values declined 3.1% quarterly 120 and 9.3% annually to 71.5 points. Abu 100.0 98 Dhabi’s gross yields averaged 7.6%, 96.8 100 93.7 92.3 for apartments at 7.9% and villas with 88.8 88.7 85.2 82.9 82.2 81.3 78.9 6.8%. 77.2 75.6 80 73.8 71.5 60 40 20 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 2018 2019 Source: ValuStrat For more details, please visit www.valustrat.com/vpi www.valustrat.com | 2 Macro-Economic Snapshot • The UAE Cabinet approved 2020 federal Abu Dhabi Population budget of AED 61 billion, with 32.6% going to government affairs, 38% to social development and services, 14% to 2,141,400 infrastructure and economic resources 2019E 2,023,600 2018E • Fitch Ratings affirmed AA long-term issuer rating and gave a stable outlook for Abu 1,912,300 Dhabi on foot of its strong fiscal and external 2017E metrics as well as high GDP per capita 1,807,000 2016 • International Monetary Fund (IMF) forecasted UAE’s non-oil GDP growth could reach 2.5%, 1,720,000 with oil GDP at 1.4% in 2020 2015 • Abu Dhabi’s non-oil foreign trade fell 8.8% 1,640,000 YoY to AED 154.4 billion stemming from 2014 declines in imports and non-oil exports by 12.7% YoY and 14.8% YoY, respectively during 1,537,000 the nine months ended September 2019, as 2013 per Statistics Centre Abu Dhabi (SCAD) • Oil prices averaged USD 58.8 per barrel, declined 9% annually • UAE Central Bank increased the upper age limit towards mortgage lending to 70 years from 65 as long as the client is self employed Source: Statistics Centre Abu Dhabi, ValuStrat Consumer Price Index vs. Housing Index • US Federal Reserve January 2016 – YTD reduced interest rates by a quarter of a 125 percent, the UAE Central Bank followed 120 suit 115 • As of November 2019, 110 Abu Dhabi's inflation 105 rate softened 0.3% annually and 0.5% 100 monthly 95 • Housing and Utilities Jul Jul Jul Jul Oct Oct Oct Oct Apr Apr Apr Apr Jan Jan Jan Jan Jun Jun Jun Jun Feb Feb Feb Feb Sep Sep Sep Sep Dec Dec Dec Nov Nov Nov Nov Aug Aug Aug Aug Mar Mar Mar Mar May May May May Expenses dropped 2016 2017 2018 2019 3.7% YoY with no monthly change General Index (2014=100) Housing, Water, Electricity, Gas and Other Fuels Source: Statistics Centre Abu Dhabi 3 | Abu Dhabi Real Estate Market 4th Quarter 2019 Review Residential Supply • Abu Dhabi City had an estimated 237,864 Abu Dhabi Residential Supply residential homes stock as of 2019 2016-2020 (’000 UNITS) • A total of 3,878 residential units were confirmed to have been completed for the year, 2,795 apartments and 1,083 villas/townhouses, as total completions represented 62% of the projected residential supply estimated at the start of 2019 2020E 0.3 8.2 238 • Key residential completions during 2019 were 2019E 1.1 2.8 234 997 apartments and 83 villas confirmed as 2018 completed in Saadiyat Island, 1,000 villas in 234 Yas Island, and 917 apartments in Al Reem 2017 230 Island 2016 226 • Notable expected deliveries during 2020 include 3,832 apartments in Al Reem Island, Current Stock Al Raha Beach with 1,859 apartments, and Al New Apartments* Marayah Island with 1,692 apartments New Villas* *May be subject to significant downward adjustment Source: Urban Planning Council, REIDIN, MEED Projects, ValuStrat Residential Sales • The average citywide residential asking price Apartment Asking Prices per square metre declined 2.1% QoQ and fell 6.3% when compared to last year -4.4% -1.6% Last Year Last Quarter • The average asking price for ready apartments stood at AED 13,005 per sq m (AED 1,208 per sq ft) displaying a decline of 1.6% QoQ, and 4.4% lower than the same period last year • For ready villas, the average asking price was Villa Asking Prices AED 9,943 per sq m (AED 924 per sq ft) indicating prices declined 3.4% quarterly and -10.7% -3.4% 10.7% annually Last Year Last Quarter Source: REIDIN, ValuStrat * Ready Properties Only www.valustrat.com | 4 Residential Rents • Overall average residential asking rents fell Apartment Asking Rents 9.3% when compared to the same period last year -7.6% -2.8% Last Year Last Quarter • On a quarterly basis, citywide average asking rents fell 3.1% • Average apartment asking rents in Abu Dhabi City dropped 7.6% YoY and 2.8% QoQ • Citywide villa asking rents declined 11.8% YoY Villa Asking Rents and 3.6% QoQ -11.8% -3.6% • Exceptions to the quarterly citywide negative Last Year Last Quarter rental trends, slight increases in average asking rents were observed in Al Reef (apartments 1.4%, villas 0.8%) and Al Reem (2.1%), and Saadiyat Island (1.1%) • The average occupancy rate among a sample Source: REIDIN, ValuStrat of more than 78,000 residential units in Abu Dhabi city, stood at 79% Average Asking Rents (’000 AED per annum) and Quarterly Change (%) Apartments Villas 58 87 Al Reef 71 1.4% MBZ City 120 -1.4% 90 140 66 107 Al Reem 91 2.1% Al Reef 135 0.8% 134 150 85 145 Al Muneera 116 -0.6% Al Raha 167 -2.2% 156 222 100 294 Al Bandar 134 -5.2% Saadiyat 331 1.1% 183 463 One Bedroom Three Bedroom Three Bedroom Five Bedroom Two Bedroom Quarterly Change (%) Four Bedroom Quarterly Change (%) Source: REIDIN, ValuStrat Source: REIDIN, ValuStrat 5 | Abu Dhabi Real Estate Market 4th Quarter 2019 Review Office Supply • An estimated 104,369 sq m (1.12 million Abu Dhabi City Office Supply sq ft) of office Gross Leasable Area 2016-2020 (GLA) was confirmed as completed (Million sq m GLA) during 2019, bringing the total GLA in Abu Dhabi city to 3.69 million sq m (39 million sq ft) • During Q4, Sadeem Al Raha Beach with 0.19 approximately 5,000 sq m (53,820 sq ft) 0.10 GLA finished construction 3.58 3.69 3.58 3.51 • A total of 30,000 sq m (322,917 sq ft) GLA of new office space was leased in Al 3.10 Maryah Island, as per Mubadala Real Estate • Initial supply projection for 2020 stood at 188,542 sq m (2.03 million sq ft) GLA which may be subject to a significant downward adjustment 2016 2017 2018 2019E 2020E Existing Stock Expected Supply Source: REIDIN, MEED Projects, ValuStrat Office Rents • Office asking rents in primary commercial Office Asking Rents districts fell 1.1% since Q3 2019, and 10.2% annually -10.2% -1.1% Last Year Last Quarter • The average citywide asking rent for offices sized between 93 sq m (1,000 sq ft) to 186 sq m (2,000 sq ft) fell to AED 829 per sq m (AED 77 per sq ft) • Abu Dhabi main island commanded lease rates which averaged at AED 893 per sq m Source: REIDIN, ValuStrat (AED 83 per sq ft) while average office rents in Al Reem Island stood at AED 700 per sq m (AED 65 per sq ft) • The average occupancy among buildings within the city’s central business districts stood at 79% www.valustrat.com | 6 Retail Supply • Lulu Group announced to occupy 1,833 sq m Abu Dhabi City Retail Malls and (19,730 sq ft) GLA out of 28,000 sq m (301,389 Shopping Centres 720 sq ft) GLA dedicated for retailers at Abu Dhabi (‘000 sq m GLA) Midfield Terminal.

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