OUTLOOK REVIEW www.valustrat.com ValuStrat Price Index – VPI Dubai Residential Base: January 2014=100 ValuStrat Price Index – VPI Dubai Office Base: January 2015=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

SALE RENT SALE RENT OCCUPANCY AVERAGE DAILY RATE

93 +0.7% -0.7% 87 -8.2% -4.9% -0.3% -2.1%

LAUNCHES

• Emaar Beachfront, (JV with Aldar Properties), Saffron at Emaar South and The Grand at Harbour TRANSACTIONS • DAMAC’s Reva Residences in • There were 3,649 off-plan transactions and 2,468 ready home • La Quinta Villanova in by sales worth a total of AED 8.6 billion Dubai Properties SALES

INFRASTRUCTURE • Lebanon Island at The Word Islands Dubai was put on sale for AED 80 million • RTA opened Rashidiya bridge at Airport Street and Airport – Street bridge

• 220 free parking spaces allocated to electric cars announced by RTA RETAIL

• New highway linking Dubai – Al Ain • Dubai Chamber of Commerce and Road and Al Yalayis Road was Industry (DCCI) formed a retail TOURISM opened business group with members coming mostly from major retail • 4.65 million total international • Al Khail and Financial Centre business conglomerates guests by the end of March 2018 Roads link bridge was opened • Dubai Mall Fashion Avenue • officially opened to the • AED 30.1 million Hatta Road expansion opened public project approved ECONOMY • Transit tourist visa announced • DLD completed phase one of • Value Added Tax (VAT) capped at 5% building classification project officially took effect

• Two new bridges at Sheikh Rashid – • Sheikh Hamdan announced a freeze Sheikh Khalifa Bin Zayed Streets on all government fees for the next intersection were opened three years to help boost economic HOTEL competitiveness and ease of doing • financing completed business in the emirate • World’s tallest hotel, • Dubai Municipality announced to towering at 356 metres, was impose waste disposal fee opened along Sheikh Zayed Road

OFFICE

• Two predominantly office towers, The Exchange DIFC and The Opus Business Bay, completed TRANSPORTATION construction

• Dubai’s ordered 36 Airbus • DAFZA announced 25% increase in A380 aircraft worth AED 58.7 billion office tenancies

SALE RENT SALE RENT OCCUPANCY AVERAGE DAILY RATE

90 +0.4% -1.7% 83 -13.2% -1.0% -3.0% -7.9%

TOURISM

• Russian tourists continued to pour into the city at 77% growth rate

RESIDENTIAL • Federal Tax Authority approved VAT refund scheme for tourists • Meraas started to handover Nikki Beach Residences • witnessed 46% increase in number of visitors • 11 new off plan projects launched INDUSTRIAL • Dubai Safari closed to undergo upgrades • Paid parking started in Al Khail • Dubai Industrial Park secured a Gate community HOTEL AED 60 million investment

• The re-opened • Majid Al Futtaim opened its largest FMCG logistics centre at National • Two Caesars Palace hotels Industries Park announced for Bluewater Island

• opened as a floating hotel INFRASTRUCTURE • Three new bridges which were part RETAIL of Airport Street improvement project were opened • DCCI announced to create retail rent index • RTA opened a four-lane tunnel along Sheikh Rashid Street • Noon.com formed a strategic partnership with eBay • Phase 2 of Seh Al Salam ECONOMY carriageway opened • The Springs Souk opened • Dubai announced to form ’s first stock market for free • Shindagha Bridge project launched zone companies • RTA opened phase 2 of road project LEGAL • Dubai Executive Council announced improvements in Business Bay reduced fees in education, • A proposal for a new mortgage law aviation and real estate sectors to was announced by DLD help boost the emirate’s economy

• Dubai Economic Department (DED) • Foreign Direct Investment (FDI) into to exempt on-shore companies OFFICE Dubai rose 26% YoY in H1 2018 to from penalties resulting from late AED 17.7 billion - according to license renewal under a new decree • Construction of HSBC headquarter Dubai Investment Development Agency • DLD announced to digitise all real office in reached estate transactions under a new completion stage platform to be called Real Estate Self Transaction (REST) • Global co-working brand Our Space opened its flagship workspace in Lamborghini building along Sheikh Zayed Road

TRANSPORTATION

• Dubai Statistics Centre estimated 700,000 daily commuters using Dubai’s mass transport and roads MARKET SENTIMENT

• Steep declines in capital values may have boosted sales, as transaction volumes increased across the board, with off-plan sales up 10.9% CITYSCAPE YoY and 18.7% QoQ, while properties in the secondary market rallied • This year’s edition saw less off plan upwards, 1.5% YoY and 10.2% QoQ projects launches, increased interest for ready units

• Notable off plan launches include TRANSACTIONS Marsa Meydan by Meydan Group and Dubai Holdings, Madinat • 18,191 property sales transactions Living worth AED 40 billion were recorded

SALE RENT SALE RENT OCCUPANCY* AVERAGE DAILY RATE*

87 -7.2% -5.1% 81 +2.9% -7.2% -1.2% -4.4% * Estimated

TRANSPORTATION

• Phase 3 of dedicated bus and taxi lanes were opened by RTA TOURISM • Tunnelling works for extension 100% completed • Meraas unveiled Hatta Eco-Tourism ECONOMY projects • JLT metro station renamed as DMCC • S&P lowered ratings of two government linked companies, TRANSACTIONS Dubai Electric and Water Authority (DEWA) and DIFC Investments • Established areas that witnessed (DIFCI) substantial off-plan sale transactions included Downtown • UAE Central Bank raised interest Dubai at 85% of sales being rates for the third time this year in off-plan, Business Bay at 84% and line with US Fed decision 75% LEGAL

• New rental law focused on landlord-tenant relationship was drafted HOTEL

• Hilton took over operations of three hotels in Al Habtoor City

• Over a thousand hotel rooms added with the opening of four hotels INFRASTRUCTURE including the debut Hamptons by Hilton in Dubai Airport • RTA awarded contract to upgrade Al Qudra – Lehbab Roads • Marriott Aloft opened RETAIL junction

• Phase 2 of Souq Extra in Dubai • Two-lane tunnel in Airport Street Silicon Oasis began construction and Marrakech Street opened INDUSTRIAL • Nakheel opened Pavilion at Badrah • New gate was set up in Sheikh • Wockhardt opened an AED 147 Zayed Road after passing Ibn • Emaar revealed Dubai Square Mall million manufacturing facility in Battuta Mall heading towards Abu as part of Dubai Creek Harbour Dhabi project • Sika opened a new multi-million dirham production facility in Dubai Industrial Park GOVERNMENT

• With the aim of boosting the economy, UAE government announced 10-year visa for investors and certain professionals RESIDENTIAL as well as 100% foreign ownership of non-free zone establishments • Developer of Bulgari Residences in started to handover • 5-year renewable residency visa units announced for expat retirees. Subject to either AED 2m property, • Danube's Lawnz Project sold out AED 1m savings or AED 20,000 income. MARKET SENTIMENT

• Summer holidays and Eid break SALES may have slowed residential property sales this quarter, as • DLD announced AED 56.6 billion transaction volumes saw worth of property sales during the considerable declines first nine months of 2018

SALE* RENT* SALE* RENT* OCCUPANCY* AVERAGE DAILY RATE*

85 -6.5% -3.0% 80 +1.0% -4.0% -0.5% -2.3% * Estimated * Estimated * Estimated

RETAIL

• Union Properties announced a LEGAL 1 million sq ft shopping centre, One Avenue Mall in Motor City • Low-cost hiring insurance law took effect • Carrefour launched its first sail TRANSACTIONS through supermarket for Kite • UAE Central Bank issued a law to lift • More home buyers, particularly Beach, Jumeriah Public Beach and the 20% cap on real estate lending Beach as part of the total deposits of banks end-users shift focus on ready to move-in properties resulting in a 50% share of overall home sales • Nike to open a 30,000 sq ft • Anti-money laundering law approved INFRASTRUCTURE megastore in Dubai Mall by Federal government • Germany island on The Heart of • RTA opened multi deck traffic Europe with 32 villas, sold out • Givenchy opened a large boutique corridors along Sheikh Zayed Road in Dubai Mall

• AED 590 million smart traffic • Tesla opened their first retail store infrastructure project approved in The

• transported more than 20 million riders in four years HOTEL

• Hotel re-opened TOURISM after five months of restoration works • His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice • Oakwood inked a deal to manage President and Prime Minister of and operate the UAE and Ruler of Dubai hotel projects launched the Jumeirah Project • Caesars Palace Bluewaters • Dubai Safari re-opened with more ECONOMY welcomed its first guests animals and attractions • Dubai's resident population crosses • Emerald Palace Kempinski and • opens to public 3.1 million, while active daytime W Hotel opened in population reaches almost 4.3 million

• Department of Economic Development (DED) issues 13,825 new licences in the first 9 months of 2018

• For the fourth time, US Fed Reserve increased interest rates by a quarter point with UAE Central Bank following suit. As a result, borrowing costs increased

HOTEL

• Upcoming hotels: Premier Inn Dragon City, ME by Melia hotel, Vida Harbour Point, The Resort Jebel Ali Beach, Taj Hotel Palm Jumeirah, TOURISM DAMAC Towers by Paramount and Lemon Tree Hotel, to name a few • Upcoming attractions: Dubai Arena, RETAIL Mohammed Bin Rashid Library, • Upcoming malls: Festival Plaza, • Asian Cup likely to draw football fans from across the region ECONOMY

• IMF expects the city’s GDP to OUTLOOK accelerate by 4.1% in 2019

• UAE GDP to expand 3.8% as various • Further US Federal Reserve rate economic stimulus may start to hikes are expected impact the country’s vital sectors

• Long term visa initiatives may benefit overall economy, particularly the real estate sector

• Capital values and rents soften at a • Major construction works to be slower rate. Increasingly affordable completed by October rents, particularly for townhouses and small villas. More competitive • About 40,000 workers by the second options for investors half INFRASTRUCTURE • Rentals and capital values for • Route 2020 to be operational but prime office space located in DIFC • Phase 2 of Latifa bint Hamdan not yet open for public and Downtown Dubai to remain Street and Umm Al Sheef Street stable. Secondary locations to project soften further

RESIDENTIAL OFFICE HOTEL POPULATION ‘19 600,000 units 9.5 million sq m GLA 138,000 keys 3,400,000 people VPI ValuStrat Price Index