Property Review Northern Emirates Real Estate Report Q2 2019 BUILDING The building consultancy team at Asteco have a wealth of experience and an in-depth knowledge CONSULTANCY of construction technology, building pathology and effective project management methods With you throughout all stages of your which enable us to provide our Clients with a comprehensive building consultancy service. built asset lifecycle

Technical Due Snagging Area Diligence Inspections Verification

Life Cycle Schedules of Schedules of Costing Dilapidations Condition

Project RERA Technical Building Monitoring and Reports Condition Audits Surveys

Defect Project Insurance Analysis Management Reinstatement For more details, please contact Valuation Nick Constantine, BSc (Hons) MRICS, Head of Building Consultancy [email protected] NORTHERN EMIRATES MARKET OVERVIEW

Apartment rental rates in the Northern Emirates continued to soften with average quarterly and Similar to last quarter, average sales prices in declined by 2% on average with more annual declines of 5% and 13%, respectively. Further downward pressure on rates is expected as the pronounced drops of up to 10% in stand-alone buildings in GCC freehold areas compared with delivery of new supply and resulting drop in rental rates in impedes the recovery of rates in the properties in master planned communities offered on a leasehold basis to all nationalities. Northern Emirates in the short-term. Following the 54,125 transactions worth AED 22.5 billion recorded in 2018, the Sharjah Real Estate Asteco’s research indicated the most notable decreases for typical apartment units in and Ras Al Registration Directorate (SRERD) registered 27,588 transactions valued at AED 14.7 billion in H1 2019. Khaimah (RAK) with drops of 9% and 7% during Q2 2019 due to the handover of new supply with The total included 1,893 sales transactions across the Emirate with the majority of the activity taking better quality specifications/facilities at competitive rates within the Emirates and in neighbouring place in Muwaileh Commercial Area, followed by Al Khan and Al Nahda. At this rate, the Emirate is well municipalities. Whilst Ajman Residents relocated to Sharjah and Dubai, Tenants in RAK opted for the on its way to surpass last year’s performance, particularly in regards to total value of transactions. local master plan communities of Mina Al Arab and Al Marjan Island. The Northern Emirates saw the addition of a couple of retail developments with the opening of Oasis It is noteworthy to mention that there was a marked drop in typical apartment listings (for rent) in Mall in Sharjah (by Landmark Group) and Mall of UAQ in Umm Al Quwain (by Lulu). , suggesting good occupancy rates in the Emirate. Furthermore, the new 89km Khorfakkan highway was inaugurated in April 2019. It links Emirates Road Sharjah office rental rates continued their downward trend with quarterly and annual declines of 3% (E611) in Sharjah with Wadi Shi Square in Khorfakkan, thus providing ease of access to the growing and 9% on the back of low demand. tourist destination and reducing travel time between the two cities to 45 minutes.

Similar to Dubai and , the local governments of the Northern Emirates are introducing larger budgets and more diversification strategies to stimulate the economy and boost investment, which is expected to translate into employment/business growth and hence increased transaction activity in the Real Estate market in the medium- to long-term.

3 Northern Emirates Real Estate Report - Q2 2019 NORTHERN EMIRATES APARTMENT RENTAL RATES

(All figures in AED 000's p.a.)

STUDIO 1 BEDROOM 2 BEDROOMS 3 BEDROOMS % CHANGE Q1 2019 - Q2 2018 - FROM TO FROM TO FROM TO FROM TO Q2 2019 Q2 2019

TYPICAL 12 16 13 26 20 30 41 -4% -11% SHARJAH HIGH END 18 25 28 38 32 64 48 70 -5% TYPICAL 10 14 21 14 24 24 -9% -22% AJMAN HIGH END 15 21 22 25 38 42 -3% -13% UMM AL QUWAIN 13 17 17 28 35 -7% TYPICAL 36 33 44 -17% HIGH END 19 30 27 45 55 63 78 TYPICAL 20 19 29 35 FUJAIRAH HIGH END - 28 42 32 52 52 70 -3% -12%

Q-o-Q Y-o-Y Since peak Since market low % Change Since Q1 2019 Since Q2 2018 Q1 2015 Q4 2012 -5% -13% -29% -2%

4 Northern Emirates Real Estate Report - Q2 2019 SHARJAH APARTMENT RENTAL RATES

(All figures in AED 000's p.a.)

STUDIO 1 BEDROOM 2 BEDROOMS 3 BEDROOMS % CHANGE Q1 2019 - Q2 2018 - FROM TO FROM TO FROM TO FROM TO Q2 2019 Q2 2019

AL MAJAZ 15 20 20 38 24 60 32 70 -2% -9% AL QASIMIAH 13 19 15 29 20 38 30 52 -4% AL NAHDA 16 23 18 36 51 37 65 AL KHAN (AL MAMZAR) 16 22 19 38 25 64 35 70 -3% -10% ABU SHAGARA 13 17 31 21 33 46 -12% AL BUTINA 12 16 13 24 20 27 31 45 -4% -10% AL YARMOOK 16 22 27 30 42 -8% ROLLA 12 17 17 24 22 30 36 42 -1% -8% AL WAHDA 14 23 22 28 24 40 32 52 -2% CORNICHE 25 24 25 58

11%

Q-o-Q Y-o-Y Since peak Since market low % Change Since Q1 2019 Since Q2 2018 Q1 2015 Q4 2011 -3% -10% -30%

5 Northern Emirates Real Estate Report - Q2 2019 SHARJAH APARTMENT SALES PRICES

Q-o-Q % Change AED per sq.ft. 0 100 200 300 400 500 600 700 800 900 1,000 (Q1 2019 - Q2 2019)

AL KHAN (TYPICAL) 325 450 -3%

AL KHAN (HIGH END) 475 675 -8%

AL TAAWUN 325 450 -5%

AL NAHDA 375 475 -2%

AL MAJAZ (TYPICAL) 375 525 -4%

AL MAJAZ (HIGH END) 450 600 -0%

AL MAMSHA * 550 750 0%

AL ZAHIA * 750 925 -3%

AL JAADA * 700 850 0%

* Leasehold ownership (up to 100 years) for all nationalities

Q-o-Q % Change Since Q1 2019 -2%

6 Northern Emirates Real Estate Report - Q2 2019 SHARJAH OFFICE RENTAL RATES

(All figures in AED per sq.ft. p.a.)

AVERAGE RENTAL RATES % CHANGE

FROM TO Q1 2019 - Q2 2019 Q2 2018 - Q2 2019

AL TAAWUN ROAD 28 40 -4% -13% CORNICHE AREA 40 56 -11% AL WAHDA 36 42 -2% -6% AL QASEMEH 30 50 -3% -10% CLOCK R/A 36 44 -1% -4% AL YARMOOK 22 38 -9% INDUSTRIAL AREA 24 43 -8%

Q-o-Q Y-o-Y % Change Since Q1 2019 Since Q2 2018 -3% -9%

7 Northern Emirates Real Estate Report - Q2 2019 11

NORTHERN EMIRATES Arabian Gulf

MAP SHARJAH

RAS AL KHAIMAH 1 Abu Shagara 2 Al Khan UMM AL QUWAIN 3 Al Majaz AJMAN 4 Al Nahda SHARJAH 5 Al Qasimiyah FUJAIRAH 6 Al Taawun 7 Al Wahda DUBAI 11 8 Corniche / Buhaira 9 Khaledia 10 King Faisal and King Abdul Aziz Streets 5 10

8 1 ABU DHABI 9

7 311 3

RAS AL KHAIMAH Mina Al Arab

1 Mina Al Arab 1

2 Marjan Island 2

3 Al Hamra 6

Al Hamra 4 Marjan Island

3 2

11

8 Northern Emirates Real Estate Report - Q2 2019 About Asteco

The Middle East’s largest full service Real VALUATION & ADVISORY SALES BUILDING CONSULTANCY Estate Services Company, Asteco was formed Our professional advisory services are Asteco has established a large regional The Building Consultancy Team at Asteco have in Dubai in 1985. Over the years, Asteco has conducted by suitably qualified personnel property Sales division with representatives a wealth of experience supporting their Clients gained enormous respect for consistently all of whom have had extensive Real Estate based in the UAE, Qatar and Jordan. Our throughout all stages of the built asset lifecycle. delivering high quality, professional, value- experience within the Middle East and Sales teams have extensive experience in the Each of the team’s highly trained surveyors added services in a transparent manner. It is internationally. negotiation and sale of a variety of assets. have an in-depth knowledge of construction also widely recognised for its involvement with technology, building pathology and effective Our valuations are carried out in accordance many of the projects that have defined the LEASING project management methods which enable landscape and physical infrastructure of the with the Royal Institution of Chartered Asteco has been instrumental in the Leasing us to provide our clients with a comprehensive Emirates. Surveyors (RICS) and International Valuation of many high-profile developments across the building consultancy service. Standards (IVS) and are undertaken by GCC. Asteco has an essential combination of local appropriately qualified valuers with extensive FRANCHISE knowledge and international expertise. local experience. ASSET MANAGEMENT Our brand, network, system and procedures A deeply established brand, renowned for Asteco provides comprehensive Asset are now available in territories across the its application of the latest technological The Professional Services Asteco conducts Management services to all property Owners, MENA region. Our Licensing services currently advances, its commitment to transparency, throughout the region include: whether a single unit (IPM) or a regional include Real Estate Brokerage Franchising and winning strategies and human expertise. mixed-use portfolio. Our focus is on maximising associated support services with many of the • Consultancy & Advisory services Undisputed Real Estate experts, Asteco value for our Clients. key elements designed specifically around represents a significant number of the • Market research the Franchisee, making it a truly unique and region’s top property Owners, Developers and • Valuation services OWNERS ASSOCIATION bespoke franchise opportunity. Investors. Asteco has the experience, systems, procedures and manuals in place to provide streamlined comprehensive Association Management and Consultancy services to residential, commercial and mixed-use communities throughout the GCC Region.

Elaine Jones John Stevens John Allen James Joughin Jenny Weidling Ghada Amhaz Tamer Ibrahim Chaaban FRICS MSc, BSc (Hons), MRICS BSc, MRICS BSc (Hons), MRICS BA (Hons) MSc BE Executive Chairman and Managing Director/ Executive Director - Senior Associate Manager - Research and Manager - Research and Associate Director / Founder / Director - Director - Asset Management Valuation & Advisory Director - Head of Valuations Advisory, Dubai Advisory, Abu Dhabi General Manager - Transactional Services +971 4 403 7777 +971 4 403 7777 +971 4 403 7777 +971 4 403 7777 +971 2 626 2660 +971 3 766 6097 +971 4 403 7777 [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

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 UAE market. Averages, however, represent a wider range of areas. Particularly exclusive or unique projects have been excluded from the data to avoid distorting averages. 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 License No. 218551. Paid-up Capital AED 4,000,000. | ORN 180

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