REVIEW VISION Dubai www.valustrat.com ValuStrat Price Index – Dubai Residential Capital Values, Base: January 2014=100 ValuStrat Price Index – Dubai Residential Rental Values, Base: Q1 2014=100 ValuStrat Price Index – Dubai Office Capital Values, Base: Q1 2015=100 Q12019 REVIEW • The first quarter ValuStrat Price Index (VPI) for residential properties displayed an overall 12.4% annual fall in capital values, with quarterly declines of 3.2%. This downward trend resulted in Tourism 27.1% citywide capital value loss since the peaks of mid-2014 • 4.75 million international guests by the end of March 2019 • The residential rental VPI in Dubai stood at 76.5 points, declining 23.5% since 2014, softening 1.9% quarterly and 9.0% annually. • PRO fee for tourism and travel-related activities was waived by Dubai’s net yields averaged 5.5%, for apartments at 5.7% and villas Dubai Tourism and Commerce Marketing (DTCM) with 4.5% • Emaar announced Dubai Stars in Downtown, a local version of • VPI for Dubai’s office capital values stood at 74 points, suggesting Hollywood’s Walk of Fame that average capital values were 26% lower than the same period during the base year 2015, 14.4% lower than the same period last • The first phase of Al Shindagha Museum was opened by Dubai VPI Residential VPI Residential VPI Office Culture and Arts Authority year and 4.7% below the previous quarter Capital Values Rental Values Capital Values • Dubai Frame achieved 1 million visitor milestone 81.5 76.5 74.0 -12.4% -9.0% -14.4% Q1 Y-o-Y Q1 Y-o-Y Q1 Y-o-Y Launches • His Highness Shaikh Mohammad Bin Rashid Al Maktoum and Dubai Hotel Holdings launched a new 550 metre tower project Burj Jumeirah as • Dubai’s first S hotel and Leva Hotel opened centrepiece for Downtown Jumeirah development • OYO Hotels and Homes to debut in the city’s hospitality sector • Emaar Properties unveiled Golf Grove in Dubai South and the third phase of Arabian Ranches • Nassima Royal Hotel was rebranded to Voco Dubai • Cherrywoods and Central Park at City Walk was announced by • Emaar sold AED 2.2 billion worth of hospitality assets to Abu Dhabi Meraas National Hotels (ADNH) • Dubai International Financial Centre 2.0 (DIFC 2.0) 1.2 million sq m (13 million sq ft) expansion plan Residential Off-Plan Residential Off-Plan Sales Ticket Size Sales Volume 1.59m 4,418 AED Transactions Office Economy • DIFC 2.0 to add 69 million sq m (6.4 million sq ft) office GLA 24.6% 4.8% Q-o-Q Q-o-Q • The Offices 4 and 5 at Once Central DWTC was completed boasting • 2018 GDP grew 1.94% to AED 398.13 billion, as per Dubai Statistics 69,549 sq m (695,235 sq ft) GLA Centre • ICD Brookfield reached top-out status and sealed a pre-let • US foreign direct investments reached more than AED 14 billion Residential Ready Residential Ready arrangement with EY to occupy 11,148 sq m (120,000 sq ft) GLA Sales Ticket Size Sales Volume • Shaikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council 1.64m 2,677 authorised Dubai Silk Road Strategy AED Transactions • International Monetary Fund forecasted Dubai’s economic growth could reach up to 4% 7.0% -0.9% • 650,000 Value Added Tax (VAT) returns filed during first year of Q-o-Q Q-o-Q implementation Infrastructure • Oil prices averaged USD 60.5 per barrel, declined 6% annually • Dubai allocated AED 58.6 billion for infrastructure projects • Road and Transport Authority (RTA) opened phase 2 of road projects to and from International City • Jebel Ali Lehbab Road was renamed to Expo Road • The main bridge at the Expo Road and Al Asayel Street intersection was opened Transactions • There were 4,418 off-plan transactions and 2,677 ready home cash sales worth a total of AED 11.4 billion, up 33.4% annually Office Sales Office Sales Office • Office transaction volumes during the first quarter jumped 64% Ticket Size Volume Rents when compared to the previous quarter, including a substantial number of bulk sales of space priced at less than AED 6,458 per 1.05m 387 968 sq m (AED 600 per sq ft) AED Transactions AED/sq m p.a. Technology • Real Estate Regulatory Authority (RERA) launched Taqyimee smart application for property surveyors -17.50% 64.0% -1.0% Q-o-Q Q-o-Q Q-o-Q Sales • As prices kept on falling, sales volumes continued to rally for last 6 months perhaps with an anticipation of a bottoming-out market, as Industrial the first quarter saw off-plan sales increase 21.1% YoY and ready properties sales improve 8.5% YoY • Lootah Real Estate announced completion of its W10 warehouse project in Dubai Investment Park • Ticket sizes for both ready and off-plan saw considerable quarterly growth rates, off-plan up 24.6% and ready grew 4.8% • Dubai Silicon Oasis Authority completed the construction of phase 6 for its Light Industrial Unit project • The highest share (26%) of ready villas sold priced between AED 1M - AED 2M since 2016 Hotel Average Hotel • Crown Prince approved Dubai Silk Road strategy Daily Rate Occupancy • Overall transacted office prices were 20.9% lower than last year, 498 84% • Industrial property prices remained relatively stable QoQ but and down 20.3% QoQ declined 1.7% YoY on average, no notable quarterly change in rental AED - rates recorded -11.4% -3.1% Q1 Y-o-Y Q1 Y-o-Y Transportation Retail • Dubai Route 2020 metro extension reached 70% completion • Sapphire Mall in Dubai Industrial Park with 19,974 sq m (215,000 • Nol gates at Dubai Metro announced to undergo upgrades that will sq ft) GLA was opened include new AFC Gates with 3D sensors • Dubai Duty Free announced total turnover reached more than USD • Smart Safety Bus initiative was launched 2 billion in 2018, up 4.3% YoY • Uber acquired home-grown ride-hailing company Careem for USD • Emaar announced full ownership of online fashion marketplace 3.1 billion Namshi • Dubai Airport rebranded with a new logo • City Centre Deira to undergo renovation as per Majid Al Futtaim Q22019 REVIEW • The second quarter ValuStrat Price Index (VPI) for residential properties displayed an overall 11.5% annual fall in capital values, with quarterly declines decelerating to 2.9%. This downward trend Infrastructure resulted in 29.3% citywide capital value loss since the peaks of mid-2014 • An estimated 80% of roadworks to and from Jewel of the Creek project completed • The residential rental VPI in Dubai stood at 73.9 points, declining 26.1% since 2014, dropping 3.4% quarterly and 10.6% annually. • Construction contract awarded for road projects in Al Khawaneej Dubai’s net yields averaged 5.7%, with apartments at 5.9% and corridor and Mushrif Park villas at 4.7% • Dubai – Al Ain Road improvement projects approved • VPI for Dubai’s office capital values declined to 69.3 points, • New Dubai – Sharjah alternative route finished construction suggesting that average capital values are 30.7% lower than the VPI Residential VPI Residential VPI Office same period during the base year 2015, 16.1% lower than the same Capital Values Rental Values Capital Values period last year and 6.3% below the previous quarter 79.2 73.9 69.3 -11.5% -10.6% -16.1% Q2 Y-o-Y Q2 Y-o-Y Q2 Y-o-Y Retail Tourism • Dubai Retail launched phase 1 of its 1,394 sq m (15,000 sq ft) community centre project in Remraam • Dubai Arena officially opened and renamed to Coca-Cola Arena • Anchor tenant Carrefour in Cityland Mall was opened • Nakheel announced a new zombie theme park in Deira Islands • Phase 1 of Reel Cinema megaplex at Al Ghurair Centre finished • Highly anticipated Six Flags theme park project has been cancelled construction • Tourism officials consider loosening visa rules for more countries • Amazon.com officially launched, replacing Souq.com and ahead of EXPO introduced Prime membership • Dubai EXPO 2020 1-day ticket price of AED 120 (USD 33) revealed Residential Off-Plan Residential Off-Plan Sales Ticket Size Sales Volume 1.48m 4,662 AED Transactions Sales Hotel • The highest share (28%) of ready villa purchases priced between AED 1M - AED 2M since 2016, and a significant share of 9.6% of • Vida Emirates Hills was inaugurated -7.1% 5.5% villas priced above AED 10 million Q-o-Q Q-o-Q • JW Marriott Deira ceased operation after 26 years in business • There were 374 office sales transactions during the second quarter, 3.4% lower than the previous quarter • Construction works begun for MGM, Bellagio and Aria Hotels at The Residential Ready Residential Ready Island Sales Ticket Size Sales Volume • Overall transacted office prices were 10.9% lower than last year, and down 2.1% QoQ 1.81m 2,687 AED Transactions 10.2% 0.4% Q-o-Q Q-o-Q Residential Legal • DLD considering a three-year rental cap • DIFC enacted new employment and insolvency laws • Mirdif Hills announced to start handover of units • UAE unveiled golden card permanent residency law • DAMAC’s sharia compliant property Ghalia at JVC welcomed its first residents • New family sponsorship policy implemented Office Sales Office Sales Office Industrial Ticket Size Volume Rents Market Sentiment • DHL opened a 3,200 sq m (34,445 sq ft) exporting facility in Dubai 0.92m 374 945 • As capital values continued to soften, there was a relatively strong South AED Transactions AED/sq m p.a.