Dubai 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 Dubai Creek Harbour TRANSACTIONS • DAMAC’s Reva Residences in Business Bay • There were 3,649 off-plan transactions and 2,468 ready home • La Quinta Villanova in Dubailand 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 – Casablanca 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 • Dubai Frame 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 • Route 2020 financing completed business in the emirate • World’s tallest hotel, Gevora 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 Emirates 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 • Dubai Parks and Resorts 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 Address Downtown re-opened • Majid Al Futtaim opened its largest FMCG logistics centre at National • Two Caesars Palace hotels Industries Park announced for Bluewater Island • Queen Elizabeth 2 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 the world’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 Downtown Dubai 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 Jumeirah 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 Dubai Metro 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 Remraam 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 – Jebel Ali Lehbab Roads • Marriott Aloft Dubai South 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 Salik 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 Jebel Ali Free Zone 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 Jumeirah Bay 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 Al Sufouh 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 Mall of the Emirates • Dubai Tram transported more than 20 million riders in four years HOTEL • Jumeirah Beach 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 Falconcity of Wonders 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 • Bluewaters Island opens to public 3.1 million, while active daytime W Hotel opened in Palm Jumeirah 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,