Q1 2018 Abu Dhabi Market Report

Q1 2018

Abu Dhabi Market Report

FOREWORD Cavendish Maxwell is a highly respected independent firm of chartered surveyors and property consultants, focusing on property services throughout the Middle East and Africa. Established in 2008, Cavendish Maxwell is now one of the most influential property consultancies in the region.

As a fully qualified member firm of the Royal Institution of Chartered Surveyors (RICS), and with extensive knowledge of the region, Cavendish Maxwell has the necessary experience, expertise and insight to deliver property advice of the highest standard.

Our reports are used for loan security, audit, insurance reinstatement, dispute resolution, risk management, debt recovery, performance analysis, project financing, development strategy and government initiative implementation.

We provide a comprehensive range of property services across all our departments, each of which is headed by highly skilled, experienced and fully qualified RICS chartered surveyors. Our various teams provide valuation, agency, advisory, management, capital investment, research and building consultancy services across all property types and sectors.

Our Q1 2018 report provides a summary of the Abu Dhabi residential market. Price and rent movement and upcoming supply of residential properties are provided through Property Monitor, a real estate intelligence platform, powered by Cavendish Maxwell.

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Q1 2018

Abu Dhabi Market Report

CONTENTS 4

Price Performance

6

Rent Performance

8

2018 Upcoming Supply

10 Methodology

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Q1 2018

Abu Dhabi Market Report

PRICE

PERFORMANCE

Marginal price declines continued in Abu Dhabi investment zones in Q1 2018

According to the Property Monitor Index, villa/townhouse prices in Al Raha Gardens, Al Reef and Saadiyat Islands continued to decline in Q1 2018, averaging a 12 month change of 2.1%. Downward pressure on sales prices has continued due to increasing supply, uncertainty regarding the employment market and readjusted housing allowances. This has also impacted transaction levels in investment zones.

However, stabilising oil prices and increasing government expenditure could improve market sentiment going forward. Additionally, the recently announced joint venture between master developers Aldar and Emaar is expected to improve property market prospects in the emirate.

Apartment Price Performance

-1.9

-0.3

-1.6

Al Reem Island

-0.4

-1.4

Al Ghadeer

Average price AED per sq ft

0.0

Al Raha Beach % change

0

-0.5%

-1.0%

-1.5%

-2.0%

-2.5%

-3.0%

-3.5%

-4.0%

-4.5%

-5.0%

-5.5%

-2.9

Saadiyat Beach Residences

-0.3 -0.8

Al Reef Downtown

0.0

0

QoQ% change Q4 2017 - Q1 2018

12 month % change Q1 2017 - Q1 2018

200

400

600

800

1,000 1,200 1,400 1,600 1,800

Source: Property Monitor

Q1 2018 Price

Villa/Townhouse Price Performance

Average price AED per sq ft

% change

0

-2.6

-0.5%

-1.0%

-1.5%

Saadiyat Beach Villas

-2.0%

Al Reef Villas

-2.5%

-3.0% Al Raha Gardens

-0.4

-2.0

-1.9

-0.3

0.0 0

QoQ% change Q4 2017 - Q1 2018

4

12 month % change Q1 2017 - Q1 2018

200

Q1 2018 Price

400

600

800

1,000 1,200 1,400 1,600 1,800

Source: Property Monitor

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Q1 2018

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Abu Dhabi Market Report

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Q1 2018

Abu Dhabi Market Report

RENT

PERFORMANCE

Apartment and villa/townhouse rents have continued to decline in Q1 2018, albeit at a slower pace than 2017.

According to the Property Monitor Index, villa/townhouse rents in Abu Dhabi investment zones have registered 12 month declines of 3.8% on average. Larger unit sizes continue to be pressured by rising vacancy levels. Tenants are choosing to move out of outlying areas of Abu Dhabi to central locations on the main island, taking advantage of the declining rents, the incentives offered by landlords and shorter commute time to key office locations. Tenants are also in a better position to negotiate terms with existing landlords or alternatively search for developments offering better amenities and building management along with attractive rents.

AED per annum

Apartment Rent Performance 200,000

0.0%

180,000

-0.5%

160,000

-1.0%

140,000

-1.5%

120,000

-2.0%

-2.4

-2.5%

100,000 -3.1

-3.1

80,000

-3.4

-3.0% -3.5%

60,000 -4.3

40,000

-4.0% -4.5%

20,000

-5.0%

0

Al Ghadeer

Studio Rent

1 BR Rent

Al Raha Beach 2 BR Rent

Al Reef Downtown

Al Reem Island

Saadiyat Beach Residences Source: Property Monitor

12 month % change Q1 2017 - Q1 2018

AED per annum

Villa/Townhouse Rent Performance 500,000

0.0%

450,000

-0.5%

400,000

-1.0%

350,000

-1.5%

300,000

-2.0%

250,000

-2.5%

200,000

-3.0%

-3.5 -3.8

150,000

-3.5% -4.1

100,000

-4.0% -4.5%

50,000

-5.0%

0 Al Raha Gardens 3 BR Rent

6

4 BR Rent

5 BR Rent

Al Reef 12 month % change Q1 2017 - Q1 2018

Saadiyat Beach Villas Source: Property Monitor

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Q1 2018

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Abu Dhabi Market Report

7

Q1 2018

Abu Dhabi Market Report

2018 UPCOMING

SUPPLY MAP

An estimated 730 residential units have been handed over across investment zones in Abu Dhabi during the first quarter.

67%

APARTMENTS

Saadiyat Island

33%

VILLAS/TOWNHOUSES

As of March 2018, approximately 6,458 units are scheduled for handover for the remainder of the year, though actual completions may vary. The key locations for upcoming supply this year are Reem Island and Yas Island, which have a total of over 4,600 units scheduled for completion this year.

Among the new launches this quarter was Aldar’s Reflection on Reem Island, which is expected to have 377 residential units (majority onebedroom apartments) and is expected to be completed by 2021. The recently announced joint venture between Emaar and Aldar will begin with the Saadiyat Grove on Saadiyat Island, which is expected to have 2,000 units of residential apartments, 400 units of serviced apartments, two hotels and 130,000 sqm of retail space. This project is scheduled to be completed by 2022.

Al Reem Island

PROPERTY MONITOR

SUPPLY TRACKER Supply scheduled to be completed by end of 2018 0 - 200

200 - 400

400 - 600

1,000 - 1,500

1,500 - 2,000

2,000+

600 - 1,000

Source: Property Monitor

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Q1 2018

Abu Dhabi Market Report

Al Raha Beach

Yas Island

Al Reef

Masdar City

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Q1 2018

Abu Dhabi Market Report

METHODOLOGY Sale prices and rents are derived from Property Monitor (www.propertymonitor. me), a real estate intelligence platform established by Cavendish Maxwell in 2014. Property Monitor provides real-time, market-wide transactional data and trends on the real estate market. Working with agencies, banks, developers and corporate investors, it provides deeper insight into real estate advisory, investment, and lending activities. The average sales price per sq ft is based on the Property Monitor Index which incorporates signed contracts, registered transactions, valuations and listings verified by Cavendish Maxwell’s market leading valuation department.

Supply projections for residential projects are based on the Property Monitor Supply Tracker which tracks supply in real time through regular tracking of construction projects, new launches and delays. This is achieved through site inspections as well as regular feedback from developers, contractors, Cavendish Maxwell’s project and building consultancy team and relevent government entities. All statistics are based on investment zones only.

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BANKS

Our documents and advice meet banking and audit criteria, proven by our presence on over 40 bank panels across the Middle East.

KEY

SERVICES

STRATEGIC CONSULTING AND RESEARCH

Market Research

Asset Management

Due Diligence for Land Acquisition

Property Data

Highest and Best Use Studies

Buyer Profiling

By working with our strategic consulting team, our clients immediately gain access to our knowledge base, technical expertise and highly skilled individuals, making us the development partner of choice. Our rigorous analysis, research and unique access to Property Monitor allows our team to produce reports and advice with a refreshingly different vision leading to creative and effective strategies.

Advisory Services

We have advised on schemes with a gross development value of over AED 3 billion in the last year. Our reports are used internally for business planning purposes and to satisfy the criteria of external financiers and auditors.

Feasibility Studies

Joint Venture Structuring

Site Analysis

Our name is trusted by all major banks across the UAE, supported by our presence on over 40 bank panels across the region.

Education Advisory and Valuation

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© Cavendish Maxwell 2018 | cavendishmaxwell.com

Q1 2018

Abu Dhabi Market Report

PEOPLE Jay Grant MSc IRRV (Hons)

Nigel Armstrong FMAAT

E: jay.grant@cavendishmaxwell.com

E: nigel.armstrong@cavendishmaxwell.com

Founder and Chairman

Miles Phillips BSc (Hons) MRICS Senior Partner

E: miles.phillips@cavendishmaxwell.com

Chief Executive Officer

Sofia Underabi MRICS AAPI Partner Head of Residential Valuation

E: sofia.underabi@cavendishmaxwell.com

Manika Dhama BA (Hons), MBA

Paul McCambridge

E: manika.dhama@cavendishmaxwell.com

E: paul.mccambridge@propertymonitor.ae

Senior Consultant Strategic Consulting and Research

Head of Sales Property Monitor

Paul Barker BSc (Hons) MRICS

Tim Hooper BA (Hons) MSc MRICS

E: paul.barker@cavendishmaxwell.com

E: timothy.hooper@cavendishmaxwell.com

Partner Head of Commercial Valuation

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Associate Commercial Valuation

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Abu Dhabi

Dubai

Muscat

605 West Tower, Abu Dhabi Mall Tourist Club Area P.O. Box 126609 Abu Dhabi United Arab Emirates

2205 Marina Plaza Dubai Marina P.O. Box 118624 Dubai United Arab Emirates

Villa 836, Way 3012 Al Sarooj P.O. Box 3438 Muscat Sultanate of Oman

T: +971 2 448 4677 E: info@cavendishmaxwell.com

T: +971 4 453 9525 E: info@cavendishmaxwell.com

T: +968 99 445 917 E: info@cavendishmaxwell.com

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