Q2 2019 UAE Property Market Report

About 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 quarterly market reports provide updates on price movement, rent and yield statistics, residential transactions, and upcoming supply of residential properties through Property Monitor, the real estate intelligence platform, powered by Cavendish Maxwell.

The reports also incorporate the Property Monitor Residential Survey, conducted among partner agents operating within the UAE. The survey provides an overview of how new enquiries, leasing activity and transactions, among other metrics, changed compared to the previous quarter.

Foreword Real estate market conditions remained challenging in Q2 2019, with prices continuing to decline, albeit at a slower pace in some communities. Supply remains the primary driver for price declines, and developers continue to offer attractive payment options with the aim of turning tenants into owner-occupiers. Further rental declines made it favourable for tenants to upgrade to larger units and more premium locations.

Governments continue to push forward with their reforms to stimulate the economy, with Abu Dhabi being the most recent emirate to introduce new freehold land and property ownership rules for expatriates.

Average sales prices and rents softened across most communities in Dubai in Q2 2019.

Furthermore, the price gap between apartments and villas/townhouses narrowed markedly. Handovers for the rest of 2019 will likely average between 10,000 and 13,000 units, following materialisation rates of previous years.

Office tenants continued to prefer ‘plug and play’ fully-fitted options that provide higher agility and flexibility, as capital expenditure flows reduce. In the hospitality sector, occupancy levels declined along with a fall in Average Daily Rates (ADRs), both of which led to a reduction in revenue per available room (RevPAR). Well-located community retail facilities with established catchments continued to showcase stable performance.

In addition to Dubai, Cavendish Maxwell’s second quarterly report for 2019 gives a holistic view of the UAE real estate market overall, with an overview of the residential, office, retail, hospitality and industrial sectors in Abu Dhabi and the Northern Emirates.

Contents 4

Residential Market Overview

30

Commercial Market Overview

34

Hospitality Market Overview

36

Industrial Market Overview

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Dubai

House Price Timeline In Q2 2019, average villa/townhouse prices remained stable at AED 1.8 million. However, the average apartment price 2019 declined 5% to AED 1.3 million from AED 1.4 million in Q1 2019.

SALES PRICE (AED) JANUARY 2008-JUNE 2019

4.0M

3.5M

AED

3.0M

UAE REAL ESTATE BOOM

LEHMAN BROTHERS COLLAPSE

EARLY SIGNS OF TROUBLE

NAKHEEL AND DWC ANNOUNCE PLANS FOR DEBT RESTRUCTURING

OIL PRICES PEAK TO $145/BARREL

OIL PRICES COLLAPSE TO $32/BARREL

BOND ISSUANCE

BY THE UAE CENTRAL BANK

ABU DHABI’S $10 BILLION LOAN TO DUBAI

REBOUND GROWTH FOR THE GENERAL MARKET - OIL PRICES ABOVE $100/BARREL

2.5M

2.0M

1.5M

Apartments

Villas / Townhouses

Note: The Dubai House Price Timeline from Property Monitor tracks residential property transactions from Dubai Land Department (off-plan and secondary market) to derive monthly and quarterly average transacted prices for apartments and villas/townhouses.

4

Q3-2013

Q2-2013

Q1-2013

Q4-2012

Q3-2012

Q2-2012

Q1-2012

Q4-2011

Q3-2011

Q2-2011

Q1-2011

Q4-2010

Q3-2010

Q2-2010

Q1-2010

Q4-2009

Q3-2009

Q2-2009

Q1-2009

Q4-2008

Q3-2008

Q2-2008

0.5M

Q1-2008

1.0M

UA E P R O P E RT Y MA R K E T RE PORT

R ES ID ENTIAL

Q2 2 0 1 9

Average sales prices and rents softened across most communities in Dubai in Q2 2019. However, over the 12-month period from Q2 2018, the average rate of price decline slowed. The price gap between apartments and villas/townhouses narrowed markedly. Average sales prices declined more than rents in Q2 2019, as was the case in the previous quarter.

The average trading price for villas/townhouses in Dubai declined from AED 2.4 million at the end of Q2 2018 to AED 1.82 million in Q2 2019, representing a drop of 24% in average prices. Apartment prices also moved towards the lower end of the range, averaging at AED 1.3 million in Q2 2019 from AED 1.4 million in Q1 2019.

Developers are aiming to attract investors through competitive value offerings and marketing campaigns. For instance, many developers are offering payment plans where a significant percentage of the purchase price is paid only upon completion and, in some cases, post-completion.

OIL PRICES COLLAPSE TO $47/BARREL

Q2-2019

Q1-2019

Q4-2018

Q3-2018

Q2-2018

Q1-2018

Q4-2017

Q3-2017

Q2-2017

Q4-2016

Q3-2016

Q2-2016

Q1-2017

AFFORDABLE HOUSING ARRIVES

BREXIT VOTE

Q1-2016

Q2-2015

Q1-2015

Q4-2014

Q4-2015

OIL PRICE DEREGULATION

RUSSIAN CURRENCY CRISIS

Q3-2014

Q1-2014

Q4-2013

Q2-2014

MARKET PEAK

CENTRAL BANK MORTAGE CAP

OPEC LIMITS CRUDE OUTPUT

Q3-2015

EXPO 2020 ANNOUNCEMENT

Source: Property Monitor

5

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Dubai

Apartment Price Performance According to the Property Monitor Index (PMI), average apartment prices declined by 15.1% over the 12-month period from Q2 2018 to Q2 2019.

The average rate of decline in certain areas increased year-on-year, with communities such as Jumeirah Lakes Towers (JLT), Dubai Sports City and Discovery Gardens registering noticeable declines of 16% and above, based on PMI data. Supply remains the primary driver for price declines and developers continue to offer attractive payment plans.

-3.9%

International City (Clusters)

-16.9% -7.3%

Discovery Gardens

-18.4% -3.7%

Jumeirah Village Circle

-13.2% -11.1%

IMPZ

-23.4% -2.9%

Uptown Motor City

-13.9% -5.1%

Dubai Silicon Oasis

-11.4%

-3.3%

Al Furjan

-13.3% -4%

Dubai Sports City

-16% -7.2%

Jumeirah Village Triangle

-24%

-6%

Jumeirah Lakes Towers

-16.6% -7.7%

The Greens

-17%

-4.8%

Business Bay

-14.1%

-4.5%

Dubai Marina

-13.3% -4.2%

The Views

-12.7% -2.6%

Jumeirah Beach Residence

-13.1% -3.7%

DIFC

-13.1%

-3.8%

Palm Jumeirah

-12.7% -5%

Downtown Burj Khalifa

-15.9%

0

-1

-2

-3

-4

-5

-6

-7

-8

-9 -10 -11 -12 -13 -14 -15 -16 -17 -18 -19 -20 -21 -22 % change

Quarterly Q1 2019 - Q2 2019

Source: Property Monitor

6

Yearly Q2 2018 - Q2 2019

-23

-24

UA E P R O P E RT Y MA R K E T RE PORT

R ES ID ENTIAL

Q2 2 0 1 9

Business Bay AED 1,259/Sq Ft

DIFC AED 1,544/Sq Ft

Downtown Burj Khalifa AED 1,996/Sq Ft

International City (Clusters) AED 495/Sq Ft

Dubai Silicon Oasis AED 709/Sq Ft

Palm Jumeirah AED 1,892/Sq Ft

Jumeirah Beach Residence AED 1,410/Sq Ft

Jumeirah Lakes Towers AED 996/Sq Ft

The Greens AED 1,089/Sq Ft

The Views

Jumeirah Village Circle

AED 1,356/Sq Ft

AED 704/Sq Ft

Dubai Marina Uptown Motor City

AED 1,407/Sq Ft

AED 724/Sq Ft

Dubai Sports City Discovery Gardens AED 658/Sq Ft

IMPZ

AED 795/Sq Ft

AED 640/Sq Ft

Al Furjan AED 754/Sq Ft

7

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Dubai

Villa/Townhouse Price Performance According to the PMI, average villa/townhouse prices declined 14.7% over the 12-month period from Q2 2018 to Q2 2019.

The average rate of decline in villa/townhouse prices across key communities increased year-on-year, with communities such as Jumeirah Islands, Dubai Silicon Oasis and Arabian Ranches witnessing a decline in the range of 15.5 to 16.9%.

-3.8%

Al Furjan Villas

-13.7%

-4.8%

Cedre Villas Silicon Oasis

-15.7% -4.7%

Jumeirah Village Triangle

-11.4% -1.4%

Green Community Motor City

-10.4% -3.8%

The Springs

-12.5% -3.6%

Jumeirah Park

-12.5% -4.9%

Arabian Ranches

-16.9% -12.2%

Victory Heights

-21.4% -7.9%

The Meadows

-23.4% -4%

The Lakes

-14.2% -4.5%

Jumeirah Golf Estates

-8.3%

-4%

Jumeirah Islands

-15.8%

-4.4%

The Fronds Garden Homes Palm Jumeirah

-14.3%

0

-1

-2

-3

-4

-5

-6

-7

-8

-9 -10 -11 -12 -13 -14 -15 -16 -17 -18 -19 -20 -21 -22

% change

Quarterly Q1 2019 - Q2 2019

Source: Property Monitor

8

Yearly Q2 2018 - Q2 2019

-23

-24

%

UA E P R O P E RT Y MA R K E T RE PORT

R ES ID ENTIAL

Q2 2 0 1 9

The Fronds Garden Homes Palm Jumeirah AED 2,258/Sq Ft

Cedre Villas Silicon Oasis AED 760/Sq Ft

Jumeirah Park AED 919/Sq Ft

Jumeirah Islands AED 1,238/Sq Ft

The Meadows AED 1,013/Sq Ft

The Lakes AED 1,163/Sq Ft

The Springs AED 894/Sq Ft

Arabian Ranches AED 980/Sq Ft

Jumeirah Village Triangle

Green Community Motor City

AED 815/Sq Ft

AED 870/Sq Ft

Victory Heights AED 904/Sq Ft

Al Furjan Villas

Jumeirah Golf Estates AED 1,100/Sq Ft

AED 714/Sq Ft

9

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Dubai

Rent Performance Rental declines for apartments in Dubai averaged 12.5%, whilst villas/ townhouses registered a 12.6% fall over the 12-month period from Q2 2018 to Q2 2019.

In the communities of Motor City, The Greens, JLT and Discovery Gardens, downward pressure on apartment rents was more pronounced, with declines averaging 14.6% year-on-year. Meanwhile, villa/townhouse communities including The Springs, Victory Heights, Arabian Ranches and Al Furjan registered an average decline of 11% in rents.

With new supply nearing completion, and an expected increase in handovers this year in both freehold and leasehold communities across Dubai, the upcoming quarters are expected to continue to exert downward pressure on rents. However, the rate of decline in rental prices is slowing down.

-15.9 The Greens AED 52,900 AED 60,040

Annual rent by bedroom

AED 95,550

* Data as of June 2019 APARTMENT Studio

-15.5

VILLA/TOWNHOUSE 3 BR

-10.4 Dubai Marina

1 BR

4 BR

AED 61,950 AED 85,560

2 BR

5 BR

AED 123,900

12-month % change

12-month % change

-13.3 JLT AED 47,750

The Views

AED 65,542

AED 59,220

AED 91,000

AED 78,200 AED 103,350

-6

-8.9

JBR

The Lakes

AED 63,700 AED 108,560

AED 162,500 AED 256,250

AED 117,600

AED 351,000

-8.8 The Meadows AED 163,350 AED 196,000 AED 240,350

-8.7 -8.7

Jumeirah Islands AED 240,448

The Springs

AED 326,400

-8.8 -9.5

AED 137,760 AED 144,200

Jumeirah Park AED 159,680

Discovery Gardens

AED 200,810

AED 34,760 AED 48,250

AED220,800

-5.2 Jumeirah Golf Estates

-9.4 Al Furjan Villas AED 128,865 AED 165,000

Source: Property Monitor

10

AED 222,300 AED 237,500 AED 289,200

UA E P R O P E RT Y MA R K E T RE PORT

-11.7 Downtown Burj Khalifa

R ES ID ENTIAL

Q2 2 0 1 9

AED 66,505 AED 95,325 AED 136,178

-10.8 -12.3 Business Bay AED 63,538

DIFC

-13.3

AED 65,500 AED 90,820 AED 153,900

International City (Clusters) AED 24,745

AED 78,330 AED 106,320

-16.5

-14.2 Dubai Sports City AED 40,500 AED 60,760 AED 89,900

AED 35,550 AED 52,800

-12.8

Motor City

Arabian Ranches

AED 44,800

AED 155,000

AED 61,440 AED 93,960

AED 264,000

AED 209,000

NUMBER OF RENTAL CHEQUES FOR APARTMENTS AND VILLAS/TOWNHOUSES 0.7% 8 cheques

3.9% 12 cheques

4.9% 6 cheques

-11.8 Victory Heights AED 153,700 AED 244,400

0.2% 5 cheques

38.7% 1 cheque

26.5% 4 cheques 6.5% 3 cheques

18.5% 2 cheques

Jumeirah Golf Estate

11

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Dubai

2019 Upcoming Supply According to Property Monitor, over 1,700 apartments and 1,250 villas/ townhouses were handed over in Dubai during Q2 2019.

Most of the upcoming supply in 2019 is concentrated in a few communities – Akoya Oxygen, Jumeirah Village Circle, Mohammed Bin Rashid City, Town Square and Dubai South. Villas make up the majority of the upcoming supply, at approximately 60%.

Actual materialisation rates in 2019 are expected to match previous years at 40 – 50%, with handovers averaging between 10,000 and 13,000 units, for the rest of 2019.

APARTMENTS

40%

VILLAS/TOWNHOUSES

60%

SUPPLY SCHEDULED TO BE COMPLETED BY END OF 2019 <1,500 1,501 - 2,500

Dubai Marina

Al Furjan

Dubai South Source: Property Monitor

12

UA E P R O P E RT Y MA R K E T RE PORT

R ES ID ENTIAL

Q2 2 0 1 9

Downtown Burj Khalifa Business Bay

International City

Dubai Silicon Oasis Mohammed Bin Rashid City

Dubailand

Jumeirah Village Circle

Dubai Sports City

TownSquare

Akoya Oxygen

13

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Dubai

Transaction Overview Off-plan transfers continued to dominate in Q2 2019, accounting for more than 52.2% of total transfers. The total number of transfers in this period was 9,092, for villas/townhouses and apartments overall.

Mohammed Bin Rashid (MBR) City, Downtown Burj Khalifa and The Lagoons (Creek Harbour) were the most sought-after locations, displaying high off-plan apartment transfers in Q2 2019. Whilst off-plan transfers continue to dominate, the volume of transfers for under-construction apartments declined by 7.6% compared to Q2 2018.

For villas/townhouses, the total volume of secondary transactions declined by 3.4% compared to Q2 2018.

Secondary market transfers continued to outpace off-plan transactions during Q2 2019 for villas/townhouses.

14

96

66

58

129

94

85

Arabian Ranches 2

Emirates Living

Arabian Ranches

Mohammed Bin Rashid City

200

150

100

50

Number of transfers

306 290

Jumeirah Village Circle

300

200

100

0

OFF-PLAN

250 250 247 199 192 Business Bay

400

Downtown Burj Khalifa

500

Jumeirah Village Circle

800

International City

600

Number of transfers

700

Dubai Marina

431

Business Bay

900

65

64

Arabian Ranches 2

107

Mohammed Bin Rashid City

635

The Lagoons (Creek Harbour)

869

Downtown Burj Khalifa

Number of transfers

OFF-PLAN

Jumeirah Village Circle

210

Town Square

0

Villa Nova

Mohammed Bin Rashid City

0

Dubai South (Dubai World Central)

Number of transfers

Q2 2 0 1 9

Top 5 locations for apartment transfers in Q2 2019

R ES ID ENTIAL

UA E P R O P E RT Y MA R K E T RE PORT

SECONDARY MARKET

1,000

300

250

200

150

100 50 160

Top 5 locations for villa/townhouse transfers Q2 2019 SECONDARY MARKET

140

120

100

80

60

40

20

0

Source: Property Monitor

15

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Survey Results

PROPERTY MONITOR RESIDENTIAL SURVEY â&#x20AC;&#x201C; Q2 2019

PREDICTIONS

REALITY

The majority of agents surveyed predicted apartment and villa/ townhouse prices would decrease by up to 5%.

For apartment and villa/townhouse rents, the majority of agents surveyed predicted that rates would decrease by up to 5%.

New buyer enquiries, seller instructions and agreed sales were predicted to increase by the majority of agents surveyed.

16

Apartment and villa/townhouse prices declined by 4.8% on average in Q2 2019, with a 12-month decline of 14.9% on average.

vs

Apartment and villa/townhouse rents declined by 2.7% on average in Q2 2019, with a 12-month decline of 10.9% on average.

According to data from real estate agencies, transaction levels in Q2 2019 were lower than Q1 2019.

UA E P R O P E RT Y MA R K E T RE PORT

LOOKING FORWARD â&#x20AC;&#x201C; Q3 2019 Q3 2019 PRICE OUTLOOK Decrease by more than 5%

Decrease by up to 5%

Increase by more than 5%

Increase by up to 5%

Remain the same

APARTMENTS

VILLAS/TOWNHOUSES

% of agents who predicted apartment prices would:

% of agents who predicted villa/townhouse prices would:

23.8%

23.8%

23.8%

R ES ID ENTIAL

Q2 2 0 1 9

25.4%

4.8%

4.8%

1.6%

1.6%

44.4%

46%

Q3 2019 RENT OUTLOOK Decrease by more than 5%

Decrease by up to 5%

Increase by more than 5%

Increase by up to 5%

Remain the same

APARTMENTS

VILLAS/TOWNHOUSES

% of agents who predicted apartment rents would:

% of agents who predicted villa/townhouse rents would:

20.6%

17.4% 28.6%

27%

3.2% 1.6%

1.6% 1.6% 50.8%

47.6%

Q3 2019 TRANSACTION OUTLOOK Decrease

Increase

Remain the same

NEW BUYER ENQUIRES

NEW SELLER INSTRUCTIONS

AGREED SALES

% of agents who predicted new buyer enquiries would:

% of agents who predicted new seller instructions would:

% of agents who predicted agreed sales would:

23%

30.6%

26.2%

21.5%

14%

63%

52.3%

15.4%

54%

Source: Property Monitor

17

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Abu Dhabi

Price Performance Average sales prices declined in Abu Dhabiâ&#x20AC;&#x2122;s major investment zones by 12.6% for apartments from Q2 2018 to Q2 2019. Villa/townhouse prices registered a similar average decline of 12.1% over the same period.

18

UA E P R O P E RT Y MA R K E T RE PORT

R ES ID ENTIAL

Q2 2 0 1 9

As of June 2019, prices in Al Reem Island, Al Raha Beach and Saadiyat Beach Residences declined by 13.4% on average for apartments, according to prices tracked by Property Monitor. The quarterly change from Q1 2019 to Q2 2019 was 3.9%. In the case of villas, prices also declined across all investment zones.

With the introduction of the new freehold law which allows foreign nationals to own properties, the emirateâ&#x20AC;&#x2122;s real estate sector, and the economy as a whole, is expected to receive a boost. Previously, Abu Dhabi only granted a leasehold of 99 years to foreign property owners. The move is expected to bridge the gap between the Abu Dhabi and Dubai real estate markets, as Dubai already allows foreign nationals to buy property.

In the first six months of 2019, Abu Dhabi registered AED 31 billion worth of property transactions, according to first-of-its-kind report shared by the Department of Urban Planning and Municipalities (DPM), with the aim of increasing the level of transparency for investors and businesses.

APARTMENT PRICE PERFORMANCE

Al Raha Beach % change

-3.6%

-11.1%

-3.3%

-11.7%

Al Reem Island

-14%

797

-3.9%

-13.2%

-16%

1,040

-4.4%

-15.2%

Al Reef Downtown

1,237

-4%

-11.9%

Al Ghadeer

1,375

-12%

-10%

-8%

-6%

AED/sq ft

Saadiyat Beach Residences

714

-4%

Yearly Q2 2018 - Q2 2019

-2%

200

0

400

600

800

Quarterly Q1 2019 - Q2 2019

1000

1200

1400

1600

Average Price Per Sq Ft

Source: Property Monitor

VILLA/TOWNHOUSE PRICE PERFORMANCE

-3.9%

-12.1%

Al Reef Villas

818

-0.4%

-11.7%

Saadiyat Beach Villas

-4%

-12.8%

-14%

628

-12%

-10%

-8%

Yearly Q2 2018 - Q2 2019

-6%

-4%

1,423

-2%

0

200

Quarterly Q1 2019 - Q2 2019

400

600

800

1000

1200

1400

AED/sq ft

% change

Al Raha Gardens

1600

Average Price Per Sq Ft

Source: Property Monitor

19

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Abu Dhabi

Rent Performance Rents in Abu Dhabi continued to fall in Q2 2019, for both apartments and villas/townhouses.

The average annual decline was 11.9% for the 12-month period from Q2 2018 to Q2 2019.

Villas/townhouses in Saadiyat Beach Villas and Al Raha Beach displayed a steep decline in rents, averaging 12.4% annually. Over the same period, rents for apartments in Al Reem Island also declined by 15% on average. Tenants are expected to benefit from a wider choice at lower rates, with upgrades to larger homes also possible.

Sales prices are expected to soften further in H2 2019, as fresh supply enters the market. Some properties which were previously delayed are expected to be delivered in H2 2019.

APARTMENT RENT PERFORMANCE

% change

Al Raha Beach

114,000

-10.6%

Al Reef Downtown Al Reem Island

55,657 42,920 28,828

-11.4%

77,805

-10.2%

-5% -2.7%

-15%

38,880

-4.7%

Saadiyat Beach Residences

50,925

82,367 79,869

72,150

-14%

-12%

-10%

Studio

92,607

156,870

-10.4%

-16%

Rent (AED/annum)

Al Ghadeer

98,000

-8%

-6%

1 BR

-4%

-2%

-0%

0

50,000

100,000

150,000

Yearly Q2 2018 - Q2 2019

2 BR

Source: Property Monitor

% change

Al Raha Gardens

378,120 338,720 316,800

-13.2%

Saadiyat Beach -14%

-13%

3 BR

20

135.388 128,550 101,081

-11.6%

Al Reef Villas

Source: Property Monitor

198,623 166,056 133,575

-12.5%

-12%

-11%

4 BR

-10%

5 BR

0

100,000

200,000

300,000

Yearly Q2 2018 - Q2 2019

400,000

Rent (AED/annum)

VILLA/TOWNHOUSE RENT PERFORMANCE

200,000

UA E P R O P E RT Y MA R K E T RE PORT

Abu Dhabi

R ES ID ENTIAL

Q2 2 0 1 9

2019 Upcoming Supply According to Property Monitor, over 500 residential units were handed over in Abu Dhabi during Q2 2019 alone.

Upcoming supply for the rest of the year is spread across Abu Dhabi’s investment zones and mainland. More than 6,400 residential units are expected to be delivered in H2 2019, of which, 3,000 apartments are to be handed over on Al Reem Island, Yas Island, Saadiyat Island and Abu Dhabi City.

Supply scheduled to be completed in H2 2019

APARTMENTS

87%

<100 100 - 500

VILLAS/TOWNHOUSES

501 - 1,000

13%

1,000+

Source: Property Monitor

Saadiyat Island

Al Raha Beach

Al Maryah Island Yas Island

Al Reem Island

Abu Dhabi City

Khalifa City

21

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Northern Emirates

Residential Market Overview The Northern Emirates of Sharjah, Ajman and Ras Al Khaimah remain affordable alternatives for buying and renting of properties in the UAE. Reputed builders such as Eagle Hills and Emaar are developing master-plan projects in these emirates.

With prices and rents in neighbouring Dubai softening, residential real estate in Sharjah and Ajman followed a similar trend. Rental values declined across all residential segments, with upscale properties witnessing corrections as well. The current market dynamics in the Northern Emirates have made it more affordable for residents to upgrade to higher quality properties and larger unit sizes.

AVERAGE RENTAL RATES Q2 2019

Rent (AED in thousands/annum)

80

60

40

40 32

30 21 20

26 24

20

18

22

17

0 Studio

1 BR

Sharjah

Ajman

Source: Cavendish Maxwell

22

Source: Propertymonitor.

Ras Al Khaimah

UA E P R O P E RT Y MA R K E T RE PORT

R ES ID ENTIAL

Q2 2 0 1 9

Similar to Dubai and Abu Dhabi, governments in the Northern Emirates are introducing larger budgets with diversification strategies to stimulate their economies and boost investment. These measures are expected to translate into employment and business growth, and as a result, increased transaction activity.

In 2019, the UAE allocated AED 11 billion to improve of roads and infrastructure in the Northern Emirates. The restoration of Al Ittihad Street, the oldest arterial road linking the emirates to Dubai, is expected to improve traffic flow, attracting those seeking affordable properties.

65

57

35

50

45

45

44

34

32 25

2 BR

Fujairah

3 BR

Umm Al Quwain

23

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Sharjah

Residential Market Overview Despite proactive government initiatives and increased spending, rental rates are expected to face continued pressure for the rest of 2019.

Average apartment rents over the quarter declined by 5%, whilst villa rents on average declined by 3% over the same period. In popular locations such as Al Khan, Al Majaz and Abu Shagara, annual rents for studios start at approximately AED 16,000, and go up to AED 85,000 for three-bedroom apartments. Rents in communities in Al Heerah and Wasit start at approximately AED 85,000 fo four-bedroom villas, going up to AED 200,000 for six-bedroom villas.

Upcoming residential supply includes master-planned communities such as Maryam Island, Al Mamsha, Al Zahia, Al Ajada and Sharjah Waterfront.

Rising vacancy levels have led to property owners actively offering discounted rentals to retain and attract tenants. In addition, they are also willing to absorb fees and provide rent-free periods as part of the incentives offered.

AVERAGE RENTAL RATES (AED) Q2 2019

Prime Apartments Studio 20,000

1 BR

2 BR

27,000

31,000

Prime Apartments

3 BR

Studio

1 BR

2 BR

3 BR

51,000

26,000

39,000

60,000

73,000

Secondary Apartments

Secondary Apartments Studio

1 BR

2 BR

Studio

1 BR

2 BR

3 BR

16,000

21,000

28,000

18,000

21,000

28,000

37,000

Source : Property listings as of June 2019

24

Al Nahda

UA E P R O P E RT Y MA R K E T RE PORT

R ES ID ENTIAL

Q2 2 0 1 9

Al Azra

Rolla Wasit Suburb Abu Shagara Al Majaz Al Khan

Al Rahmaniya

Al Taawun Al Nahda

Al Jurainah

Hoshi

Al Suyoh

Al Tai

Prime Villas 4 BR 105,000

5 BR

6 BR

135,000

158,000

Prime Villas 4 BR 103,000

5 BR 117,000

Secondary Villas

6 BR 135,000 Secondary Villas

4 BR

5 BR

6 BR

4 BR

95,000

123,000

128,000

90,000

5 BR 114,000

6 BR 128,000

25

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Ajman

Residential Market Overview Real estate in Ajman is a feasible option for local and expat investors due to lower rent and sale prices than neighbouring Sharjah and Dubai.

The Ajman residential market is mainly dominated by villas, which are the preference for larger families.

However, apartments are also available across multiple price points based on resident preferences.

Annual apartment rents in Ajman range from AED 20,000 per annum for studios, to AED 50,000 for threebedroom units. Studio sizes range from 300 to 900 sq ft, one-bedroom apartment sizes range from 550 to 1,900 sq ft and two-bedroom apartment sizes range from 800 to 2,500 sq ft.

With more upcoming supply expected to enter Meshairef, Emirates City and Al Butain, further downward pressure on rents is expected. Al Zohra, which is a mixed-use development planned for completion in 2023, has been delayed. Once complete, it is slated to accommodate 50,000 people.

Al Jurf

Al Bustan

Rashidiya Al Rawdha

Al Naemiya

AVERAGE RENTAL RATES (AED) Q2 2019 Secondary Apartments

Prime Apartments Studio

1 BR

2 BR

3 BR

Studio

1 BR

2 BR

3 BR

20,000

25,000

35,000

45,000

16,000

18,000

30,000

40,000

Source : Property listings as of June 2019

26

UA E P R O P E RT Y MA R K E T RE PORT

Umm Al Quwain

R ES ID ENTIAL

Q2 2 0 1 9

Residential Market Overview As of Q2 2019, apartment rental rates remained stable compared to Q1 2019, with a marginal average decline of 1%. The apartment rental rate in Umm Al Quwain ranged from AED 16,000 per annum for studios to AED 32,000 per annum for three-bedroom units.

The expansion of the Umm Al Quwain Free Trade Zone was initiated this year, with completion expected by Q1 2020. The new free zone will be spread over an area of two million sq m, with plans to develop an industrial smart city with residential, warehouses, offices and leisure facilities.

Fujairah

Residential Market Overview As of Q2 2019, rents in Fujairah declined 2% compared to Q1 2019. Rents in the emirate range from AED 18,000 per annum for studios to AED 50,000 per annum for three-bedroom units.

More than 700 apartments and 1,200 villas are currently under construction in Fujairah, and are expected to be handed over in H2 2019. Major upcoming residential projects include residential communities in Al Hayl, Eagle Hills and Fujairah Investment Towers.

As of Q2 2019, a wide range of development projects are underway in the emirate as it seeks to diversify its economy. These projects include the expansion of Fujairah Airport to boost tourism, and the development of Sheikh Khalifa Hospital to attract medical tourism. The expansion into other sectors will likely increase employment, and subsequently, the demand for housing.

27

Q2 2 0 1 9

Ras Al Khaimah

Residential Market Overview

28

UA E P R O P E RT Y MA R K E T RE PORT

UA E P R O P E RT Y MA R K E T RE PORT

Annual rents in Ras Al Khaimahâ&#x20AC;&#x2122;s newer stock, including Al Hamra Village and Mina Al Arab, declined marginally by 1% on average in Q2 2019 compared to Q1 2019. Rents in older stock remained relatively stable.

R ES ID ENTIAL

Q2 2 0 1 9

As of Q2 2019, Al Hamra Village continued to be a popular choice for tenants and investors, and apartments maintained occupancy of over 75%. Average rents ranged from AED 32,000 per annum for studios to AED 70,000 per annum for three-bedroom units. On the other hand, apartment sales prices at Al Hamra Village and Mina Al Arab ranged from AED 400 to AED 700 per sq ft.

Major upcoming residential projects in Mina Al Arab include Northbay Residences and Gateway Residence, which are a part of Hayat Island. Gateway Residence is expected to be delivered by Q4 2019, whilst Northbay Residences is expected to be complete by 2021. Apartment sales prices within these projects start from AED 670,000 for one-bedroom units.

New developments in Ras Al Khaimah offer a unit mix that is aligned with current market demand. However, the market is price-sensitive and fluctuations in rental rates are likely to affect the absorption rates of these new developments.

Al Marjan Island Al Hamra Village Mina Al Arab

Julphar Towers Al Seer Al Uraibi

AVERAGE RENTAL RATES (AED) Q2 2019

Prime Apartments

Secondary Apartments

Studio

1 BR

2 BR

3 BR

Studio

1 BR

2 BR

3 BR

32,000

41,000

51,000

70,000

18,000

23,000

33,000

38,000

Prime Apartments Studio

1 BR

2 BR

3 BR

27,000

37,000

53,000

65,000

Source : Property listings as of June 2019

29

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Dubai

Office Market Overview In H1 2019, tenants continued to prefer â&#x20AC;&#x2DC;plug and playâ&#x20AC;&#x2122; fully-fitted options, providing higher agility and flexibility to suit a variety of business needs. Many occupiers have consolidated their portfolios by opting for purpose-built or competitively-priced spaces. Landlords are now catering to this preference by converting shell and core offices into fully-fitted and furnished units.

The weakening demand for office space in the face of oversupply in the market is resulting in less office space being constructed. Landlords are offering incentives such as longer rent-free periods and flexible payment terms, and are also absorbing service charges in some areas to attract and retain tenants.

Investors continue to display interest in well-located Grade A assets with credit-worthy tenants perceived as low-risk.

During Q2 2019, vacancy rates in the commercial sector varied across Dubai ranging from 5% in Dubai Design District to 54% in Business Bay. Meanwhile, core buildings in Dubai International Financial Centrre (DIFC) continued to outperform the overall market, achieving an occupancy rate of approximately 90%.

Upcoming supply in the central business district with the expansion of DIFC 2.0, which is expected to offer 6.4 million sq ft of office space, will likely continue to impact vacancy levels in non-core areas, and subsequently, rents.

OFFICE RENTS PERFORMANCE (AED/SQ FT) 125

-5%

150

70

-1%

Mid-quality

Affordable

95

50

-4%

-10%

-8%

-6%

-4%

65

-2%

0

20

Quarterly Q1 2019 - Q2 2019

40

60

80

Shell and Core

100

120

DUBAI OFFICE ENQUIRES BY SECTOR H1 2019

DUBAI OFFICE ENQUIRES BY SIZE (SQ FT) - H1 2019

0-1,000 15%

Financial Services 33%

7%

25%

Technologies Construction-related

10,000+

Healthcare, Beauty and Pharmaceutical 18%

Retail Logistics and Distribution

Source : Cavendish Maxwell

30

1,001 - 4,999 5,000 - 9,999

11%

Hospitality, Leisure and Entertainment

12%

160

Fitted

Professional Services

4%

6%

14%

140

The above rates are inclusive of service charge and are based on signed rental contracts.

Source: Cavendish Maxwell

6%

Rent (AED/sq ft)

% change

Prime Quality

49%

UA E P R O P E RT Y MA R K E T RE PORT

Dubai

CO M M ER C IAL

Q2 2 0 1 9

Retail Market Overview Retail sector expansion in Dubai is supported by steady tourism growth and transport infrastructure development.

As of Q2 2019, despite declining rents, occupancy rates also fell. However, compared to the wider retail market, well-located community retail facilities with established catchments, continued to showcase stable performance.

To retain and attract tenants, developers are becoming increasingly flexible on lease terms and offering incentives such as service charge waivers, revenue share agreements and capital expenditure contributions.

Dubaiâ&#x20AC;&#x2122;s retail sector is also being impacted by the influx of e-commerce companies, which is driven by the growing adoption of smartphones, internet penetration and other digitised services. To remain relevant and attract customers to brick and mortar stores, retailers are adopting aggressive promotional campaigns and offering discounts to tenants.

RETAIL RENTAL RATES Q2 2019 (AED/SQ FT) Retail Type

Average Rental Rate

High Street/Destination Retail

210 - 650

Central Business District

200 - 400

Community Retail

60 - 220

Source: Cavendish Maxwell Rates vary by size, location, access and target tenants (for instance, Supermarket versus F&B concept). Some retail units may be offered on a rent + turnover percentage.

31

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Abu Dhabi

Office Market Overview As of Q2 2019, subdued demand, reduced business growth and corporate restructuring placed downward pressure on rents in the office space. Rents for prime and mid-quality buildings declined by 2% on average in Q2 2019.

There was limited interest from the hydrocarbon sector, some of the largest office tenants in Abu Dhabi, putting further pressure on rents.

A rising number of public and quasi-government organisations also responded to market conditions over the quarter by downsizing or consolidating their operations. Corporates are demanding lease flexibility both at renewal and new lease signing stages, citing the economic uncertainty within the region as the reason.

Rising vacancy rates and declining rents created an opportunity for tenants to relocate from locations they may have previously been priced out of, whilst also being able to negotiate rates with landlords. Tenants are choosing to upgrade to Grade A stock from Grade B and C specifications. As a result, landlords have become more flexible by providing extended rent-free periods, parking provisions, and payments towards fit-out costs, among others.

Abu Dhabi’s new freehold law introduced in Q2 2019, allowing foreign investors to buy real estate in 15 designated investment zones, is expected to improve market sentiment in the medium term.

OFFICE RENT PERFORMANCE (AED/SQ FT)

160

Rent (AED/sq ft)

% change

Prime Quality 70

Mid Quality

80

50

Affordable

75

0

20

40

60

Shell and Core

80

100

120

140

160

Fitted

Source : Cavendish Maxwell

Retail Market Overview As of Q2 2019, Abu Dhabi’s retail market remained subdued, with slowing retail spending and the rise of ecommerce posing challenges.

Retail rents continued to decline, with a reported increase in vacancy levels. Many mall operators attempted to respond by offering numerous leasing incentives to attract and retain retailers.

New supply in Q2 2019 included My City Centre Masdar, Majid Al Futtaim’s first shopping mall in Abu Dhabi, with 200,000 sq ft of gross leasable area across 70 stores. In addition, the refurbished Lulu Shopping Centre opened at Madinat Zayed with a built up area of 323,000 sq ft and 75 stores.

To improve retail market conditions, the government launched Retail Abu Dhabi (RAD) in Q2 2019, an annual sales event in major malls such as Abu Dhabi Mall, Marina Mall, Dalma Mall, Raha Mall and Mushrif Mall, to boost footfall and stimulate demand.

32

UA E P R O P E RT Y MA R K E T RE PORT

Northern Emirates

CO M M ER C IAL

Q2 2 0 1 9

Office Market Overview

Sharjah benefits from a competitive advantage over other emirates due to its low-cost of living and doing business. However, considering Dubaiâ&#x20AC;&#x2122;s over-supply and rental climate, rents in Sharjah, and neighbouring Ajman, came under pressure. As of Q2 2019, the office sector continued to display little momentum, owing to a bearish market sentiment and regional uncertainties, which affected potential tenant upgrades and newcomers to the market.

As of Q2 2019, limited demand for office space in Sharjah led to average rental declines of 3% over the quarter, and 6% over the last 12 months.

Noticeable declines were witnessed in the Corniche and industrial areas compared to the same period last year.

Dubai Investments announced that the mixed-use Fujairah Business Centre project is on track to be delivered by Q2 2020. In Umm Al Quwain, construction began on the expansion of the Umm Al Quwain Free Trade Zone, amid rising demand from new tenants.

SHARJAH OFFICE RENTAL RATES (AED/SQ FT)

28 42

Corniche Area (Al Khan, Al Majaz 3)

Rent (AED/sq ft)

% change

Al Taawun Road

41 53

Abu Shagara/Al Qasemiah

34 50

26

Industrial Area

35

0

10

20

Shell and Core

30

40

50

60

Fitted

Source : Cavendish Maxwell

Retail Market Overview In H1 2019, Oasis mall was completed and handed over in Sharjah, having a total area of 650,000 sq ft and over 45 retail stores. In addition, new F&B outlets opened in the Corniche area and at Al Majaz Waterfront.

At the beginning of 2019, the Ajman Municipality and Planning Department launched a new mixed-use development called Ajman Square.

The development includes cafes and restaurants, in addition to walking tracks and open spaces, offering plenty of recreational options to visitors. In Q2 2019, Spinneys opened its second store in the Al Jurf community, spanning over 14,000 sq ft.

The Mall of UAQ was completed and handed over in Al Maqtaa, Umm Al Quwain in Q2 2019. The 100,000 sq ft Lulu Hypermarket is an anchor tenant in the mall.

33

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Dubai

Hospitality Market Overview According to data released by STR Global, Dubai hotel room occupancy levels declined from 80.8% in the January to May 2018 period to 76.5% in the same period in 2019, a year-on-year decline of 5.3%. During the same period, Average Daily Rates (ADRs) fell 12% from AED 722 to AED 634. Because of declines in both occupancy and ADR, Dubai has seen a 16.8% reduction in revenue per available room (RevPAR). STR Global data also showed that in H1 2019 there were 3,841 rooms added to the total inventory. 12,472 rooms are expected to be delivered over the remainder of 2019, with approximately 49% of the additional inventory belonging to the upper-upscale sector.

In H2 2019, with the anticipated addition of new supply amid a period of slowing demand, ADRs are expected to come under increased pressure, along with further reductions in occupancy levels.

OCCUPANCY AND ADR 82%

600

81%

580

700

80%

680

79%

660

78%

640

77%

620 600

76.5% 722

634

2018

2019

ADR

82% 81%

80.8%

560

80%

540

79%

520

78%

500

76%

480

75%

460

77%

76.5% 583

485

2018

2019

Rev PAR

OCC %

Occupancy

80.8%

Rate (AED)

Rate (AED)

720

Occupancy

740

OCCUPANCY AND RevPAR (AED)

76% 75%

OCC %

Data as of YTD May

Source: STR Global

Abu Dhabi

Hospitality Market Overview According to data from STR Global, hotel room occupancy rates in Abu Dhabi City declined from 79.4% in the January to May 2018 period to 78.5% in the same period in 2019, a marginal drop of 1.1%. Hotel RevPAR within the city increased during the period, from AED 233 to AED 253, representing an increase of 8.5%. The increase in RevPAR is mainly attributed to events such as the Special Olympics held in March 2019.

As of H1 2019, the Department of Culture and Tourism (DCT) has reduced tourism fees from 6% to 3.5%, municipal fees from 4% to 2% and municipality hotel room fees per night from AED 15 to AED 10. This reduction is expected to increase the emirateâ&#x20AC;&#x2122;s competitiveness and visitor numbers. In terms of upcoming supply, 560 hotel rooms are due to be added to hospitality inventory by the end of 2019.

80%

300

79.4% 78.5%

280 260

322

293

2018

2019

Data as of YTD May

OCC %

79% 78% 77%

260 250 240

81%

78.5%

230 220

80%

79.4%

233

253

2018

2019

Rev PAR

79% 78%

Occupancy

81%

320

Rate (AED)

340

ADR

34

OCCUPANCY RevPAR (AED)

Occupancy

Rate (AED)

OCCUPANCY % AND ADR

77%

OCC % Source: STR Global

UA E P R O P E RT Y MA R K E T RE PORT

Northern Emirates

HOS P ITAL ITY

Q2 2 0 1 9

Hospitality Market Overview The addition of new tourist attractions and hotel projects in the Northern Emirates is expected to aid growth in the hospitality sector.

According to the Sharjah Investment and Development Authority, over 4,000 hotel rooms are expected to be added to the emirateâ&#x20AC;&#x2122;s hospitality sector between 2014 and 2020. In Q2 2019, the Ajman Municipality and Planning Department announced an AED 25 million heritage district that is set to be a key tourist destination in the emirate. According to the Fujairah Tourism Authority, the reconstruction of Habhab Fort and the redevelopment of Fujairah Museum are expected to be complete by the end of 2019.

STR Global data showed that in Ras Al Khaimah, hotel room occupancy rates declined from 75.5% in January to May 2018 to 70.4% in the same period in 2019, a year-on-year drop of 6.8%. Hotel RevPAR in the emirate also decreased during the same period, from AED 482 to AED 402, representing a decline of 17%. Fujairah occupancy rates also declined from 73.2% in January to May 2018 to 66.4% in the same period in 2019, a year-on-year drop of over 6%. â&#x20AC;&#x192;

OCCUPANCY AND RevPAR (AED) 80%

550

80%

650

78%

500

78%

600

76%

450

74%

400

550

73.2%

72%

500 70.4%

450

70% 68%

400 66.4%

350 300

639

250

405

2018

Ras Al-Khaimah ADR Ras Al-Khaimah OCC

Data as of YTD May

571

357

2019

Fujairah+ OCC

74%

73.2%

72%

350 70.4%

300

70% 68%

250

66%

200

64%

150

62%

100

Fujairah+ ADR

76%

75.5%

66.4%

482

296

2018 Ras Al-Khaimah RevPAR Ras Al-Khaimah OCC

402

237

Occupancy

75.5%

Rate (AED)

700

Occupancy

Rate (AED)

OCCUPANCY AND ADR

66% 64% 62%

2019 Fujairah+ RevPAR Fujairah+ OCC

Source: STR Global

35

Q2 2 0 1 9

UA E P R O P E RT Y MA R K E T RE PORT

Dubai

Industrial Market Overview Industrial and logistics property market conditions remained relatively consistent, with increased flexibility in pricing from vendors and landlords acting as a further catalyst for higher transaction volumes.

With a widening gap in the local two-tier market due to occupiers seeking better value, there was a continued flight-to-quality, with pricing for modern, high-quality assets remaining stable, both for rentals and sales. Older, dilapidated properties that no longer comply with current legislation and requirements (such as those of the Dubai Civil Defense) continued to experience negative pressure. This segment of the market is expected to experience further declines in H2 2019.

Demand for general trading spaces accounted for 44% to 52% of both the freezone and onshore markets, followed by manufacturing, logistics and distribution centres. The market is experiencing lengthier transaction times as a result of more extensive occupier due diligence and analysis. The entire procedure, from initial discussions and identifying specific occupier requirements, to property selection and concluding a transaction, can now take between nine and 12 months, or longer in certain cases.

In H2 2019, landlords will be expected to provide further incentives, such as rent-free periods, multiple rental cheques, and capital expendenture contributions, or offer more innovative solutions to provide potential occupiers with better value and service. In return, landlords will expect tenants to sign longer-term leases, in an effort to prevent void periods and stabilise rental incomes..

AVERAGE WAREHOUSE RENTS IN DUBAI

37

Rent (AED/sq ft)

40 30

34

28

25

28

27

NIP Techno Park

Dubai Industrial Park

20 10 0 JAFZA

Al Quoz

Dubai Investment Park

Dubai South DWC

Source: Cavendish Maxwell

Inclusive of sub-lease fees

FREE ZONE DEMAND BY SECTOR - H1 2019

ON SHORE DEMAND BY SECTOR - H1 2019

7%

0.6% 1.9%

6%

5% 0.6% 0.6%

3.8%

2% 8.2%

5% 5%

44%

3.8% 52.2%

1% 5.7%

5.7% 14% 12% 17%

Source: Cavendish Maxwell

36

General Trading Manufacturing Logistics and Distribution F&B Engineering Services Commodities E-commerce Learning and Development Leisure and Healthcare Oil and Gas Others

UA E P R O P E RT Y MA R K E T RE PORT

Abu Dhabi

IND U STR IAL

Q2 2 0 1 9

Industrial Market Overview The Abu Dhabi government continues to promote development in the industrial sector to improve economic growth, whilst reducing dependence on the oil and gas sector.

Most of the existing industrial stock in the older industrial areas is of inferior quality, consisting of smaller multitenanted units. Not only do these properties have connectivity issues, but also lack the dual license structure which helps to attract companies by lowering the cost of doing business.

The emirateâ&#x20AC;&#x2122;s industrial sector has recorded lower rents over the last 12 months. Areas such as Mussafah and ICAD 1 registered declines of more than 10% in Q2 2019, compared to the same period in 2018, with rents for pre-built units averaging AED 32 per sq ft.

In locations like KIZAD, majority of the stock is purpose-built. The limited evidence for pre-built light industrial units indicates rates of AED 25 per sq ft to AED 33 per sq ft on average.

Northern Emirates Industrial Market Overview

According to the Sharjah Economic Development Department, industrial production in Sharjah reached AED 41 billion in 2018. Industrial lease rates and demand remained relatively stable in Q2 2019.

Lease rates for warehouses ranged from AED 15 to AED 32 per sq ft per annum in Sharjah and Ajman, based on location, specifications and availability. In Sharjah Airport International Free Zone (SAIFZ), warehouse rents ranged from AED 32 to AED 39 per sq ft per annum.

In Ras Al Khaimah, RAK Ports launched two new bulk cargo berths at Saqr Port, which enable the bulk cargo exports from the emirate to faraway markets, in an effort to boost the logistics sector. Major clients such as Stevin Rock, which operates the largest limestone quarry in the world, can now export to markets in the Far East and Australia directly from the port.

The expansion of the Umm Al Quwain Free Trade Zone (FTZ) was also initiated this year, with completion expected in Q1 2020. The expansion project will include setting up a new sustainable industrial smart city, featuring logistics, outsourcing and alternative power-related industries, with a focus on small and medium enterprises. Spread over an area of two million sq m, the FTZ is expanding its warehouse and office space to meet demand from new customers.

Source : Cavendish Maxwell

37

Methodology Residential sales prices and rents are derived from Property Monitor (www.propertymonitor.ae), the region’s leading real estate intelligence platform and the only data source powered by RICS-accredited professionals; bringing unprecedented transparency and accuracy to local property markets.

Through Property Monitor, market stakeholders can directly access real-time, transparent and accurate intelligence, unmatched anywhere else in the region. The platform empowers investors, property specialists and banking professionals with authoritative data, analytics and insights that closely correlate with market movements, empowering confident and informed property-related decisions.

The average residential sales price per square foot 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.

The Property Monitor Residential Survey is a quarterly study of agent opinions designed to identify residential market sentiment. This research highlights how new enquiries, leasing activity and transactions, among other metrics, changed from quarter to quarter with agent predictions compared to actual real market performance.

Supply projections for residential projects are based on the Property Monitor Supply Tracker, which tracks supply in real time, including 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 building consultancy team and related government entities.

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Market research

Our strategic consulting and research expertise spans a variety of sectors including residential, office, hospitality, education and mixed-use developments, and our team draws on reliable proprietary data to allow for thorough and accurate analysis of trends and market fluctuations.

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D U BA I

ABU DHABI

M U S CAT

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Disclaimer: The information and analysis contained in this report is based on information from a variety of sources generally regarded to be reliable, and assumptions which are considered reasonable, and which was current at the time of undertaking market research, but no representation is made as to their accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue the indices at any time, for regulatory or other reasons.

The report and analysis do not purport to represent a formal valuation of any property interest and must not be construed as such. Such analyses, including forward-looking statements are opinions and estimates only, and are based on a wide range of variables which may not be capable of being determined with accuracy. Variation in any one of these indicators can have a material impact on the analysis and we draw your attention to this. Cavendish Maxwell and Property Monitor do not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this report.