Post on 15-Jul-2020
transcript
Abu DhabiSales | Rentals2 Dubai
Sales | Rentals6 Northern EmiratesRentals10
Al AinRentals12 UAE
Comparison14 Oxford Economics15In the Middle East for over 30 Years
Property Review
UAE Real Estate ReportQ3 2017
ABU DHABI2
Abu Dhabi | Property Map1 Al Bandar – Raha Beach2 Al Bateen Wharf3 Al Gurm4 Al Maqtaa5 Al Muneera – Al Raha Beach6 Al Nahyan Camp7 Al Raha Gardens8 Al Rayanna9 Al Reef10 Al Zeina – Al Raha Beach11 Baniyas12 Bateen Airport Area13 Bateen Area14 Bawabat Al Sharq15 Capital District (ADNEC)16 CBD / Tourist Club Area17 Corniche 18 Danet Abu Dhabi19 Eastern Mangroves20 Golf Gardens21 Hydra Village22 Khalidia / Al Hosn / Al Manhal23 Khalifa City A24 Khalifa City B25 Maryah Island26 MBZ City27 Mina28 Mushrif / Karama / Manaseer / Muroor29 Officer’sCity30 Rawdhat Abu Dhabi31 Reem Island - Marina Square32 Reem Island – Najmat Abu Dhabi33 Reem Island – rest of Shams Abu Dhabi34 Reem Island – City of Lights35 Reem Island – The Gate District36 Rihan Heights37 Saadiyat Beach District38 The Hills
YASISLAND
11
33
2211
14
11
17
132
22
31
25
19
33
35
34
32
37
36
38
29
15
18
28
24
6
12
4
26
2320
8
1
7
10 9
5
30
27
16
3
21
Most Expensive
Expensive
Mid Priced
Affordable
Note: Area classification by affordability is provided for indicative purposes only as most areas in Abu Dhabi offer various types of residential units, from affordable to high end. As such, the map colour coding takes into account the most prevalent type of product and exceptions of a lower and / or higher price could be available.
© Asteco Property Management, 2017 3
Subduedeconomicgrowthcontinuedtotranslateintojobcuts,reductionofstaffallowancesandfewemploymentopportunities,whichresultedinincreased vacancy rates. Average apartment rental rates dropped by 3% over the quarter and by 10% during the past 12 months, with the highest rate of decline recorded for mid-end properties and large units within prime and high-end projects.
Landlordsofferedreducedrentsandflexiblepaymentterms(upto12cheques)toretainexistingTenantsandsecurenewleases.Furtherpressureonrental rates is expected. In addition to the 800 units delivered in Q3 2017, another 1,500 apartments are anticipated for handover by year-end.
Salespricesforcompletedpropertiesalsorecordedaveragequarterlyandannualdeclinesof3%and10%respectively.Meanwhile,theoff-plansalesmarketfaredslightlybetter,benefitingfromgoodtransactionvolumes,particularlyforprimeandmid-qualitypropertiesasdevelopersoffereddiscountsand attractive payment plans to stimulate sales.
Water’sEdgeonYasIslandbyAldar,forexample,waswellreceivedbyInvestorsuponitslaunchatCityscapeDubaiinSeptember2017.
Abu Dhabi | Apartments
Rental RatesTYPE STUDIO 1 BEDROOM 2 BEDROOMS 3 BEDROOMS % CHANGE
AED 000’S PER ANNUM FROM TO FROM TO FROM TO FROM TO Q2 2017 -Q3 2017
Q3 2016 -Q3 2017
PRIME PROPERTIES
Abu Dhabi Island - - 85 130 132 200 170 270 -6% -13%
Investment Areas 90 105 120 155 145 220 195 290 -1% -5%
HIGH END PROPERTIES
Abu Dhabi Island Central Abu Dhabi - - - - 110 145 145 175 -1% -8%
Corniche - - 85 95 115 140 145 210 -4% -15%
Khalidya / Bateen 83 90 90 115 115 165 140 225 -1% -7%
Investment Areas Al Raha Beach - - 100 110 133 160 165 190 -2% -9%
Marina Square 55 65 70 105 95 140 135 185 0% -11%
Shams Abu Dhabi 60 70 75 105 110 140 145 170 -3% 3%
Saadiyat Beach - - 110 125 163 175 194 210 -2% -3%
MID END PROPERTIES
Abu Dhabi Island 50 55 70 85 85 120 140 155 -3% -12%
Investment Areas Shams Abu Dhabi - - 70 85 90 120 135 165 -4% -11%
Najmat & Tamouh 45 60 65 85 90 130 120 158 -3% -11%
Off Island Khalifa & MBZ City 45 50 60 90 75 135 140 155 -7% -12%
LOWER END PROPERTIES
Abu Dhabi Island Central Abu Dhabi 35 40 58 65 70 85 85 118 -6% -9%
Corniche 40 50 55 65 75 90 90 125 -2% -9%
Khalidiya / Bateen 40 45 60 75 75 95 90 120 -2% -7%
Investment Areas Al Reef 50 60 65 75 85 95 100 125 -3% -12%
Off Island MBZ & Khalifa City A 30 45 40 50 55 75 70 95 -3% -6%
Sales PricesAVERAGE SALES PRICES % CHANGE
AED PER SQ.M. FROM TO Q2 2017 -Q3 2017
Q3 2016 -Q3 2017
Marina Square 1,100 1,250 -4% -7%
Al Bandar 1,400 1,800 0% -6%
Al Muneera 1,250 1,400 -2% -12%
Al Zeina 1,100 1,350 0% -8%
Reef Downtown 800 1,000 -3% -12%
Sun & Sky Towers 1,200 1,350 -6% -11%
The Gate 1,200 1,350 -4% -8%
Saadiyat Beach Residences 1,350 1,500 0% -9%
City of Lights - Hydra 850 950 -8% -16%
Supply completed in 2016
1,350Apartments
Supply completed in Q1-Q3 2017
2,750Apartments
Supply expected in Q4 2017
1,500Apartments
-10% Y-o-Y
-3% Q-o-Q
-10% Y-o-Y
-3% Q-o-Q
Sales Prices Rental Rates
ABU DHABI4
Residents continued to seek alternatives to reduce living cost amidst local, regional and global economic uncertainties. This has contributed to rising vacancy rates in many villa communities as Tenants opted to downsize tosmallerormoreaffordableproperties,whilstsomeevenmovedtoapartment units to reduce their accommodation expenses.
Villa rental rates decreased by 3% on average in Q3 2017 and by 6% over the past 12 months.
Al Raha Gardens, Hydra Village and the larger units of the Saadiyat Beach Villas recorded a more pronounced drop with rents softening by 7%, 4% and 5% respectively.
Despite a marginal decrease in sales prices for completed villas, demand forprimeandhigh-endoff-planprojects,particularlythoselocatedonYasand Saadiyat Islands, remained positive.
Abu Dhabi | Villas
Supply completed in Q1-Q3 2017
550Villas
Supply completed in 2016
90Villas
Supply expected in Q4 2017
250Villas
Rental RatesTYPE 2 BEDROOMS 3 BEDROOMS 4 BEDROOMS 5 BEDROOMS % CHANGE
AED 000’S PER ANNUM FROM TO FROM TO FROM TO FROM TO Q2 2017 -Q3 2017
Q3 2016 -Q3 2017
Abu Dhabi Island Khalidiya / Bateen - - 160 160 160 160 160 160 160 160
Mushrif / Karama / Manaseer - - 160 175 165 200 195 220 -2% -6%
Nahyan Camp / Muroor - - 125 170 170 190 175 210 -3% -11%
Investment Areas Al Raha Beach - - 190 200 210 300 270 310 -2% -5%
Al Reef 95 110 117 130 145 155 155 175 -3% -11%
Hydra Village 80 90 90 105 - - - - -4% -5%
Saadiyat Island - - 300 320 310 380 420 750 -5% -5%
Abu Dhabi Island Al Raha Gardens - - 165 190 170 220 190 250 -7% -13%
Golf Gardens - - 210 225 230 260 250 310 -1% -5%
Khalifa City - - 115 145 140 160 150 180 0% -1%
Mohamed Bin Zayed - - 100 115 130 150 150 165 0% 0%
-6% Y-o-Y
-3% Q-o-Q
-5% Y-o-Y
-1% Q-o-Q
Sales Prices Rental Rates
Sales Prices
AED
mill
ion
-3%-6%
-1%-2%
0%-6%
0%-1%
-3%-9%
1.28
1.00
4.30
2.95
2.60
4.88
4.00
3.20
2.75
2.20
1.80
1.48
10.7
0
6.55
5.75
Raha Gardens Golf Gardens Al Reef Villas Saadiyat Beach Villas(Standard)
Hydra Village
2 Bedrooms 3 Bedrooms 4 Bedrooms 5 Bedrooms Q-o-Q % Change (Q2 2017 - Q3 2017) Y-o-Y % Change (Q3 2016 - Q3 2017)
© Asteco Property Management, 2017 5
Bearishmarketsentimentinlinewithreducedbusinessgrowthandlowoilpricesresultedinlimiteddemandforofficespace.
Quotedrentalrateswerebroadlyunchangedoverthequarter,however,evidenceindicateddeclinesofupto5%to10%oncontractrenewalsinseveralGradeAandBofficebuildings.
Inaddition,Landlordscontinuedtooffersmallerunits,discountsandincentivesinordertoretainexistingTenantsandtosignnewleases.
RentalratesforfittedofficesinGradeAbuildingsrangedfromAED1,500toAED2,500persq.m.perannum,whilstGradeBtowerscommandedbetweenAED700andAED1,400persq.m.perannum depending on the location, payment plan and tenancy period.
No major project completions took place over the past quarter. The ADIB Headquarters on Airport Road and Omega Tower on Reem Island are expected to handover in the next three to six months,increasingofficesupplybyaround100,000sq.m.
Rental RatesAVERAGE RENTAL RATES % CHANGE
AED PER SQ.M. PER ANNUM FROM TO Q2 2017 -Q3 2017
Q3 2016 -Q3 2017
Grade A - Prime 1,500 2,500 0% -8%
Grade B - Recent Build Fitted 780 1,400 0% -5%
Shell and Core 700 1,050 0% -7%
Older Stock Good 650 900 0% -4%
Typical building 600 700 0% -4%
Low quality building 550 600 0% -4%
Supply completed in 2016
84,000 sq.m.
Supply expected in Q4 2017
100,000 sq.m.
Supply completed in Q1-Q3 2017
85,000 sq.m.
Abu Dhabi | Offices
Reducedbusinessgrowthwillcontinuetoputpressureonofficerental rates in the short-term.
-5% Y-o-Y
0% Q-o-Q
Rental Rates
6
59
611
611
311
11
11
11
11
44
44
44
311
311
311
611
611
3425
41
4
1538
3
61
31
17
36
27
23
51
2863
46
55
8
1
47
60
42 2
22
29
39
40
32
2643
24
33
62
45
49
57
30
58
54
37
56
16
44
20
1921
10
35
50
9
14
11
53 13
52
5
6
7
48
12
18
To SharjahTo Abu Dhabi
Arabian Gulf
1 Akoya2 Al Barari3 Al Barsha4 AlFurjan5 Al Nahda6 Al Qusais7 Al Warqaa8 Arabian Ranches9 Bur Dubai10 Business Bay11 City Walk12 Culture Village13 Deira14 DIFC15 Discovery Gardens16 Downtown Dubai17 Downtown Jebel Ali18 Dubai Creek19 Dubai Design District20 DubaiFestivalCity21 Dubai Healthcare
City Phase 222 Dubai Hills23 Dubai Investment
Park24 Dubaiand
Residential Complex25 Dubai Marina26 Dubai Silicon Oasis27 Dubai South28 Dubai Sports City29 Dubailand30 Emirates Hills31 Green Community
32 IMPZ33 International City34 JBR35 Jumeirah36 Jumeirah Golf Estates37 Jumeirah Islands38 Jumeirah Park39 Jumeirah Village Circle40 Jumeirah Village
Triangle41 Jumeirah
Lakes Towers42 Living Legends43 Liwan44 Meydan45 Mirdif46 MotorCity47 Mudon48 Muhaisnah49 Palm Jumeirah50 Pearl Jumeirah51 Remraam52 Rigga Al Buteen53 Sheikh Zayed Road54 Springs / Meadows55 Studio City56 Tecom C57 The Greens58 The Lakes59 The Villa60 Town Square61 Umm Suqeim62 UptownMirdiff63 Victory Heights
Note: Area classification by affordability is provided for indicative purposes only as many areas in Dubai offer various types of residential units, from affordable to high end. As such, the map colour coding takes into account the most prevalent type of product and exceptions of a lower and / or higher price could be available.
Most Expensive
Expensive
Mid Priced
Affordable
Dubai | Property Map
DUBAI
© Asteco Property Management, 2017 7
Dubai | Apartments
Rental Rates
Sales Prices
TYPE STUDIO 1 BEDROOM 2 BEDROOMS 3 BEDROOMS % CHANGE
AED 000’S PER ANNUM FROM TO FROM TO FROM TO FROM TO Q2 2017 -Q3 2017
Q3 2016 -Q3 2017
HIGH END AND LUXURY PROPERTIES
DIFC 65 85 80 130 95 180 150 250 -1% -8%
Downtown Dubai 55 85 75 120 95 160 150 250 -1% -18%
Palm Jumeirah 65 85 80 150 110 200 150 300 -2% -13%
Sheikh Zayed Road 70 80 70 125 90 160 115 200 -3% -9%
MID TO HIGH END PROPERTIES
Business Bay 50 70 60 90 80 140 130 180 -5% -14%
Dubai Marina 45 85 55 95 75 145 105 205 -7% -19%
Greens 55 70 65 95 95 145 130 180 -3% -14%
Jumeirah Beach Residence 65 80 80 120 100 140 135 200 -4% -12%
Jumeirah Lakes Towers 45 70 55 85 75 135 100 170 -5% -13%
AFFORDABLE PROPERTIES
Al Barsha 42 62 55 75 70 110 95 135 -2% -12%
Bur Dubai 30 55 45 80 60 120 90 160 -5% -16%
Deira 25 55 35 75 55 100 75 150 -5% -15%
Discovery Gardens 35 50 50 65 80 100 - - -3% -2%
Dubai Sports City 34 50 48 70 65 95 80 120 -8% -16%
International City 25 38 35 52 50 70 - - -2% -13%
Jumeirah Village 34 48 48 68 65 105 90 130 -6% -15%
Supply completed in 2016
8,750Apartments
Supply completed in Q1-Q3 2017
10,200Apartments
Supply expected in Q4 2017
3,500Apartments
AED
per
sq.
ft.
2,000
1,500
1,000
500
0
0%-5%
-3%-3%
0%-8%
0%-8%
0%0%
-2%-3%
0%-4%
0%-6%
0%-7%
0%-7%
0%-7%
0%0%
DIFC DowntownDubai
PalmJumeirah
Business Bay
DubaiMarina
Greens Jumeirah Beach
Residence
Jumeirah Lakes
Towers
Discovery Gardens
Dubai Sports
CityCity
Jumeirah Village
HIGH END AND LUXURY PROPERTIES MID TO HIGH END PROPERTIES AFFORDABLE PROPERTIES
From 1,200 1,200 900 1,000 850 1,000 1,050 850 700 650 550 700
To 2,300 2,500 2,500 1,700 2,000 1,600 1,600 1,500 1,000 1,200 850 1,000
Average Sales Price Q-o-Q % Change (Q2 2017 - Q3 2017) Y-o-Y % Change (Q3 2016 - Q3 2017)
International
Apartmentsalespricesremainedbroadlystableoverthethirdquarteroftheyear.However,theriseinoff-plansales,particularlyofsmaller,moreaffordableproperties,hasresultedinadeclineinsalesvolumesofcompletedunitsasincreasedincentivesandpost-completionpaymentplansmakeoff-planinvestmentsmoreaccessibletobuyers with more limited equity.
Yearly changes were nominal with decreases of 4% on average across all quality bands. Business Bay and Dubai Marina led the price declines with a drop of 8%, followed by Dubai Sports City, International City and Jumeirah Village at 7%.
Rental rates softened by 4% over the quarter. Whilst this was less pronounced than projected, the annual change since Q3 2016 amounted to 12%, which can be largely attributed to increased supply.
Therehasbeenasteadyriseinnewprojectsreachingcompletion.However,Astecobelievesasignificantamountof the supply forecasted for handover in Q4 2017 will spill over into 2018. These delays are likely to result from bothintentionalphasingconsiderationsandunplannedconstructiondelays/financialissues.
Asteco estimates that the delivery of new properties in Q4 2017 will be similar to previous quarters, which amounted to approximately 3,000 to 4,000 units per quarter.
Despite increased government spending in infrastructure, hospitality and retail in the run-up to the Expo 2020, market sentiment remains low largely due to weak employment growth and the bearish outlook in terms of oil price and global economic recovery.
-12% Y-o-Y
-4% Q-o-Q
-4% Y-o-Y
0% Q-o-Q
Sales Prices Rental Rates
8
Sales Prices
AED
per
sq.
ft.
3,000
2,500
2,000
1,500
1,000
500
0
-2%-6%
-2%-2%
0%-9%
-2%-2%
-2%-2%
0%0%
-2%-2%
ArabianRanches
Dubai Sports City (Victory Heights)
JumeirahPark
JumeirahVillage
Meadows PalmJumeirah
Springs
From 800 850 850 550 950 1,600 950
To 1,600 1,250 1,250 1,050 1,450 4,500 1,150
Average Sales Price Q-o-Q % Change (Q2 2017 - Q3 2017) Y-o-Y % Change (Q3 2016 - Q3 2017)
Dubai | Villas
TYPE 2 BEDROOMS 3 BEDROOMS 4 BEDROOMS 5 BEDROOMS % CHANGE
AED 000’S PER ANNUM FROM TO FROM TO FROM TO FROM TO Q2 2017 -Q3 2017
Q3 2016 -Q3 2017
Al Barsha - - 140 200 150 250 170 300 0% -10%
Arabian Ranches 115 165 130 190 150 250 210 320 -2% -15%
Dubai Sports City (Victory Heights) - - 140 170 160 200 180 280 -6% -14%
Jumeirah - - 140 230 150 250 170 350 -3% -12%
Jumeirah Park - - 165 215 180 250 205 300 -5% -9%
Jumeirah Village 100 140 110 170 110 170 135 195 -8% -14%
Meadows - - 180 220 190 260 200 300 -5% -12%
Mirdif 70 110 85 135 100 180 120 200 -4% -11%
Palm Jumeirah - - 210 350 250 450 350 850 -3% -15%
Springs 100 130 135 175 - - - - -2% -18%
The Lakes - - 165 235 200 295 300 400 -3% -9%
Umm Suqeim - - 140 240 150 300 180 320 -2% -12%
Rental Rates
TenantsandInvestorsbenefitedfromgreaterchoiceofproperties,aswellaslowerpricingandmoreflexiblepayment terms.
Supply completed in 2016
5,000Villas
Supply completed in Q1-Q3 2017
2,325Villas
Supply expected in Q4 2017
1,300Villas
Similar to the apartment market, demand for townhouses and villas has been focused towards more affordable,smallerproperties.
Sales prices remained largely unchanged in Q3 2017, whilst the average annual decline was minimal at 3%, although some communities recorded drops of up to 9%.
Therehasbeenamarkedriseinoff-plantransactionsstimulatedbylowerpricepointsandincreasinglyflexiblepre- and post-completion payment plans, which opened the market to mid-income Investors and End users.
As with apartments, villa rental rates also recorded modest quarterly declines of 3% on average. Annual adjustments were more pronounced with drops of 10% on the back of increasing supply.
Interestingly,thelinebetweenrentalratesfordifferentunittypeswithinthesamecommunityisbecomingincreasinglyblurred.Forexample,withinarentalraterangeofAED110,000toAED140,000Tenantscanchoosebetweenatwo,three,fourandfivebedroomtownhouseinJumeirahVillage;althoughcheaperandmore expensive units are available for each product type.
Incentives now include rent-free periods of up to two months, 6 to 12 cheque payments and free maintenance.
The sheer volume of properties announced and anticipated for delivery over the next few years will continue to put further pressure on rental rates. The impact on some projects will, however, be less notable if they benefitfromuniquedemanddriverssuchasfavourablelocation,advancedfacilities,qualityfinishes,excellentproperty management, above norm incentives, etc.
-10% Y-o-Y
-3% Q-o-Q
-3% Y-o-Y
-1% Q-o-Q
Sales Prices Rental Rates
DUBAI
© Asteco Property Management, 2017 9
Rental RatesAVERAGE RENTAL RATES % CHANGE
AED PER SQ.FT. PER ANNUM FROM TO Q2 2017 - Q3 2017 Q3 2016 - Q3 2017
Barsha Heights (formerly Tecom) 50 120 0% -5%
Bur Dubai 80 130 0% -5%
Business Bay 70 130 0% -10%
DIFC 150 350 0% -2%
Dubai Investment Park 60 85 0% 0%
Dubai Silicon Oasis 50 80 0% 0%
Jumeirah Lakes Towers 60 140 0% -5%
Sheikh Zayed Road 100 250 0% -9%
Dubai | Offices
Sales Prices
AED
per
sq.
ft.
2,000
1,500
1,000
500
0
0%-13%
0%-11%
0%0%
0%-11%
0%-8%
Barsha Heights (formerly TECOM)
Business Bay DIFC Dubai Silicon Oasis Jumeirah Lakes Towers
From 600 700 1,000 450 550
To 1,200 1,600 2,600 750 1,250
Average Sales Price Q-o-Q % Change (Q2 2017 - Q3 2017) Y-o-Y % Change (Q3 2016 - Q3 2017)
Supply completed in 2016
4 msq.ft.
Supply completed in Q1-Q3 2017
1.75 msq.ft.
Supply expected in Q4 2017
0.6 msq.ft.
Theofficesectorhasarguablyproventhemostchallengingassetclassoverthepastyear.
Sales prices and rental rates continued to stagnate in Q3 2017 due to limited demand in a generally oversuppliedmarket,particularlyforstratatitledofficeunits.ThelackoftransactionactivityandreluctanceofLandlordstolowerratesincertainareasresultedinalargelyflatmarket.AlthoughstableratesgenerallymeanthebottomofaRealEstatecycle,wedonotbelievethistobethecasefortheofficesectorandanticipate further, more pronounced declines.
Whilsttherehasbeensomedemandandtake-upinGradeAofficespace,thisonlyconstitutesafractionofthe overall stock.
There has been a rise in the number and size of Real Estate funds / Real Estate Investment Trusts (REITs) in Dubai and wider region, which generate attractive yields for Investors with low entry/exit costs, greater levels of liquidity and the ability to diversify investment across asset types.
Industry experts believe that there remains room for growth and expect a rise in specialised REITs focusing onspecificassetclasses.ThiscouldpotentiallyleadtoagreaterpoolofproactiveLandlordsofferingincentives in order to secure higher occupancy rates to deliver Investor returns.
Commercial property is likely to attract VAT, which is expected to be introduced in January 2018, and although this is likely to dampen Investor interest in the short to medium-term, it may open the possibility of a potential increase in tenant demand for the accounting, auditing and tax advisory sector.
Theoveralloutlookfortheofficemarket,however,isexpectedtobesubdued.
-2% Y-o-Y
0% Q-o-Q
-6% Y-o-Y
0% Q-o-Q
Sales Prices Rental Rates
10
Town Centre
Al Jimi
Al Khabisi
Al Muwaiji
Al Masoudi
Zaker
Al Towaya
East Airport District
Al Foaa
Hili
Al Oattara
Al Buraimi
Al Mutaredh
Al Jahili
AlMutawa’a
Al Sarooj
Al Shuwaimah
Aflaj
Al KhrairDefence
Al Dhahir Um GhafahJebel Hafeet
NeimaAl Qisais
Al Shuaibah
Al Aqabiyya
Zoo District
Falaj Hazza’a
Asharej
Al Markhaniya
Al Dahmaa
Al Bateen
Al Maqam
Gharebah
Al Salamat District
Al Yahar South
Al Yahar North
Al AinInternational
Airport
SULTANATE OF OMAN
Khalifa Bin Zayed St.
Khalifa Bin Zayed St.
Moh
d Bi
n Kh
alifa
St
Baniyas St
Ardh
Jow
St
Emira
tes
St
Zayed Bin Sultan St.
Al Ain | Property Map
AL AIN
© Asteco Property Management, 2017 11
Followingmoderatedeclinesrecordedearly2017,rentalratesinAlAinremainedstagnantforthesecondconsecutive quarter, largely due to limited activity across all sectors.
ComparedtoQ32016,rentalratesdroppedby6%forapartmentsand2%forvillas,whilsttheofficemarketsawno change.
LandlordsofferedreducedrentsandflexiblepaymenttermsoncontractrenewalstoretainexistingTenants.
Thethirdquarterof2017sawnosignificantnewsupply.However,morethanfournewresidentialbuildingsareexpected for handover by the end of the year, which is likely to put pressure on rental and occupancy rates.
Al Ain | Rental Rates
ApartmentsTYPE 1 BEDROOM 2 BEDROOMS 3 BEDROOMS % CHANGE
AED 000’S PER ANNUM FROM TO FROM TO FROM TO Q2 2017 -Q3 2017
Q3 2016 -Q3 2017
Mature Buildings 27 31 37 40 47 53 0% -8%
New Buildings 31 36 40 45 55 68 0% -7%
Prime Compounds 36 40 48 55 65 90 0% -4%
VillasTYPE 3 BEDROOMS 4 BEDROOMS 5 BEDROOMS % CHANGE
AED 000’S PER ANNUM FROM TO FROM TO FROM TO Q2 2017 -Q3 2017
Q3 2016 -Q3 2017
MATURE UNITS
Town Centre 62 67 78 82 107 110 0% -4%
Other(*) 62 67 78 82 107 110 0% -4%
Zaker & Asharej 62 67 78 82 107 110 0% 1%
Al Towaya 70 75 95 98 105 110 0% 1%
Al Jimi 62 67 78 82 107 110 0% -4%
Prime Compounds 90 95 105 100 125 130 0% 0%
NEW UNITS
Town Centre 72 75 93 95 115 145 0% -4%
Other 72 75 93 95 115 145 0% -4%
Zaker 72 75 93 95 110 140 0% 1%
Al Towaya 90 95 98 103 135 150 0% -1%
Al Jimi 72 75 93 95 115 145 0% -4%
Prime Compounds 100 105 110 120 145 160 0% -2%
Offices Retail
AED
per
sq.
m.
per a
nnum
AED
per
sq.
m.
per a
nnum
1,000
500
0
4,000 3,0002,0001,000
0
0%-6%
0%0%
0%-6%
0%0%
0%0%
0%-6%
0%0%
Khalifa Street Aud Al Touba Street Main Street Senaya Street
From 600 600 600 400
To 900 900 900 600
Average Rental Rate Q-o-Q % Change (Q2 2017 - Q3 2017) Y-o-Y % Change (Q3 2016 - Q3 2017)
Khalifa Street Aud Al Touba Street Senaya Street
From 1,000 1,450 750
To 2,400 3,000 1,750
Average Rental Rate Q-o-Q % Change (Q2 2017 - Q3 2017) Y-o-Y % Change (Q3 2016 - Q3 2017)
0% Y-o-Y
0% Q-o-Q
-2% Y-o-Y
0% Q-o-Q
-6% Y-o-Y
0% Q-o-Q
Office Rental RatesVilla Rental RatesApartment Rental Rates
12
Arabian Gulf
311
11
11
11
5
1
10
8
9
3
2
6
4
7
ABU DHABI
DUBAI
SHARJAHFUJAIRAH
RAS AL KHAIMAHUMM AL QUWAIN
AJMAN
SHARJAH
1 Abu Shagara2 Al Khan3 Al Majaz4 Al Nahda5 Al Qasimiyah6 Al Taawun7 Al Wahda8 Corniche / Buhaira9 Khaledia10KingFaisaland King Abdul Aziz Streets
Mina Al Arab
Marjan Island
1
2
Al Hamra
3
RAS AL KHAIMAH
1 Mina Al Arab2 Marjan Island3 Al Hamra
UNITED ARAB EMIRATES
Northern Emirates | Property Map
NORTHERN EMIRATES
© Asteco Property Management, 2017 13
Diverse initiatives implemented during the third quarter of 2017 focused on promoting long-term economic sustainability - RAK stirred foreign investments upon showing 6% steady growth in the tourism sector since 2016, Ajman noted success of business growth initiatives with a 12% quarterly increase on new licenses issued, while Sharjah completed infrastructure projects to pave way for upcoming developments.
However,increasedsupplyofaffordablepropertiesinDubaicontinuedtoaffectapartmentrentalratesacrossthe Northern Emirates. Rates softened by an average of 6% over the quarter and 9% during the past 12 months.
The most pronounced decline since Q3 2016 was recorded in Sharjah, with a drop in average rental rates of 12% forapartmentsand9%foroffices.Despitewaiveddepositrequirementsandrentadjustments,TenantsstilloptedforaffordableunitsinDubaitoliveclosertotheirworkplace.
Meanwhile, Sharjah aims to break the downward trend with master-planned communities and new businesses to stimulate employment growth within the Emirate. Based on announcements to date, new developments covering at least 25 million square feet are expected for completion between 2019 and 2025.
Northern Emirates
Northern EmiratesApartment Rental Rates
SharjahApartment Rental Rates
SharjahOffices Rental Rates
TYPE STUDIO 1 BEDROOM 2 BEDROOMS 3 BEDROOMS % CHANGE
AED 000’S PER ANNUM FROM TO FROM TO FROM TO FROM TO Q2 2017
-Q3 2017Q3 2016 -Q3 2017
SHARJAH
Typical 14 26 20 30 25 33 35 52 -4% -14%
High End / New 20 28 33 37 50 70 60 100 -7% -10%
AJMAN
Typical 13 20 20 30 23 38 30 48 -6% -7%
High End / New 18 27 23 34 27 45 45 55 -3% -7%
UMM AL QUWAIN
Typical 15 19 20 25 25 33 25 45 -8% -9%
RAS AL KHAIMAH
Typical 14 22 19 32 30 45 35 51 -5% -7%
High End / New 22 32 28 45 55 65 68 95 -3% -6%
FUJAIRAH
Typical 18 20 23 29 27 40 45 55 -6% -9%
High End / New - - 39 50 45 55 68 75 -8% -8%
TYPE STUDIO 1 BEDROOM 2 BEDROOMS 3 BEDROOMS % CHANGE
AED 000’S PER ANNUM FROM TO FROM TO FROM TO FROM TO Q2 2017
-Q3 2017Q3 2016 -Q3 2017
Abu Shagara 20 30 28 41 30 55 40 65 -6% -6%
Al Butina 16 24 22 32 25 40 42 60 -7% -13%
Al Khan (Al Mamzar) 22 30 26 35 32 47 48 66 -5% -8%
Al Majaz 20 28 29 40 38 62 55 65 -6% -10%
Al Nahda 20 24 23 33 30 40 40 52 -6% -11%
Al Qasimiah 14 19 20 30 25 33 40 50 -5% -13%
Al Wahda 15 19 22 27 25 28 38 45 -6% -11%
Al Yarmook 14 20 22 30 28 33 45 48 -6% -12%
Corniche 25 30 28 30 35 43 47 58 -6% -9%
Rolla 25 28 35 45 40 60 54 76 -6% -12%
AED
per
sq.
ft.
per a
nnum
60
40
20
0
-8%-12%
-6%-6%
-4%-9%
-4%-4%
-8%-8%
-9%-11%
-9%-9%
Al Taawun Road Corniche Area Al Wahda Al Qasemeh Clock R/A Al Yarmook Industrial Area
From 35 50 40 32 40 32 30
To 45 70 58 53 48 50 48
Average Rental Rate Q-o-Q % Change (Q2 2017 - Q3 2017) Y-o-Y % Change (Q3 2016 - Q3 2017)
-7% -4% -8% -5% -6%
Rental Rates (Q-o-Q)AjmanSharjah FujairahRas Al KhaimahUmm Al Quwain
14 UAE
Rental Rate Movement
Sales Price Movement
AVERAGE 2 BEDROOM APARTMENT
AVERAGE APARTMENT
AVERAGE 4 BEDROOM VILLA
AVERAGE VILLA
AVERAGE OFFICE
AVERAGE OFFICE
Dubai Abu Dhabi Al Ain Ajman Fujairah Sharjah New Ras Al Khaimah New Umm Al Quwain
Dubai Abu Dhabi
Dubai Abu Dhabi Al Ain
Dubai Abu Dhabi
Dubai Abu Dhabi Al Ain Sharjah
Dubai
250
200
150
100
50
0
2,500
2,000
1,500
1,000
500
0
500
400
300
200
100
0
2,000
1,500
1,000
500
0
400
300
200
100
0
2,500
2,000
1,500
1,000
500
0
2008
2008
2008
2008
2008
2008
2009
2009
2009
2009
2009
2009
2010
2010
2010
2010
2010
2010
2011
2011
2011
2011
2011
2011
2012
2012
2012
2012
2012
2012
2013
2013
2013
2013
2013
2013
2014
2014
2014
2014
2014
2014
Q3 2017
20162015
Q3 2017
20162015
Q3 2017
20162015
Q3 2017
20162015
Q32017
20162015
Q32017
20162015
AED
per
sq.
ft.AE
D000
’spe
rann
um
AED000
’spe
rann
um
AED
per
sq.
ft. p
er a
nnum
AED
per
sq.
ft.
AED
per
sq.
ft.
UAE Price ComparisonPrice Movement 2008-Q3 2017
© Asteco Property Management, 2017 15
Our forecast of GDP growth this year is unchanged at 1.7%, as the UAE continues to struggle with low oil prices and reduced oil output. Oil GDP isexpectedtodeclineby1.5%againstthebackdropofOPEC’sdealtorebalanceoilmarkets,whilenon-oilGDPisforecasttogrowby3.2%.For2018, we still expect a pick-up in overall GDP growth to 3.3%.
The contraction of the oil sector continues to weigh on activity. As part of the OPEC deal, the UAE agreed to cut output by 0.14m b/d. This cut and relatively low oil prices are hindering growth in oil GDP. And there are growing signs that the OPEC deal will be extended beyond Q1 2018 as the oil market proves slow to rebalance. We expect growth in the oil sector to remain subdued next year, albeit showing a rise of 2.5%.
Non-oil GDP growth should remain robust for the rest of this year, underpinnedbyeasingfiscalconsolidation,improvingexternaldemandand an expected uptick in consumption ahead of the imminent VAT in January next year. Indeed, the non-oil private sector index hit its highest levelin30monthsinAugust,reflectinggrowingbusinessoptimism.Furthermore,risinginvestmentaheadofExpo2020continuestostrengthen the outlook for non-oil GDP.
Almost four months have passed since the Saudi-led bloc (including the UAE) severed diplomatic ties and shut transport access with Qatar over its close relations with Iran and alleged support for terror groups, and there is no sign of resolution in sight. The impact on the UAE economy so far has beenlimited.ButtherecentrefusaltorenewQatarInsuranceCompany’slicense could spark similar retaliatory measures, undermining business confidenceandleadingtomoreuncertainty.
Growth to pick up in the medium term:
An improvement in economic sentiment and a gradual rise in oil prices are two of the factors expected to lift non-oil growth to about 4% a year in 2018-20, as well as:
• Diversificationstrategy
• Business conditions and Expo 2020 will support investment
• Volatile geopolitical conditions
UAE: Inflation UAE: Real GDP growth
% year % year
Source: Oxford Economics
Note: The data for the UAE has been rebased from 2007 to 2010 prices.
Source: Oxford Economics
1999 19912001 2003 19942005 19972007 20002009 20032011 20062013 20092015 20122017 20152019 2018
F’Cast
F’CastMiddle East &North Africa
Middle East &North Africa
UAE
UAE
14 14
12
10
1210
8 8
66
44
22 0
-4
-20
-2
-4 -6
Who we are - Oxford EconomicsOxfordEconomicswasfoundedin1981asacommercialventurewithOxfordUniversity’sbusinesscollegetoprovideeconomicforecastingandmodelingtoUKcompaniesandfinancialinstitutionsexpandingabroad.Sincethen,wehavebecomeoneoftheworld’sforemostindependentglobaladvisoryfirms,providingreports,forecastsandanalyticaltoolson200countries,100industrialsectorsandover 3,000 cities. Our best-of-class global economic and industry models and analytical tools give us an unparalleled ability to forecast external market trends and assess their economic, social and business impact.
HeadquarteredinOxford,England,withregionalcentresinLondon,NewYork,andSingapore,OxfordEconomicshasofficesacrosstheglobeinBelfast,Chicago,Dubai,MexicoCity,Miami,Milan,Paarl-SouthAfrica,Paris,Philadelphia,SanFrancisco,andWashingtonDC.Weemploy over 200 full-time people, including more than 120 professional economists, industry experts and business editors—one of the largest teams of macro economists and thought leadership specialists.
To find out more and request your free trial please contact Paul de Cintra on pdecintra@oxfordeconomics.com
DISCLAIMER:TheinformationcontainedinthisreporthasbeenobtainedfromandisbaseduponsourcesthatAstecoPropertyManagementbelievestobereliable;however,nowarrantyorrepresentation,expressedorimplied,ismadetothe 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.AstecoPropertyManagementwillnotbeheldresponsibleforanythird-partycontributions.AllopinionsandestimatesincludedinthisreportconstituteAstecoPropertyManagement’sjudgment,asofthedateofthisreportandaresubjecttochangewithoutnotice.FigurescontainedinthisreportarederivedfromabasketoflocationshighlightedinthisreportandthereforerepresentasnapshotoftheUAEmarket.Averages,however,representawiderrangeofareas.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 variationmaybemateriallypositiveornegative.Forecasts,bytheirverynature,involveriskanduncertaintybecausetheyrelatetofutureeventsandcircumstanceswhicharebeyondAstecoPropertyManagement’scontrol.Forafullin-depthstudyofthemarket,pleasecontactAstecoPropertyManagement’sResearchteam.AstecoPropertyManagementLLC.CommercialLicenseNo.218551.Paid-upCapitalAED4,000,000.|ORN180
About Asteco
John Stevens MSc, BSc (Hons), MRICSManaging Director/ Director - Asset Services+971 600 54 7773JohnS@Asteco.com
John Allen BSc, MRICSDirector - Valuation & Advisory+971 600 54 7773JohnA@Asteco.com
Derrick MaguireARLA, NAEAAssociate Director - Transactional Services+971 600 54 7773DerrickM@Asteco.com
James Joughin BSc (Hons), MRICSAssociate Director - Valuation +971 600 54 7773JamesJ@Asteco.com
Jenny Weidling BA (Hons)Manager - Research and Advisory, Dubai+971 600 54 7773JennyW@Asteco.com
Ghada Amhaz MScManager - Research and Advisory, Abu Dhabi+971 2 626 2660GhadaA@asteco.com
Tamer Ibrahim Chaaban BEBranchManager-AlAinoffice+971 3 7666097TamerI@asteco.com
TheMiddleEast’slargestfullserviceRealEstate services company Asteco was formed in Dubai in 1985. Over the years, Asteco has gained enormous respect for consistently delivering high quality, professional, value-added services in a transparent manner. It is also widely recognised for its involvement with manyoftheprojectsthathavedefinedthelandscape and physical infrastructure of the Emirates.
Asteco has an essential combination of local knowledge and international expertise. A deeply established brand, renowned for its application of the latest technological advances, its commitment to transparency, winning strategies and human expertise. Undisputed Real Estate experts, Asteco representsasignificantnumberoftheregion’stoppropertyOwners,DevelopersandInvestors.
VALUATION & ADVISORY Our professional advisory services are conductedbysuitablyqualifiedpersonnelall of whom have had extensive Real Estate experience within the Middle East and internationally.
Our valuations are carried out in accordance with the Royal Institution of Chartered Surveyors (RICS) and International Valuation Standards (IVS) and are undertaken by appropriatelyqualifiedvaluerswithextensivelocal experience.
The Professional Services Asteco conducts throughout the region include:
• Consultancy & Advisory services• Market research• Valuation services
SALES Asteco has established a large regional property Sales division with representatives based in the UAE, Qatar and Jordan. Our Sales teams have extensive experience in the negotiation and sale of a variety of assets.
LEASING Asteco has been instrumental in the Leasing ofmanyhigh-profiledevelopmentsacrosstheGCC.
ASSET MANAGEMENT Asteco provides comprehensive Asset Management services to all property Owners, whether a single unit (IPM) or a regional mixed-use portfolio. Our focus is on maximising value for our Clients.
OWNERS ASSOCIATION 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.
SALES MANAGEMENT Our Sales Management services are comprehensive and encompass everything required for the successful completion and handover of units to individual unit Owners.
LICENSING Our brand, network, system and procedures are now available in territories across the MENA region. Our Licensing services currently includeRealEstateBrokerageFranchisingandassociated support services with many of the keyelementsdesignedspecificallyaroundtheFranchisee,makingitatrulyuniqueandbespoke franchise opportunity.