AbU DhAbI REPORT h1 2013content.argaam.com.s3-external-3.amazonaws.com/98725d21-3a8e … · dubai...

IN THE MIDDLE EAST FOR 28 yEARSDUbAI | AbU DhAbI | AL AIN | ShARJAh | QATAR | JORDAN IN THE MIDDLE EAST FOR 28 yEARS

© Asteco Property Management, 2013 asteco.com | astecoreports.com For additional information: +971 2 626 2660

“ThE AbU DhAbI MARkET IS ShOWING POSITIVE SIGNS, WITh PRICE STAbILIZATION AND RECOVERY IN SELECT AREAS. WITh AbU DhAbI SALES PRICES AT GROWING DISCOUNTS TO DUbAI AND WITh ThE ESTAbLIShMENT OF SEVERAL LIFESTYLE COMMUNITIES, ThE AbU DhAbI MARkET WILL PROVE AN INCREASINGLY ATTRACTIVE ALTERNATIVE FOR INVESTORS AND OWNER-OCCUPIERS ALIkE.” John Stevens, Managing Director, Asteco Property Management

AbU DhAbI REPORTh1 2013

ASSET MANAGEMENT SALES LEASING

VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION



© Asteco Property Management, 2013 asteco.com | astecoreports.com For additional information: +971 2 626 2660 Page 2

AbU DhAbI SUPPLY

RESIDENTIAL MARkET OVERVIEW

OFFICE MARkET OVERVIEW• The office market has remained relatively stable with affordable space now leased out.

• Transaction volumes for Grade A and good quality space in Grade B properties remain relatively low as the minimum sizes are above the requirements of most tenants in the market.

• There has been a movement from Government entities towards Mohamed Bin Zayed offices into Mazyad Mall and Prestige Towers by Manazel. A significant driver has been the lack of parking space in the city.

• Fully fitted space in good quality Grade B offices can be leased at AED 1,100 to 1,200 per square metre per annum off -island and up to AED 1,500 per square metre inside the city.

H1 2013 New Supply H2 2013 Scheduled New Supply

Apartments (in units) 3,500 5,500

Villas (in units) 900 3,900

Offices (in m2) 143,000 151,000

• The first half of 2013 has proven to be a period of relative stability, with declines in some areas offset by growth in others.

• Prime developments have experienced steady rental growth throughout the year, fuelled by strong demand and a lack of availability. This has led to rental increases of up to 10% year on year.

• The high-end sector which includes communities within the large master plan developments of Al Raha Beach and Al Reem Island have recorded significant fluctuations in rents over the last 18 months. Rental rates initially declined after handover, reflecting the large volume of available stock, but then recovered as supply was absorbed into the market and availability declined. With occupancy levels now above 65%, a phased handover of remaining stock and a lack of competing projects within the development pipeline, we anticipate rental rates at Al Raha Beach to increase.

• Conversely, Al Reem Island rents are likely to see some fluctuations over the short to medium term, given that close to 5,000 units (Gate Towers, Mangrove Place, Beach Towers) will be entering the market over the next six to 12 months.

• Contrary to the performance of the prime and high-end sectors, the mid-end sector has seen rental declines over the last 12 months. This trend is being driven by a combination of factors, including residents choosing to relocate to newer, better quality and value for money developments. In addition, a significant number of these properties were historically overpriced and have therefore had a larger margin to adjust in order to reach their current market level.

• At the low-end of the market on the main Abu Dhabi Island, rental rates appear to have bottomed out in the last quarter, following a sustained period of decline. This stabilisation has been supported by robust demand and lack of availability. The trend is further pronounced in the off-island areas of MBZ and KCA, which has led to rental growth of up to 10% year on year.

• The sales market has benefited from improved transaction activity over the last few months, driven by a wider choice of properties available at different levels of affordability. The market has also been buoyed by improved sentiment, partly driven by price increases in neighbouring Dubai.

• However, this improved confidence has also led many sellers to increase asking prices, often beyond realistic levels, leading to a significant slowdown in transactions as buyers and sellers adjust their expectations.

• Sales values have increased throughout most developments including Al Bandar, Al Muneera and Al Zeina at Al Raha Beach as well as Sun & Sky Towers on Al Reem Island where few properties are available below the AED 1,000 per square foot mark.

• These communities are particularly attractive to both investors and owner-occupiers given the availability of facilities, good quality of finishes and leasing prospects.

• However, we anticipate a slowdown in sales price growth as The Gate District at Shams Abu Dhabi (over 3,500 units) is handed over during the second half of the year.

• The first phases at Hydra Village are also handing over, offering the Abu Dhabi market new affordable supply and an opportunity for mid-income expatriates to enter the property market.

• New projects in the form of standalone towers such as Beach Towers and Mangrove Place at Shams Abu Dhabi also offer investors with a long term view a good opportunity to invest in the market.




H1 2013 H2 2013

Transaction activity • Good levels of transaction activity as tenants continued to upgrade to better quality or value for money properties.

• Recently handed over high-end communities and developments have achieved good occupancy levels leading to rental rate increases.

• Limited availability in prime developments led to stable rental rates in Q2 2013 compared to the previous quarter.

• Mid-end properties with inadequate parking on the Abu Dhabi Island have seen an out-migration of tenants resulting in landlords reducing asking rents.

• As new supply enters the market, especially on Al Reem Island, we expect to see increased transaction activity at the mid-end of the market, although no rental rise is forecast in this segment.

• Established communities that are in demand now will see further rental growth, although at a reduced pace given the increased competition in the market.

Popular developments and unit types • Popular developments handed over during the first half of the year included ICT’s development known as Marasy in the Al Bateen area, offering waterside community living inside the city.

• Other developments in demand included Sun & Sky Towers on Al Reem Island and the three communities at Al Raha Beach (Al Bandar, Al Zeina and Al Muneera). These communities have become more attractive by establishing their position as true high-end destinations and with the opening of ancillary retail space.

• Al Reef Villas continued to attract good demand at the affordable segment of the market.

• We expect new towers on Al Reem Island to attract interest from tenants looking for better value for money alternatives than properties currently available on the island, including Al Wifaq Tower, Beach Towers and Mangrove Place at Shams Dhabi.

• The Gate Towers will provide some more high-end quality supply at Shams Abu Dhabi, in line with Sun & Sky Towers.

Leasing terms and incentives • Within popular developments, landlords have become more demanding and typically will only accept a maximum of three cheques.

• Landlords of on-island properties that were faced with declining rental and occupancy levels were willing to negotiate with existing and new tenants, by reducing rents or accepting an increased number of cheques.

• As new supply on Al Reem Island is handed over in the form of standalone towers, we anticipate private landlords to become more willing to accommodate potential tenants by offering attractive lease incentives such as more cheques, 13 months lease contract etc.

Supply and demand • Compared to previous quarters, only limited supply (about 3,500 apartment units) entered the market during the first half of 2013.

• This included a majority of off-island developments, with freehold affordable apartments at Al Reef Downtown and new leasehold towers within Mohamed Bin Zayed City.

• Other developments included Al Wifaq Tower and Sea View Tower on Shams Abu Dhabi as well as Tala Tower at Marina Square.

• Demand was orientated towards well established communities and in general towards developments offering good levels of parking.

• The second half of the year will see a substantial amount of new supply on Al Reem Island with the handover of Beach Towers, Mangrove Place and the Gate Towers.

• Off the island, the ADIC building at Al Raha Beach will offer good quality apartments, whereas Hydra Village will offer new supply of affordable villas in the Shahama area.

• Other buildings to be handed over include several mid-end properties at Rawdhat Abu Dhabi on Airport Road.

SUMMARY h1 2013 AND OUTLOOk h2 2013Residential leasing – apaRtments and Villas




RESIDENTIAL LEASINGapaRtments

• Overall the prime segment has recorded little change in rental rates this quarter and with a limited number of units available, there have been few transactions.

• Typically, the only available units within prime developments are the less attractive ones, with lower asking rents.

• High-end developments within Investment Areas have witnessed the highest rental rate increases since last year, with Al Raha Beach leading the way. Asteco believes that this was largely due to rental rates dropping unrealistically low for these developments last year as landlords competed for tenants.

note on ClassifiCationWe have based our new model on the following factors:

• The Abu Dhabi residential market, and especially the apartment sector has gone through considerable changes since 2012, as large amounts of better quality supply was delivered to the market.

• As a result, projects previously considered high-end are becoming obsolete and are being repositioned in the market to mid- or even low-end properties.

• Recently completed properties, often provide a significant improvement over older stock and hence rents cannot be compared with those of older properties.

• Given these changes in the market, Asteco has reclassified properties to provide a more accurate picture of rental movement.

• The reclassification was completed by selecting a basket of properties, or developments (totalling over 25,000 residential units) across Abu Dhabi.

• Please refer to the next page for a description of the methodology used.

PRIME (Tier 1) AREA Average Apartment Rental Rates (AED’000/pa)

Studio 1 BR 2 BR 3 BR % Change

From To From To From To From To (Q1-Q2 2013) (Q2 2012-Q2 2013)

Abu Dhabi Island

Corniche n/a n/a 115 130 135 190 160 280

0 8Khalidiya / Bateen n/a n/a 100 145 135 180 190 320

Rest of Island n/a n/a 95 120 135 165 205 295

Investment Areas Saadiyat Beach 90 95 120 135 150 190 210 245 0 10

AVERAGE Prime 90 95 110 135 140 180 190 285

High-end (Tier 2) AREA Average Apartment Rental Rates (AED’000/pa)

Abu Dhabi Island

Central Abu Dhabi n/a n/a 80 90 120 150 150 190

2 2

Corniche n/a n/a n/a n/a n/a n/a 165 180

Khalidiya / Bateen 75 85 90 115 130 170 175 290

Rest of Island n/a n/a 85 120 130 180 180 275

Tourist Club / Mina n/a n/a n/a n/a 125 145 155 180

Investment Areas

Al Raha Beach 85 90 95 120 140 180 170 275 6 20

Marina Square 60 70 75 95 95 145 150 225 0 10

Saadiyat Beach n/a n/a 95 120 125 155 175 200 0 n/a

Shams Abu Dhabi n/a n/a 95 115 150 160 170 190 8 17

AVERAGE High-end 75 80 90 110 130 160 165 220

Mid-end (Tier 3) AREA Average Apartment Rental Rates (AED’000/pa)

Abu Dhabi Island

Central Abu Dhabi 50 60 65 80 85 145 150 180

-2 -15

Corniche n/a n/a 90 100 90 180 120 275

Khalidiya / Bateen n/a n/a 90 95 110 150 150 170

Nahyan Camp / Muroor n/a n/a 80 90 120 130 140 150

Rest of Island 50 60 80 95 120 145 150 165

Investment Areas Tourist Club / Mina n/a n/a 65 75 80 90 100 115 0 3

Off- Island

Shams Abu Dhabi n/a n/a 65 90 90 120 140 160

Khalifa A n/a n/a 80 90 115 130 130 160 0 2

MBZ 35 35 65 65 85 85 - -

AVERAGE Mid-end 45 50 75 85 100 130 135 170

Low-end (Tier 4) AREA Average Apartment Rental Rates (AED’000/pa)

Abu Dhabi Island

Central Abu Dhabi 45 50 55 65 75 90 70 145

3 -5

Corniche n/a n/a 60 70 75 80 110 160

Khalidiya / Bateen n/a n/a n/a n/a 75 80 100 140

Nahyan Camp / Muroor n/a n/a 50 75 65 105 90 125

Rest of Island n/a n/a n/a n/a 65 90 75 105

Tourist Club / Mina n/a n/a 60 75 65 100 80 115

Investment Areas Reef Downtown n/a n/a 60 65 70 75 85 95 2 n/a

Off- IslandKhalifa A 20 35 40 45 50 55 60 80

4 10MBZ 20 45 40 60 50 65 60 85

AVERAGE Low-end 30 45 50 65 65 80 80 120




RESIDENTIAL LEASINGpRopeRty ClassifiCation methodology

puRposeTo provide a clear classification tool that enables the accurate positioning of new residential projects in Abu Dhabi according to criteria relevant to occupiers.

The outcome of the grading exercise is to classify each development in terms of quality.

CategoRiesThe classification groups include prime, high, mid and low-end apartments as follows:

• tier 1 - prime developments: The best developments available in Abu Dhabi, part of high-end mixed use communities in prime locations, attached to prestigious hotels and with the best available facilities and amenities. These properties are relatively few in Abu Dhabi and to date consist of St. Regis Residences on Saadiyat Island, Nation Towers and Capital Plaza on the Corniche, Etihad Towers in Bateen and Eastern Mangroves along the Eastern Corniche.

• tier 2 - high-end: Properties that have some but not all of the features required to be considered as prime. A high percentage of the new Investment Stock is classified as high-end, such as Al Raha Beach, Marina Square and Sun & Sky Towers on Reem Island and the Saadiyat Beach Apartments on Saadiyat Island.

• tier 3 & 4 - mid- and low-end: The properties tend to be standalone towers, with no or limited facilities and with varying degrees of finishing. Many mid-end properties are actually towers that were previously considered as high-end. Low-end properties tend to be more mature than mid-end real estate.

methodology• We have selected a number of criteria that affect the desirability

of an apartment property, based on occupier requirements. Each criteria was weighted (from 1 to 3) depending on its importance and each property was given a score for each criteria (with a maximum of 3).

• The result provides a score out of 100%, with prime properties requiring a grade of 70% and above; high-end from 50% to 70%; mid-end from 30% to 50% and low-end below 30%.

note: These criteria are subjective and represent the opinion of Asteco only, based on our daily interactions with residential occupiers.

Criteria The following sets out the criteria used: Scoring

Prime views Do most of the developments have prime water views (or other desirable views such golf

course, grand mosque views, etc.)?

3 = prime views for all or most units

2 = prime views for some units or above average views for most units

1 = average views

0 = no views

Mixed use Is the property part of a mixed use development including offices and/or retail?

What is the quality of retail?

3 = mixed use, with excellent quality retail and/or prime offices attached

2 = mixed use with average quality retail or offices attached or within walking distance

1 = some convenience retail or offices in the surrounding area

0 = standalone project far from any retail or offices

Quality of finishes and layouts

Are the finishes and layouts of a very high

standard?

Are the layouts attractive to potential

occupiers?

3 = excellent finishes, workmanship and materials used

2 = good

1 = average

0 = low quality or very mature, in need of maintenance and repair

Attached to a hotel

Is the property attached (or within walking

distance) to a hotel?

If so, is it a prime property with good F&B or

other leisure facilities?

3 = attached to prime, five star hotel

2 = attached to a good quality four star hotel

1 = within relative walking distance of a good hotel

0 = no hotel close by

Facilities Does the property provide facilities such as pool, gymnasium, children’s play area, squash

courts, tennis courts, etc.? If so, what is the

quality of these facilities and are they sufficient

to properly serve the residents of the property?

3 = full facilities of high quality

2 = some facilities of good quality

1 = minimal facilities of average quality

0 = no facilities

Parking Is there sufficient parking allocated to each residential unit in line or above DoT

requirements?

3 = parking above DoT requirements

2 = parking in line with DoT

1 = some parking but below DoT

0 = no parking

Easy beach access

Is the property within walking distance of a

beach (Corniche, Saadiyat or Al Raha Beach)?

3 = beach located within the community

2 = beach within walking distance

1 = reasonable distance to beach (less than 5 minutes drive)

0 = far from beach

Landmark development

Is the development considered a landmark

property in Abu Dhabi with a memorable

exterior design setting it apart from

surrounding towers?

3 = n/a

2 = yes, clearly identifiable design (i.e. Nation Towers, Etihad Towers, Al Ain Tower)

1 = average design but differentiated from surrounding buildings (i.e. Sama Tower, Crescent Tower)

0 = design in line with surrounding developments




RESIDENTIAL LEASINGVillas

Average Villa Rental Rates (AED’000/pa)

Map Key Location

2 BR 3 BR 4 BR 5 BR % Change

Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2(Q1-Q2 2013) (Q2 2012-Q2 2013)

From To From To From To From To From To From To From To From To

2 Khalidiya / Bateen n/a n/a 160 185 160 195 180 280 200 230 220 290 250 300 2 -4

6 Al Nahyan Camp / Muroor - - - - 170 180 160 180 170 250 185 200 230 300 210 260 -8 -11

3 Mushrif / Karama / Manaseer - - - - 140 160 160 180 160 210 180 190 210 300 190 300 2 -7

9/8 MBZ / Mussafah - - - - 80 105 100 110 130 145 130 140 145 185 150 170 1 7

13/28 Khalifa A & B - - - - 90 105 100 125 130 150 135 150 155 210 150 190 1 8

10 Sas Al Nakhl - - - - 160 180 160 180 185 200 180 210 250 270 220 280 -1 0

12 Al Raha Gardens - - - - 155 180 150 190 180 220 160 240 255 280 250 320 3 6

11 Golf Gardens - - - - 165 210 190 230 225 295 240 280 300 380 320 350 2 5

15 Al Reef 80 90 90 100 105 120 110 120 135 140 140 150 145 155 160 170 7 8

20 Saadiyat Beach - - - - 275 300 275 300 290 330 290 330 500 800 500 800 0 -8

14 Al Raha Beach - - - - 190 250 265 290 280 310 280 300 300 350 310 330 6 14

25 Hills Abu Dhabi - - - - 280 310 300 320 5 5

Average 80 90 90 100 155 180 170 195 185 230 200 230 245 310 250 330 7 7




SUMMARY h1 2013 AND OUTLOOk h2 2013Residential sales – apaRtments and Villas

H1 2013 H2 2013

Transaction activity • With a wide range of completed properties to chose from, at a variety of price levels, more buyers have entered the market. Purchasers included owner-occupiers and investors attracted by the rental stability of good quality master planned communities.

• Overall, confidence levels have improved as prices in neighbouring Dubai have increased steadily since early 2012.

• Asking prices in Abu Dhabi have risen rapidly during the last few months as distressed sellers exited the market and specific developments were faced with good demand levels.

• However, asking prices proved unrealistic; consequently, sales volume have slowed significantly.

• In terms of villa communities, Al Reef and Al Raha Garden have seen the highest transaction volumes, again driven by the improved attractiveness of the communities and, at Al Reef, by product affordability.

• Transaction levels are likely to remain stable during the second half of the year, possibly with some transactions occurring within newly handed over developments at Shams on Reem Island.

Popular developments and unit types

• As in previous quarters, the most popular developments were located within good quality master planned communities, that provide more security in terms of tenant demand.

• Several developments have seen their values increase, including good quality properties located in Al Raha Beach as well as in the affordable Reef Downtown development.

• Al Reef Villas are still the most popular property given their value for money.

• St. Regis Residences has maintained its position as one of the most sought after developments in Abu Dhabi, with limited vacancies.

• Demand will continue to be for good quality properties within communities that are likely to maintain values over the long run.

• We also expect some investors to take a more long term approach and eventually purchase properties within slightly less prominent developments on Al Reem Island for instance, with the anticipation that values would increase in the mid to long term as the master plan evolves.

• Properties such as Hydra Village could regain some popularity as the first units are handed over and investment returns appear relatively attractive given the low asking prices to date.

• Saadiyat Island is forecast to become even more attractive to tenants with the recent opening of Spinney’s supermarket and Shakespeare coffee shop at The Collection.

Buyer profile and reasons for buying

• Many expatriate buyers plan to stay in the country for the next few years and their purchase was often for owner-occupation.

• Whilst UAE Nationals still comprised the larger proportion of investment buyers, the improved confidence stemming from rental growth in certain developments has led to more and more expatriates to consider entering the investment market.

• We anticipate that more expatriates could consider entering the investment market as returns and property appreciation seem possible in defined areas.

• The new affordable community at Hydra Village could attract a number of new buyers from the mid-income segment of the population.

Trends • Sale values have been on the rise, with asking prices increasing faster than deal prices as landlords raise their expectations.

• Since Q2 2012, apartment asking prices have risen by 15% on average across all developments, highlighting an overall positive trend across the market.

• We do not expect values to increase at the same rate as last quarter given that new properties will be handed over leading to a temporary oversupply, especially of standalone towers at Shams Abu Dhabi.

• Values for established communities are likely to grow, albeit at a slightly lower pace, since rents in certain areas are expected to decline in the short to medium term, implying returns could become less attractive.




RESIDENTIAL SALES apaRtments

Villas

Studio

Marina Square Raha Beach / Al Bandar Raha Beach / Al Zeina Raha Beach / Al Muneera Reef Downtown Sun & Sky Towers

Average Apartment Sales Price and Percentage Change(Q1-Q2 2013 and Q2 2012-Q2 2013)

Sales Price (Q1 2013)Sales Price (Q2 2013) Percentage Change (Q2 2012-Q2 2013) Percentage Change (Q1-Q2 2013)

AED/

m2

5% 2% 16% 6% 18% 9%

11% 16% 23% 17% 20% 17%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

11,3

05

13,7

27

11,9

07

11,4

66

7,10

6

13,1

89

10,7

66

13,4

58

10,2

28

10,7

66

5,92

2

12,1

12

Average Villa Sales Price and Percentage Change(Q1-Q2 2013 and Q2 2012-Q2 2013)

2 BR 3 BR 4 BR 5 BR Percentage Change (Q2 2012-Q2 2013) Percentage Change (Q1-Q2 2013)

Sale

s Pr

ice in

AED

Mill

ion

12%

15%

3%

1%

14%

14%

0

1

2

3

4

5

Raha Gardens Golf Gardens Al Reef Villas

1.23

1.60

1.73

2.15

2.65

3.28

4.42

2.08

2.55

3.55

Studio

Marina Square Raha Beach / Al Bandar Raha Beach / Al Zeina Raha Beach / Al Muneera Reef Downtown Sun & Sky Towers

Average Apartment Sales Price and Percentage Change(Q1-Q2 2013 and Q2 2012-Q2 2013)

Sales Price (Q1 2013)Sales Price (Q2 2013) Percentage Change (Q2 2012-Q2 2013) Percentage Change (Q1-Q2 2013)

AED/

m2

5% 2% 16% 6% 18% 9%

11% 16% 23% 17% 20% 17%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

11,3

05

13,7

27

11,9

07

11,4

66

7,10

6

13,1

89

10,7

66

13,4

58

10,2

28

10,7

66

5,92

2

12,1

12

Average Villa Sales Price and Percentage Change(Q1-Q2 2013 and Q2 2012-Q2 2013)

2 BR 3 BR 4 BR 5 BR Percentage Change (Q2 2012-Q2 2013) Percentage Change (Q1-Q2 2013)

Sale

s Pr

ice in

AED

Mill

ion

12%

15%

3%

1%

14%

14%

0

1

2

3

4

5

Raha Gardens Golf Gardens Al Reef Villas

1.23

1.60

1.73

2.15

2.65

3.28

4.42

2.08

2.55

3.55




SUMMARY h1 2013 AND OUTLOOk h2 2013CommeRCial leasing – offiCes

H1 2013 H2 2013

Transaction activity • Transaction activity was relatively slow this quarter, especially for prime office space as most of the large requirements have already been met.

• Many government entities have been moving off the island to Mohamed Bin Zayed, driven by a need for more parking. This has led to an increase in occupancy rates for Prestige Towers by Manazel and the offices at Mazyad Mall where rates for fully fitted space range from AED 1,100 to AED 1,200 per square metre per annum.

• Generally, there has been a movement from the more congested areas of the city towards less central locations.

• The second half of 2013 is forecast to see a significant amount of office space delivered to the market in the form of Landmark Tower on the Corniche, two towers at Capital Centre as well as the Al Bustan Complex at the junction of Airport Road and 29th Street.

• The high quality space at Al Bustan is leasing with asking rents at AED 1,450 per square metre per annum and an additional service charge of AED 200 per square metre per annum.

• We expect that the additional supply could lead to a drop in rental rates for good quality space thereby incentivising more tenants to upgrade.

Popular developments and unit types • Tenants in Nation Towers have been fitting out and will be ready to move in shortly. The Tower was one of the most popular office developments in Abu Dhabi, achieving rapid take up and full occupancy.

• International Tower has secured just over 45% occupancy with tenants including BAE Systems and Aecom. Capital Gate Tower, completed in 2011 has announced occupancy levels of 60%, with Etihad Rail as the anchor tenant.

• We expect most new prime developments will attract a degree of interest, although those part of mixed-use complexes (such as Landmark Tower and Al Bustan Complex) are likely to prove more attractive to potential tenants.

• Overall, the Capital Centre area next to the ADNEC Exhibition Centre is expected to improve as more offices open next quarter, potentially making the area more attractive.

Leasing terms and incentives • Grade A developments continued to hold headline rental levels, although rent free periods have increased to attract or retain tenants.

• Landlords of lower grades are generally more flexible in renegotiating rental rates and also accept multiple payments together with rent free periods.

• We foresee similar trends to continue during the second half of 2013.

Average Office Rental Rates and Percentage Change (AED/m2/pa)

Q1 Q2% Change

(Q1-Q2 2013)% Change

(Q2 2012-Q2 2013)

Grade B Grade A Grade B Grade A Grade B Grade A Grade B Grade A

Recent BuildFitted 800 1,650 900 1,650 13 0 0 -8

Shell & Core 700 1,250 750 1,300 7 4 0 0

From To From To From To From To

Mature Stock

Good Quality Building

700 1,050 700 1,100 0 5 0 0

Typical Building 650 750 650 750 0 0 0 0

Low Quality Building

550 600 550 600 0 0 0 0




PROPERTY FOCUS

Al Wifaq Tower – Shams Abu Dhabi – Reem Island

Description • Al Wifaq Tower is a brand new residential development comprising 262 apartments benefiting from sea and mangrove views overlooking the new public beach and promenade.

• The apartments are all finished to a modern contemporary standard with a mix of 1, 2 & 3 bedroom units.

Location • Shams Abu Dhabi, Al Reem Island.

• Prime canal side plot in proximity to the new public beach.

• 2 minute drive to the Boutik Shopping Mall at Sun & Sky Tower.

Developer Union National Bank

Facilities and Amenities • Swimming pool

• Fully equipped gymnasium

• Tennis court

• Sauna, Jacuzzi & Steam Room

• Children’s play area

• 381 basement parking spaces

• 2,700 m2 of retail

• 24/7 security

Number of Units • 262 residential apartments and retail on the ground floor.

Completion Ready for occupation

Rental Sizes & Prices Number of Units

Size in m2 Starting Rents (AED/pa)

1 BR 145 79 - 93 From AED 75,000

2 BR + Maid 68 110 - 189 From AED 110,000

3 BR + Maid 49 148 - 161 From AED 140,000

11

11

33

33

22

22

11

19

14

24

25

8

15

26

10

28

27

31

13

12

20

11

29

30

32

34

1

2

3

4

5

6

22

16

21

7

23

17

18

35

9

33

31 Al Falah Community Development Project

32 Yas Island*

33 Al Shahama

34 Al Bahia

35 Al Rahba

11 Sheikh Zayed Road

22 Abu Dhabi - Al Ain Road

33 Sweihan Road

21 Hodariyat Island

22 Danet Abu Dhabi

23 Embassy Area

24 Zayed Sports City

25 Bain Jisrain

26 Al Mafraq

27 Baniyas City

28 Khalifa City B

29 Al Shamkha

30 Masdar Future City

11 Golf Gardens

12 Al Raha Gardens

13 Khalifa City A

14 Al Raha Beach*

15 Al Reef*

16 The Marina

17

18 Al Mina

19

Lulu Island*

20

Al Sowwah Island*

Saadiyat Island*

1 Corniche

2 Khalidiya / Bateen

3 Mushrif / Karama / Manaseer

4 Central Abu Dhabi

5 Tourist Club Area

6 Al Nahyan Camp / Muroor

7 Reem Island*

8

9 Mohammed Bin Zayed (MBZ) City

10 Sas Al Nakheel * Investment Areas

Arabian Gulf Arabian Gulf Arabian Gulf



IN THE MIDDLE EAST FOR 28 yEARSDUbAI | AbU DhAbI | AL AIN | ShARJAh | QATAR | JORDAN IN THE MIDDLE EAST FOR 28 yEARS

© Asteco Property Management, 2013 asteco.com | astecoreports.com For additional information: +971 2 626 2660

With 28 years of Middle east experience, Asteco’s Valuation & Advisory Services team brings together a group of the Gulf’s leading real estate experts.

Asteco’s network of offices in Abu Dhabi, Al Ain, Dubai, Northern Emirates, Qatar and Jordan not only

provides a deep understanding of the local markets but also enables us to undertake large instructions

where we can quickly apply resources to meet clients requirements.

Our breadth of experience across all the main property sectors is underpinned by our sales, leasing and

investment teams transacting in the market and a wealth of research that supports our decision making.

Oman

united arab emiratesQatar

Jordan

Egypt

yemen

Iran

Ras Al Khaimah

united arab emirates

AjmanSharjah

dubai

abu dhabi

Al Ain

Fujairah

Um Al Quwaim

disClaimeR: The information contained in this report has been obtained from and is based upon sources that Asteco Property Management believes to be reliable, however, no warranty or representation, expressed or implied, is made to the 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. Asteco Property Management will not be held responsible for any third-party contributions. All opinions and estimates included in this report constitute Asteco Property Management’s judgment, as of the date of this report and are subject to change without notice. Figures contained in this report are derived from a basket of locations highlighted in this report and therefore represent a snapshot of the Dubai market. Due care and attention has been used in the preparation of forecast information. However, actual results may vary from forecasts and any variation may be materially positive or negative. Forecasts, by their very nature, involve risk and uncertainty because they relate to future events and circumstances which are beyond Asteco Property Management’s control. For a full in-depth study of the market, please contact Asteco Property Management’s research team. Asteco Property Management LLC. Commercial Licence No. 218551. Paid-up Capital AED4,000,000.

VALUATION & ADVISORY

Our professional advisory services are conducted by suitably qualified personnel all 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 appropriately qualified valuers with extensive

local experience.

The Professional Services Asteco conducts throughout the region include:

• Consultancy and 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 of many high-profile developments across the GCC.

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.

OWNER ASSOCIATION

Asteco has the experience, systems, procedures and manuals in place to provide streamlined compre-

hensive 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.

John Allen BSc MRICS

Paul Maisfield BSc (Hons) MRICS

Julia Knibbs MSc

Bassam Rizk

Director, Valuation & Advisory

GM & Head of Advisory, Abu Dhabi

Manager - Research & Consultancy, Abu Dhabi

Head of Sales & Leasing

600 54 7773 +971 2 626 2660 +971 2 626 2660 +971 2 626 2660

[email protected] [email protected] [email protected] [email protected]

John Stevens BSc MRICS

James Joughin BSc MRICS

Jenny WeildingBA (Hons)

Vineet Kumar

Managing Director/Director, Asset Services

Head of Valuations Manager - Research & Consultancy, Dubai

Associate Director,Agency Services

600 54 7773 +971 2 626 2660 600 54 7773 600 54 7773

[email protected] [email protected] [email protected] [email protected]

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