Property Review UAE Real Estate ReportInvestment Areas Shams Abu Dhabi - - 70 85 90 120 135 165 -4%...

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


550Villas


90Villas


250Villas

Rental RatesTYPE 2 BEDROOMS 3 BEDROOMS 4 BEDROOMS 5 BEDROOMS % CHANGE


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

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)


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%


84,000 sq.m.


100,000 sq.m.


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


Dubai | Apartments

Rental Rates

Sales Prices

TYPE STUDIO 1 BEDROOM 2 BEDROOMS 3 BEDROOMS % CHANGE


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%


8,750Apartments


10,200Apartments


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


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


Dubai | Villas

TYPE 2 BEDROOMS 3 BEDROOMS 4 BEDROOMS 5 BEDROOMS % CHANGE


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.


5,000Villas


2,325Villas


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


DUBAI


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



4 msq.ft.


1.75 msq.ft.


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


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


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


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


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


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%


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


-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


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 [email protected]

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 [email protected]

John Allen BSc, MRICSDirector - Valuation & Advisory+971 600 54 [email protected]

Derrick MaguireARLA, NAEAAssociate Director - Transactional Services+971 600 54 [email protected]

James Joughin BSc (Hons), MRICSAssociate Director - Valuation +971 600 54 [email protected]

Jenny Weidling BA (Hons)Manager - Research and Advisory, Dubai+971 600 54 [email protected]

Ghada Amhaz MScManager - Research and Advisory, Abu Dhabi+971 2 626 [email protected]

Tamer Ibrahim Chaaban BEBranchManager-AlAinoffice+971 3 [email protected]

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.

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