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Page 1: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses
Page 2: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Cavendish Maxwell is a highly respected independent firm of chartered surveyors and property

consultants, focusing on property services throughout the Middle East and Africa. Established in

2008, Cavendish Maxwell is now one of the most influential property consultancies in the region.

As a fully qualified member firm of the Royal Institution of Chartered Surveyors (RICS), and with

extensive knowledge of the region, Cavendish Maxwell has the necessary experience, expertise

and insight to deliver property advice of the highest standard. Our reports are used for loan

security, audit, insurance reinstatement, dispute resolution, risk management, debt recovery,

performance analysis, project financing, development strategy and government initiative

implementation.

We provide a comprehensive range of property services across all our departments, each of

which is headed by highly skilled, experienced and fully qualified RICS chartered surveyors. Our

various teams provide valuation, agency, advisory, management, capital investment, research and

building consultancy services across all property types and sectors.

Our quarterly market reports provide updates on price movement, rent and yield statistics,

residential transactions, and upcoming supply of residential properties through Property Monitor,

the real estate intelligence platform, powered by Cavendish Maxwell.

The reports also incorporate the Property Monitor Residential Survey, conducted among partner

agents operating within the UAE. The survey provides an overview of how new enquiries, leasing

activity and transactions, among other metrics, changed compared to the previous quarter.

About

Page 3: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Contents

Real estate market conditions remained challenging in Q2 2019, with prices continuing to

decline, albeit at a slower pace in some communities. Supply remains the primary driver

for price declines, and developers continue to offer attractive payment options with the

aim of turning tenants into owner-occupiers. Further rental declines made it favourable

for tenants to upgrade to larger units and more premium locations.

Governments continue to push forward with their reforms to stimulate the economy, with

Abu Dhabi being the most recent emirate to introduce new freehold land and property

ownership rules for expatriates.

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

Furthermore, the price gap between apartments and villas/townhouses narrowed

markedly. Handovers for the rest of 2019 will likely average between 10,000 and 13,000

units, following materialisation rates of previous years.

Office tenants continued to prefer ‘plug and play’ fully-fitted options that provide higher

agility and flexibility, as capital expenditure flows reduce. In the hospitality sector,

occupancy levels declined along with a fall in Average Daily Rates (ADRs), both of which

led to a reduction in revenue per available room (RevPAR). Well-located community

retail facilities with established catchments continued to showcase stable performance.

In addition to Dubai, Cavendish Maxwell’s second quarterly report for 2019 gives a

holistic view of the UAE real estate market overall, with an overview of the residential,

office, retail, hospitality and industrial sectors in Abu Dhabi and the Northern Emirates.

Residential Market Overview

Commercial Market Overview

Hospitality Market Overview

Industrial Market Overview

34

36

Foreword

4

30

Page 4: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

SALES PRICE (AED) JANUARY 2008-JUNE 2019

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

OIL PRICES PEAK TO $145/BARREL

OIL PRICES COLLAPSETO $32/BARREL

EARLY SIGNS OF TROUBLE

BOND ISSUANCE BY THE

UAE CENTRAL BANK

REBOUND GROWTH FOR THE GENERAL

MARKET - OIL PRICESABOVE $100/BARREL

LEHMAN BROTHERS COLLAPSE

NAKHEEL AND DWCANNOUNCE

PLANS FOR DEBT RESTRUCTURING

ABU DHABI’S $10 BILLION LOAN

TO DUBAI

Q1-

2008

Q2-

2008

Q3-

2008

Q4-

2008

Q1-

2009

Q2-

2009

Q3-

2009

Q4-

2009

Q1-

2010

Q2-

2010

Q3-

2010

Q4-

2010

Q1-

2011

Q2-

2011

Q3-

2011

Q4-

2011

Q1-

2012

Q2-

2012

Q3-

2012

Q4-

2012

Q1-

2013

Q2-

2013

Q3-

2013

4.0M

3.5M

3.0M

2.5M

2.0M

1.5M

1.0M

0.5M

UAE REALESTATE BOOM

Dubai House Price Timeline

In Q2 2019, average villa/townhouse prices remained stable at AED 1.8

million. However, the average apartment price 2019 declined 5% to AED

1.3 million from AED 1.4 million in Q1 2019.

AED

Villas / TownhousesApartments

Q2 2019 UAE PROPERTY MARKET REPORT

4

Page 5: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

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

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

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

Source: Property Monitor

CENTRAL BANKMORTAGE CAP

EXPO 2020ANNOUNCEMENT

MARKET PEAK

RUSSIAN CURRENCY CRISIS

OIL PRICES COLLAPSE TO $47/BARREL

OIL PRICE DEREGULATION BREXIT VOTE AFFORDABLE

HOUSING ARRIVES

Q4-

2013

Q1-

2014

Q2-

2014

Q3-

2014

Q4-

2014

Q1-

2015

Q2-

2015

Q3-

2015

Q4-

2015

Q1-

2016

Q2-

2016

Q3-

2016

Q4-

2016

Q1-

2017

Q2-

2017

Q3-

2017

Q4-

2017

Q1-

2018

Q2-

2018

Q3-

2018

Q4-

2018

Q1-

2019

Q2-

2019

OPEC LIMITSCRUDE OUTPUT

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Page 6: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

International City (Clusters)

Discovery Gardens

Jumeirah Village Circle

IMPZ

Uptown Motor City

Dubai Silicon Oasis

Al Furjan

Dubai Sports City

Jumeirah Village Triangle

Jumeirah Lakes Towers

The Greens

Business Bay

Dubai Marina

The Views

Jumeirah Beach Residence

DIFC

Palm Jumeirah

Downtown Burj Khalifa

-4%

-6%

-7.2%

-4.8%

-4.5%

-4.2%

-2.6%

-3.7%

-7.7%

-3.7%

-11.1%

-2.9%

-16.6%

-24%

-13.1%

-13.1%

-18.4%

-16.9%-3.9%

-7.3%

-11.4%

-13.2%

-13.9%

-17%

-3.8%-12.7%

-15.9%-5%

0 -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 -11 -12 -13 -14 -15 -16 -17 -18 -19 -20 -21 -22 -23 -24

-14.1%

-13.3%

-5.1%

-23.4%

-16%

-13.3%

-12.7%

-3.3%

% change

DubaiApartment Price Performance

According to the Property Monitor Index (PMI), average apartment prices

declined by 15.1% over the 12-month period from Q2 2018 to Q2 2019.

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

Quarterly Q1 2019 - Q2 2019 Yearly Q2 2018 - Q2 2019

Source: Property Monitor

Q2 2019 UAE PROPERTY MARKET REPORT

6

Page 7: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

-24%

Al Furjan

AED 754/Sq Ft

Uptown Motor City

AED 724/Sq Ft

Dubai Sports City

AED 795/Sq Ft

DIFC

AED 1,544/Sq Ft

International City (Clusters)

AED 495/Sq Ft

Dubai Silicon Oasis

AED 709/Sq Ft

Downtown Burj Khalifa

AED 1,996/Sq Ft

IMPZ

AED 640/Sq Ft

Discovery Gardens

AED 658/Sq Ft

Dubai Marina

AED 1,407/Sq Ft

The Views

AED 1,356/Sq Ft

The Greens

AED 1,089/Sq Ft

Jumeirah Lakes Towers

AED 996/Sq Ft

Jumeirah Village Circle

AED 704/Sq Ft

Jumeirah Beach Residence

AED 1,410/Sq Ft

Palm Jumeirah

AED 1,892/Sq Ft

Business Bay

AED 1,259/Sq Ft

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Page 8: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

-3.8%

-4.8%

-12.2%

-4%

-7.9%

-4%

-4.4%

-4.5%

-4.7%

-1.4%

-3.8%

-13.7%

-14.2%

-23.4%

-15.7%

-12.5%

-11.4%

-12.5%

-8.3%

-15.8%

-14.3%

-3.6%

-10.4%

-21.4%

-16.9%-4.9%

Dubai Villa/Townhouse Price Performance

According to the PMI, average villa/townhouse prices declined 14.7%

over the 12-month period from Q2 2018 to Q2 2019.

Al Furjan Villas

Cedre Villas Silicon Oasis

Jumeirah Village Triangle

Green Community Motor City

The Springs

Jumeirah Park

Arabian Ranches

Victory Heights

The Meadows

The Lakes

Jumeirah Golf Estates

Jumeirah Islands

The Fronds Garden Homes Palm Jumeirah

The average rate of decline in villa/townhouse prices across key communities increased year-on-year, with

communities such as Jumeirah Islands, Dubai Silicon Oasis and Arabian Ranches witnessing a decline in the

range of 15.5 to 16.9%.

0 -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 -11 -12 -13 -14 -15 -16 -17

% change

Quarterly Q1 2019 - Q2 2019 Yearly Q2 2018 - Q2 2019

-18 -19 -20 -21 -22 -23 -24

Source: Property Monitor

Q2 2019 UAE PROPERTY MARKET REPORT

8

Page 9: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

-23.4%Arabian Ranches

AED 980/Sq Ft

Jumeirah Village Triangle

AED 815/Sq Ft

Victory Heights

AED 904/Sq Ft

Jumeirah Golf Estates

AED 1,100/Sq FtAl Furjan Villas

AED 714/Sq Ft

The Lakes

AED 1,163/Sq Ft

Cedre Villas Silicon Oasis

AED 760/Sq Ft

The Meadows

AED 1,013/Sq Ft

Green Community Motor City

AED 870/Sq Ft

The Fronds Garden Homes

Palm Jumeirah

AED 2,258/Sq Ft

Jumeirah Islands

AED 1,238/Sq Ft

Jumeirah Park

AED 919/Sq Ft

The Springs

AED 894/Sq Ft

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Page 10: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Dubai Rent Performance

In the communities of Motor City, The Greens, JLT and Discovery Gardens, downward pressure on apartment

rents was more pronounced, with declines averaging 14.6% year-on-year. Meanwhile, villa/townhouse

communities including The Springs, Victory Heights, Arabian Ranches and Al Furjan registered an average

decline of 11% in rents.

With new supply nearing completion, and an expected increase in handovers this year in both freehold and

leasehold communities across Dubai, the upcoming quarters are expected to continue to exert downward

pressure on rents. However, the rate of decline in rental prices is slowing down.

* Data as of June 2019

Source: Property Monitor

The Views

The Greens

AED 59,220

AED 52,900

AED 78,200

AED 60,040

AED 103,350

AED 95,550

AED 162,500

-5.2

Jumeirah Golf Estates

The Lakes

-8.8

-9.4

Jumeirah Park

Al Furjan Villas

Discovery Gardens

APARTMENT

Studio

1 BR

2 BR

12-month % change

VILLA/TOWNHOUSE

3 BR

4 BR

5 BR

12-month % change

Dubai Marina

AED 61,950AED 85,560

AED 123,900

JBR

AED 63,700AED 108,560

AED 117,600

AED 34,760

AED 128,865

AED 165,000

AED 48,250

JLT

AED 47,750

AED 65,542AED 91,000

The Meadows

The Springs

Rental declines for apartments in Dubai averaged 12.5%, whilst villas/

townhouses registered a 12.6% fall over the 12-month period from Q2 2018

to Q2 2019.

Jumeirah Islands

AED 256,250

AED 351,000

AED 163,350

AED 196,000

AED 240,350

AED 240,448

AED 137,760AED 144,200

AED 159,680

AED 222,300

AED 237,500AED 289,200

AED 200,810

AED220,800

AED 326,400

Annual rent by bedroom

-9.5

-10.4

-15.5

-6 -8.9

-8.8

-15.9

-13.3

-8.7

-8.7

Q2 2019 UAE PROPERTY MARKET REPORT

10

Page 11: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

AED 65,500

AED 90,820AED 153,900

DIFC

-10.8

Jumeirah Golf Estate

AED 63,538

AED 78,330AED 106,320

Business Bay

Downtown Burj Khalifa

AED 66,505

AED 95,325AED 136,178

AED 24,745

AED 35,550AED 52,800

-13.3

International City (Clusters)

Arabian RanchesDubai Sports City

AED 40,500AED 60,760

Motor City

AED 44,800

AED 89,900

-11.8

Victory Heights

38.7%1 cheque

18.5%2 cheques

26.5%4 cheques

6.5%3 cheques

0.2%5 cheques

4.9%6 cheques

0.7%8 cheques

AED 61,440AED 93,960

AED 153,700

AED 155,000AED 209,000

AED 264,000

AED 244,400

-14.2 -16.5 -12.8

-12.3

-11.7

NUMBER OF RENTAL CHEQUES FOR APARTMENTS AND VILLAS/TOWNHOUSES

3.9%12 cheques

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Page 12: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Al Furjan

Dubai 2019 Upcoming Supply

Most of the upcoming supply in 2019 is concentrated in a few communities – Akoya Oxygen, Jumeirah Village

Circle, Mohammed Bin Rashid City, Town Square and Dubai South. Villas make up the majority of the upcoming

supply, at approximately 60%.

Actual materialisation rates in 2019 are expected to match previous years at 40 – 50%, with handovers averaging

between 10,000 and 13,000 units, for the rest of 2019.

APARTMENTS

40%VILLAS/TOWNHOUSES

60%

Dubai Marina

Dubai South

SUPPLY SCHEDULED TO BE COMPLETED BY END OF 2019

Source: Property Monitor

<1,500

1,501 - 2,500

According to Property Monitor, over 1,700 apartments and 1,250 villas/

townhouses were handed over in Dubai during Q2 2019.

Q2 2019 UAE PROPERTY MARKET REPORT

12

Page 13: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Downtown Burj Khalifa

Business Bay

Dubai Sports City

TownSquare

International City

Dubai Silicon Oasis

Dubailand

Mohammed Bin Rashid City

Akoya Oxygen

Jumeirah Village Circle

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Page 14: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Dubai Transaction Overview

Mohammed Bin Rashid (MBR) City, Downtown Burj Khalifa and The Lagoons (Creek Harbour) were the most

sought-after locations, displaying high off-plan apartment transfers in Q2 2019. Whilst off-plan transfers

continue to dominate, the volume of transfers for under-construction apartments declined by 7.6% compared

to Q2 2018.

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

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

Top 5 locations for apartment transfers in Q2 2019

Off-plan transfers continued to dominate in Q2 2019, accounting for more

than 52.2% of total transfers. The total number of transfers in this period

was 9,092, for villas/townhouses and apartments overall.

Q2 2019 UAE PROPERTY MARKET REPORT

14

Page 15: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

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Top 5 locations for apartment transfers in Q2 2019

Top 5 locations for villa/townhouse transfers Q2 2019

OFF-PLAN

OFF-PLAN

SECONDARY MARKET

SECONDARY MARKET

Source: Property Monitor

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Page 16: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

vs

PREDICTIONS

PROPERTY MONITOR RESIDENTIAL SURVEY – Q2 2019

REALITY

Survey Results

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

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

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

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

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

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

Q2 2019 UAE PROPERTY MARKET REPORT

16

Page 17: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Q3 2019 PRICE OUTLOOK

Q3 2019 RENT OUTLOOK

APARTMENTS % of agents who predicted apartment rents would:

VILLAS/TOWNHOUSES% of agents who predicted villa/townhouse rents would:

23.8%

44.4%

17.4%

50.8%

15.4%

54%

21.5%26.2% 30.6%

52.3%

14%

63%

23%

20.6%

47.6%

1.6%3.2%

27%

1.6%1.6%

28.6%

1.6%

23.8% 25.4%

4.8%

46%

23.8%

4.8%

1.6%

Q3 2019 TRANSACTION OUTLOOK

NEW BUYER ENQUIRES% of agents who predicted new buyer

enquiries would:

NEW SELLER INSTRUCTIONS% of agents who predicted new seller

instructions would:

AGREED SALES% of agents who predicted agreed

sales would:

LOOKING FORWARD – Q3 2019

Decrease by more than 5% Decrease by up to 5% Increase by more than 5% Increase by up to 5% Remain the same

Decrease by more than 5%

Decrease

Decrease by up to 5%

Increase

Increase by more than 5%

Remain the same

Increase by up to 5% Remain the same

APARTMENTS% of agents who predicted apartment prices would:

VILLAS/TOWNHOUSES% of agents who predicted villa/townhouse prices would:

Source: Property Monitor

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Abu DhabiPrice Performance

Average sales prices declined in Abu Dhabi’s major investment zones by

12.6% for apartments from Q2 2018 to Q2 2019. Villa/townhouse prices

registered a similar average decline of 12.1% over the same period.

Q2 2019 UAE PROPERTY MARKET REPORT

18

Page 19: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

As of June 2019, prices in Al Reem Island, Al Raha Beach and Saadiyat Beach Residences declined by 13.4% on

average for apartments, according to prices tracked by Property Monitor. The quarterly change from Q1 2019 to

Q2 2019 was 3.9%. In the case of villas, prices also declined across all investment zones.

With the introduction of the new freehold law which allows foreign nationals to own properties, the emirate’s real

estate sector, and the economy as a whole, is expected to receive a boost. Previously, Abu Dhabi only granted

a leasehold of 99 years to foreign property owners. The move is expected to bridge the gap between the Abu

Dhabi and Dubai real estate markets, as Dubai already allows foreign nationals to buy property.

In the first six months of 2019, Abu Dhabi registered AED 31 billion worth of property transactions, according to

first-of-its-kind report shared by the Department of Urban Planning and Municipalities (DPM), with the aim of

increasing the level of transparency for investors and businesses.

AED

/sq

ftA

ED/s

q ft

% c

hang

e%

cha

nge

Al Raha Beach

Al Reem Island

Al Ghadeer

Al Reef Downtown

Saadiyat Beach Residences

Al Raha Gardens

Al Reef Villas

Saadiyat Beach Villas

APARTMENT PRICE PERFORMANCE

VILLA/TOWNHOUSE PRICE PERFORMANCE

200

200

0

0

-6%

-6%

-3.9%

-0.4%

-4%

-12.1%

-11.7%

-12.8%

-3.6% 1,375

1,237

1,040

797

714

818

628

1,423

-11.1%

-3.3%-11.7%

-4%-11.9%

-4.4%-15.2%

-3.9%-13.2%

-8%

-8%

-10%

-10%

-12%

-12%

-14%-16%

-14%

-2%

-2%

-4%

-4%

400

400

600

600

800

800

1200

1200

1000

1000

1400

1400

1600

1600

Source: Property Monitor

Source: Property Monitor

Average Price Per Sq Ft

Average Price Per Sq Ft

Yearly Q2 2018 - Q2 2019

Yearly Q2 2018 - Q2 2019

Quarterly Q1 2019 - Q2 2019

Quarterly Q1 2019 - Q2 2019

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Abu Dhabi Rent Performance

Villas/townhouses in Saadiyat Beach Villas and Al Raha Beach displayed a steep decline in rents, averaging 12.4% annually. Over the same

period, rents for apartments in Al Reem Island also declined by 15% on average. Tenants are expected to benefit from a wider choice at lower

rates, with upgrades to larger homes also possible.

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

are expected to be delivered in H2 2019.

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

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

Source: Property Monitor

2 BR Yearly Q2 2018 - Q2 20191 BRStudio

Re

nt (A

ED

/an

nu

m)

Re

nt (A

ED

/an

nu

m)

% c

han

ge

% c

han

ge

Al Ghadeer

Al Raha Beach

Al Reef Downtown

Al Reem Island

Saadiyat Beach Residences

Al Raha Gardens

Al Reef Villas

Saadiyat Beach

APARTMENT RENT PERFORMANCE

VILLA/TOWNHOUSE RENT PERFORMANCE

0

0-10%-11%-13%-14% -12%

50,000 100,000

100,000

150,000 200,000

200,000 300,000 400,000

-12.5%

-5%

-11.4%

-10.6%

-13.2%

-11.6%

-10.2%

-15%

-10.4%

-2.7%

-4.7%

-4%-6%-8%-10%-12%-14%-16% -2% -0%

5 BR Yearly Q2 2018 - Q2 20194 BR3 BR

Source: Property Monitor

114,00077,805

82,36779,869

38,880

92,60772,150

50,925

156,870

198,623166,056

133,575

135.388128,550

101,081

378,120338,720

316,800

98,000

42,92055,657

28,828

Q2 2019 UAE PROPERTY MARKET REPORT

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Page 21: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Abu Dhabi 2019 Upcoming Supply

Al Raha Beach

Yas Island

Khalifa City

Abu Dhabi City

Saadiyat Island

Al Reem Island

Al Maryah Island

According to Property Monitor, over 500 residential units were handed over

in Abu Dhabi during Q2 2019 alone.

Upcoming supply for the rest of the year is spread across Abu Dhabi’s investment zones and mainland. More than

6,400 residential units are expected to be delivered in H2 2019, of which, 3,000 apartments are to be handed over

on Al Reem Island, Yas Island, Saadiyat Island and Abu Dhabi City. 

APARTMENTS

87%VILLAS/TOWNHOUSES

13%

Supply scheduled to be completed

in H2 2019

<100

100 - 500

501 - 1,000

1,000+

Source: Property Monitor

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With prices and rents in neighbouring Dubai softening, residential real estate in Sharjah and Ajman followed

a similar trend. Rental values declined across all residential segments, with upscale properties witnessing

corrections as well. The current market dynamics in the Northern Emirates have made it more affordable for

residents to upgrade to higher quality properties and larger unit sizes.

Northern EmiratesResidential Market Overview

The Northern Emirates of Sharjah, Ajman and Ras Al Khaimah remain affordable

alternatives for buying and renting of properties in the UAE. Reputed builders

such as Eagle Hills and Emaar are developing master-plan projects in these

emirates.

Studio

Re

nt (A

ED

in t

ho

usa

nd

s/an

nu

m)

1 BR

80

60

40

20

21 20

30 32

2426

22

40

18 17

0

Sharjah Ajman Ras Al Khaimah

AVERAGE RENTAL RATES Q2 2019

Source: Propertymonitor.

Source: Cavendish Maxwell

Q2 2019 UAE PROPERTY MARKET REPORT

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Page 23: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Ras Al Khaimah

2 BR 3 BR

35

4544

45

65

34

50

2532

Similar to Dubai and Abu Dhabi, governments in the Northern Emirates are introducing larger budgets with

diversification strategies to stimulate their economies and boost investment. These measures are expected

to translate into employment and business growth, and as a result, increased transaction activity.

In 2019, the UAE allocated AED 11 billion to improve of roads and infrastructure in the Northern Emirates. The

restoration of Al Ittihad Street, the oldest arterial road linking the emirates to Dubai, is expected to improve

traffic flow, attracting those seeking affordable properties.

Fujairah Umm Al Quwain

57

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SharjahResidential Market Overview

Despite proactive government initiatives and increased spending, rental

rates are expected to face continued pressure for the rest of 2019.

Average apartment rents over the quarter declined by 5%, whilst villa rents on average declined by 3% over the

same period. In popular locations such as Al Khan, Al Majaz and Abu Shagara, annual rents for studios start at

approximately AED 16,000, and go up to AED 85,000 for three-bedroom apartments. Rents in communities in

Al Heerah and Wasit start at approximately AED 85,000 fo four-bedroom villas, going up to AED 200,000 for

six-bedroom villas.

Upcoming residential supply includes master-planned communities such as Maryam Island, Al Mamsha, Al

Zahia, Al Ajada and Sharjah Waterfront.

Rising vacancy levels have led to property owners actively offering discounted rentals to retain and attract

tenants. In addition, they are also willing to absorb fees and provide rent-free periods as part of the incentives

offered.

AVERAGE RENTAL RATES (AED) Q2 2019

20,000 26,000

18,00016,000

Studio Studio

StudioStudio

1 BR 1 BR

1 BR1 BR

2 BR 2 BR

2 BR2 BR

3 BR 3 BR

3 BR

27,000 39,000

21,00021,000

31,000 60,000

28,00028,000

51,000 73,000

37,000

Prime Apartments Prime Apartments

Secondary Apartments Secondary Apartments

Source : Property listings as of June 2019

Q2 2019 UAE PROPERTY MARKET REPORT

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Page 25: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Abu Shagara

Al Nahda

Al NahdaAl Azra

Wasit Suburb

Hoshi

Al Suyoh

Al Jurainah

Al RahmaniyaAl Khan

Al Taawun

Al Majaz

Rolla

Al Tai

105,000 103,000

95,000 90,000

4 BR 4 BR

4 BR 4 BR

5 BR 5 BR

5 BR 5 BR

6 BR 6 BR

6 BR 6 BR

135,000 117,000

123,000 114,000

158,000 135,000

128,000 128,000

Prime Villas Prime Villas

Secondary Villas Secondary Villas

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AjmanResidential Market Overview

Real estate in Ajman is a feasible option for local and expat investors due

to lower rent and sale prices than neighbouring Sharjah and Dubai.

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

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

Annual apartment rents in Ajman range from AED 20,000 per annum for studios, to AED 50,000 for three-

bedroom units. Studio sizes range from 300 to 900 sq ft, one-bedroom apartment sizes range from 550 to

1,900 sq ft and two-bedroom apartment sizes range from 800 to 2,500 sq ft.

With more upcoming supply expected to enter Meshairef, Emirates City and Al Butain, further downward

pressure on rents is expected. Al Zohra, which is a mixed-use development planned for completion in 2023,

has been delayed. Once complete, it is slated to accommodate 50,000 people.

16,00020,000

StudioStudio 1 BR1 BR 2 BR2 BR 3 BR3 BR

18,00025,000 30,00035,000 40,00045,000

Prime Apartments Secondary Apartments

Al Jurf

Al RawdhaAl Naemiya

Rashidiya

Al Bustan

AVERAGE RENTAL RATES (AED) Q2 2019

Source : Property listings as of June 2019

Q2 2019 UAE PROPERTY MARKET REPORT

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Page 27: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Umm Al QuwainResidential Market Overview

As of Q2 2019, apartment rental rates remained stable compared to Q1

2019, with a marginal average decline of 1%. The apartment rental rate in

Umm Al Quwain ranged from AED 16,000 per annum for studios to AED

32,000 per annum for three-bedroom units.

The expansion of the Umm Al Quwain Free Trade Zone was initiated this year, with completion expected by

Q1 2020. The new free zone will be spread over an area of two million sq m, with plans to develop an industrial

smart city with residential, warehouses, offices and leisure facilities.

FujairahResidential Market Overview

As of Q2 2019, rents in Fujairah declined 2% compared to Q1 2019. Rents in

the emirate range from AED 18,000 per annum for studios to AED 50,000

per annum for three-bedroom units.

More than 700 apartments and 1,200 villas are currently under construction in Fujairah, and are expected to be

handed over in H2 2019. Major upcoming residential projects include residential communities in Al Hayl, Eagle

Hills and Fujairah Investment Towers.

As of Q2 2019, a wide range of development projects are underway in the emirate as it seeks to diversify its

economy. These projects include the expansion of Fujairah Airport to boost tourism, and the development

of Sheikh Khalifa Hospital to attract medical tourism. The expansion into other sectors will likely increase

employment, and subsequently, the demand for housing.

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Ras Al KhaimahResidential Market Overview

Q2 2019 UAE PROPERTY MARKET REPORT

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Page 29: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Annual rents in Ras Al Khaimah’s newer stock, including Al Hamra Village

and Mina Al Arab, declined marginally by 1% on average in Q2 2019

compared to Q1 2019. Rents in older stock remained relatively stable.

As of Q2 2019, Al Hamra Village continued to be a popular choice for tenants and investors, and apartments

maintained occupancy of over 75%. Average rents ranged from AED 32,000 per annum for studios to AED

70,000 per annum for three-bedroom units. On the other hand, apartment sales prices at Al Hamra Village

and Mina Al Arab ranged from AED 400 to AED 700 per sq ft.

Major upcoming residential projects in Mina Al Arab include Northbay Residences and Gateway Residence,

which are a part of Hayat Island. Gateway Residence is expected to be delivered by Q4 2019, whilst Northbay

Residences is expected to be complete by 2021. Apartment sales prices within these projects start from AED

670,000 for one-bedroom units.

New developments in Ras Al Khaimah offer a unit mix that is aligned with current market demand. However,

the market is price-sensitive and fluctuations in rental rates are likely to affect the absorption rates of these

new developments.

32,000

27,000

18,000

Studio

Studio

Studio1 BR

1 BR

1 BR2 BR

2 BR

2 BR3 BR

3 BR

3 BR

41,000

37,000

23,00051,000

53,000

33,00070,000

65,000

38,000

Prime Apartments

Prime Apartments

Secondary Apartments

Al Hamra Village

Mina Al Arab Julphar Towers

Al Uraibi

Al Seer

Al Marjan Island

AVERAGE RENTAL RATES (AED) Q2 2019

Source : Property listings as of June 2019

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OFFICE RENTS PERFORMANCE (AED/SQ FT)

DubaiOffice Market OverviewIn H1 2019, tenants continued to prefer ‘plug and play’ fully-fitted options, providing higher agility and flexibility to suit a variety of business

needs. Many occupiers have consolidated their portfolios by opting for purpose-built or competitively-priced spaces. Landlords are now

catering to this preference by converting shell and core offices into fully-fitted and furnished units.

The weakening demand for office space in the face of oversupply in the market is resulting in less office space being constructed. Landlords

are offering incentives such as longer rent-free periods and flexible payment terms, and are also absorbing service charges in some areas

to attract and retain tenants.

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

During Q2 2019, vacancy rates in the commercial sector varied across Dubai ranging from 5% in Dubai Design District to 54% in Business Bay.

Meanwhile, core buildings in Dubai International Financial Centrre (DIFC) continued to outperform the overall market, achieving an occupancy

rate of approximately 90%.

Upcoming supply in the central business district with the expansion of DIFC 2.0, which is expected to offer 6.4 million sq ft of office space,

will likely continue to impact vacancy levels in non-core areas, and subsequently, rents.

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

Professional Services

Financial Services

Technologies

Construction-related

Hospitality, Leisure and Entertainment

Healthcare, Beauty and Pharmaceutical

Retail

Logistics and Distribution

0-1,000

1,001 - 4,999

5,000 - 9,999

10,000+

Source : Cavendish Maxwell

Rent

(AED

/sq

ft)

% c

hang

e

Prime Quality

Mid-quality

Affordable

0 20 40 60 80 100 120 140 160-2%-4%-6%-8%-10%

-5%

-1%

-4%

Quarterly Q1 2019 - Q2 2019

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

Shell and Core Fitted

33%

25%

49%

11%

15%

18%14%

12%

7%

6%6%

4%

70

95

50

65

150

125

Source: Cavendish Maxwell

Q2 2019 UAE PROPERTY MARKET REPORT

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

Rates vary by size, location, access and target tenants (for instance, Supermarket versus F&B concept). Some retail units may be offered

on a rent + turnover percentage.

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

As of Q2 2019, despite declining rents, occupancy rates also fell. However, compared to the wider retail market, well-located community

retail facilities with established catchments, continued to showcase stable performance.

To retain and attract tenants, developers are becoming increasingly flexible on lease terms and offering incentives such as service charge

waivers, revenue share agreements and capital expenditure contributions.

Dubai’s retail sector is also being impacted by the influx of e-commerce companies, which is driven by the growing adoption of smartphones,

internet penetration and other digitised services. To remain relevant and attract customers to brick and mortar stores, retailers are adopting

aggressive promotional campaigns and offering discounts to tenants.

High Street/Destination Retail

200 - 400

60 - 220

Central Business District

Community Retail

210 - 650

RETAIL RENTAL RATES Q2 2019 (AED/SQ FT)

Retail Type Average Rental Rate

Source: Cavendish Maxwell

CO

MM

ER

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Page 32: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

As of Q2 2019, subdued demand, reduced business growth and corporate restructuring placed downward pressure on rents in the office

space. Rents for prime and mid-quality buildings declined by 2% on average in Q2 2019.

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

A rising number of public and quasi-government organisations also responded to market conditions over the quarter by downsizing or

consolidating their operations. Corporates are demanding lease flexibility both at renewal and new lease signing stages, citing the economic

uncertainty within the region as the reason.

Rising vacancy rates and declining rents created an opportunity for tenants to relocate from locations they may have previously been

priced out of, whilst also being able to negotiate rates with landlords. Tenants are choosing to upgrade to Grade A stock from Grade B and C

specifications. As a result, landlords have become more flexible by providing extended rent-free periods, parking provisions, and payments

towards fit-out costs, among others.

Abu Dhabi’s new freehold law introduced in Q2 2019, allowing foreign investors to buy real estate in 15 designated investment zones, is

expected to improve market sentiment in the medium term.

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

Retail rents continued to decline, with a reported increase in vacancy levels. Many mall operators attempted to respond by offering numerous

leasing incentives to attract and retain retailers.

New supply in Q2 2019 included My City Centre Masdar, Majid Al Futtaim’s first shopping mall in Abu Dhabi, with 200,000 sq ft of gross

leasable area across 70 stores. In addition, the refurbished Lulu Shopping Centre opened at Madinat Zayed with a built up area of 323,000

sq ft and 75 stores.

To improve retail market conditions, the government launched Retail Abu Dhabi (RAD) in Q2 2019, an annual sales event in major malls such

as Abu Dhabi Mall, Marina Mall, Dalma Mall, Raha Mall and Mushrif Mall, to boost footfall and stimulate demand.

Rent

(AED

/sq

ft)

% c

hang

e

Prime Quality

Mid Quality

Affordable

0 20 40 60 80 100 120 140 160

160

7080

5075

Shell and Core Fitted

OFFICE RENT PERFORMANCE (AED/SQ FT)

Abu DhabiOffice Market Overview

Retail Market Overview

Source : Cavendish Maxwell

Q2 2019 UAE PROPERTY MARKET REPORT

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Page 33: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Sharjah benefits from a competitive advantage over other emirates due to its low-cost of living and doing business. However, considering

Dubai’s over-supply and rental climate, rents in Sharjah, and neighbouring Ajman, came under pressure. As of Q2 2019, the office sector

continued to display little momentum, owing to a bearish market sentiment and regional uncertainties, which affected potential tenant

upgrades and newcomers to the market.

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

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

Dubai Investments announced that the mixed-use Fujairah Business Centre project is on track to be delivered by Q2 2020. In Umm Al Quwain,

construction began on the expansion of the Umm Al Quwain Free Trade Zone, amid rising demand from new tenants.

In H1 2019, Oasis mall was completed and handed over in Sharjah, having a total area of 650,000 sq ft and over 45 retail stores. In addition,

new F&B outlets opened in the Corniche area and at Al Majaz Waterfront.

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

The development includes cafes and restaurants, in addition to walking tracks and open spaces, offering plenty of recreational options to

visitors. In Q2 2019, Spinneys opened its second store in the Al Jurf community, spanning over 14,000 sq ft.

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

anchor tenant in the mall.

Rent

(AED

/sq

ft)

% c

hang

e

Al Taawun Road

Corniche Area

(Al Khan, Al Majaz 3)

Abu Shagara/Al Qasemiah

Industrial Area

SHARJAH OFFICE RENTAL RATES (AED/SQ FT)

20100 30 40 50 60

28

42

41

34

2635

50

53

Shell and Core Fitted

Northern EmiratesOffice Market Overview

Retail Market Overview

Source : Cavendish Maxwell

CO

MM

ER

CIA

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Page 34: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

According to data released by STR Global, Dubai hotel room occupancy levels declined from 80.8% in the January to May 2018 period to

76.5% in the same period in 2019, a year-on-year decline of 5.3%. During the same period, Average Daily Rates (ADRs) fell 12% from AED 722

to AED 634. Because of declines in both occupancy and ADR, Dubai has seen a 16.8% reduction in revenue per available room (RevPAR). STR

Global data also showed that in H1 2019 there were 3,841 rooms added to the total inventory. 12,472 rooms are expected to be delivered over

the remainder of 2019, with approximately 49% of the additional inventory belonging to the upper-upscale sector.

In H2 2019, with the anticipated addition of new supply amid a period of slowing demand, ADRs are expected to come under increased

pressure, along with further reductions in occupancy levels.

According to data from STR Global, hotel room occupancy rates in Abu Dhabi City declined from 79.4% in the January to May 2018 period

to 78.5% in the same period in 2019, a marginal drop of 1.1%. Hotel RevPAR within the city increased during the period, from AED 233 to AED

253, representing an increase of 8.5%. The increase in RevPAR is mainly attributed to events such as the Special Olympics held in March 2019.

As of H1 2019, the Department of Culture and Tourism (DCT) has reduced tourism fees from 6% to 3.5%, municipal fees from 4% to 2% and

municipality hotel room fees per night from AED 15 to AED 10. This reduction is expected to increase the emirate’s competitiveness and visitor

numbers. In terms of upcoming supply, 560 hotel rooms are due to be added to hospitality inventory by the end of 2019.

DubaiHospitality Market Overview

Abu DhabiHospitality Market Overview

Rate

(AED

)

Rate

(AED

)

740

720

700

680

660

640

620

600

600

580

560

540

520

500

480

460

82%

81%

80%

79%

78%

77%

76%

75%

82%

81%

80%

79%

78%

77%

76%

75%2018 20182019 2019

ADR Rev PAROCC % OCC %

OCCUPANCY AND RevPAR (AED)OCCUPANCY AND ADR

Rate

(AED

)

Rate

(AED

)

340

320

300

280

260

260

250

240

230

220

81%

80%

79%

78%

77%

81%

80%

79%

78%

77%

OCCUPANCY RevPAR (AED)OCCUPANCY % AND ADR

722

233322 253

583 485634

Occ

upan

cy

Occ

upan

cy

Rev PAR

Occ

upan

cy

Occ

upan

cy

80.8% 80.8%

79.4% 79.4%

78.5% 78.5%

76.5% 76.5%

2018 20182019 2019293

ADR OCC % OCC %

Data as of YTD May

Data as of YTD May

Source: STR Global

Source: STR Global

Q2 2019 UAE PROPERTY MARKET REPORT

34

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HO

SP

ITA

LIT

Y

Rate

(AED

)

80%

78%

76%

74%

72%

70%

68%

66%

64%

62%2018 2019

482 296 402 237

Occ

upan

cy

550

500

450

400

350

300

250

200

150

100

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

According to the Sharjah Investment and Development Authority, over 4,000 hotel rooms are expected to be added to the emirate’s

hospitality sector between 2014 and 2020. In Q2 2019, the Ajman Municipality and Planning Department announced an AED 25 million

heritage district that is set to be a key tourist destination in the emirate. According to the Fujairah Tourism Authority, the reconstruction of

Habhab Fort and the redevelopment of Fujairah Museum are expected to be complete by the end of 2019.

STR Global data showed that in Ras Al Khaimah, hotel room occupancy rates declined from 75.5% in January to May 2018 to 70.4% in the

same period in 2019, a year-on-year drop of 6.8%. Hotel RevPAR in the emirate also decreased during the same period, from AED 482 to AED

402, representing a decline of 17%. Fujairah occupancy rates also declined from 73.2% in January to May 2018 to 66.4% in the same period

in 2019, a year-on-year drop of over 6%.

Northern EmiratesHospitality Market Overview

Rate

(AED

)

80%

78%

76%

74%

72%

70%

68%

66%

64%

62%2018 2019

Ras Al-Khaimah ADR Ras Al-Khaimah RevPAR

Ras Al-Khaimah OCC Ras Al-Khaimah OCC

Fujairah+ ADR Fujairah+ RevPAR

Fujairah+ OCC Fujairah+ OCC

OCCUPANCY AND RevPAR (AED)OCCUPANCY AND ADR

639 405 571 357

Occ

upan

cy

700

650

600

550

500

450

400

350

300

250

Data as of YTD May

75.5% 75.5%

70.4% 70.4%

73.2% 73.2%

66.4% 66.4%

Source: STR Global

Q2 2019 UAE PROPERTY MARKET REPORT

35

Page 36: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

Industrial and logistics property market conditions remained relatively consistent, with increased flexibility in pricing from vendors and

landlords acting as a further catalyst for higher transaction volumes.

With a widening gap in the local two-tier market due to occupiers seeking better value, there was a continued flight-to-quality, with pricing

for modern, high-quality assets remaining stable, both for rentals and sales. Older, dilapidated properties that no longer comply with current

legislation and requirements (such as those of the Dubai Civil Defense) continued to experience negative pressure. This segment of the

market is expected to experience further declines in H2 2019.

Demand for general trading spaces accounted for 44% to 52% of both the freezone and onshore markets, followed by manufacturing, logistics

and distribution centres. The market is experiencing lengthier transaction times as a result of more extensive occupier due diligence and

analysis. The entire procedure, from initial discussions and identifying specific occupier requirements, to property selection and concluding

a transaction, can now take between nine and 12 months, or longer in certain cases.

In H2 2019, landlords will be expected to provide further incentives, such as rent-free periods, multiple rental cheques, and capital

expendenture contributions, or offer more innovative solutions to provide potential occupiers with better value and service. In return, landlords

will expect tenants to sign longer-term leases, in an effort to prevent void periods and stabilise rental incomes..

52.2%

12%

44%

17%

14%

1%

5%

5%

2%

6%

7%

5.7%

5.7%

3.8%

8.2%

3.8%

1.9%0.6%

0.6% 0.6%5%

40

30

20

10

0

AVERAGE WAREHOUSE RENTS IN DUBAI

37

NIPTechno Park

Al Quoz Dubai Industrial Park

Dubai SouthDWC

Dubai Investment Park

JAFZA

27

34

28 2825

DubaiIndustrial Market Overview

Re

nt (A

ED

/sq

ft)

FREE ZONE DEMAND BY SECTOR - H1 2019 ON SHORE DEMAND BY SECTOR - H1 2019

General Trading

Manufacturing

Logistics and Distribution

F&B

Engineering

Services

Commodities

E-commerce

Learning and Development

Leisure and Healthcare

Oil and Gas

Others

Inclusive of sub-lease feesSource: Cavendish Maxwell

Source: Cavendish Maxwell

Q2 2019 UAE PROPERTY MARKET REPORT

36

Q2 2019 UAE PROPERTY MARKET REPORT

Page 37: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

IND

US

TR

IAL

The Abu Dhabi government continues to promote development in the industrial sector to improve economic

growth, whilst reducing dependence on the oil and gas sector.

Most of the existing industrial stock in the older industrial areas is of inferior quality, consisting of smaller multi-

tenanted units. Not only do these properties have connectivity issues, but also lack the dual license structure

which helps to attract companies by lowering the cost of doing business.

The emirate’s industrial sector has recorded lower rents over the last 12 months. Areas such as Mussafah and ICAD

1 registered declines of more than 10% in Q2 2019, compared to the same period in 2018, with rents for pre-built

units averaging AED 32 per sq ft.

In locations like KIZAD, majority of the stock is purpose-built. The limited evidence for pre-built light industrial units

indicates rates of AED 25 per sq ft to AED 33 per sq ft on average.

Abu DhabiIndustrial Market Overview

Source : Cavendish Maxwell

According to the Sharjah Economic Development Department, industrial production in Sharjah reached AED 41

billion in 2018. Industrial lease rates and demand remained relatively stable in Q2 2019.

Lease rates for warehouses ranged from AED 15 to AED 32 per sq ft per annum in Sharjah and Ajman, based on

location, specifications and availability. In Sharjah Airport International Free Zone (SAIFZ), warehouse rents ranged

from AED 32 to AED 39 per sq ft per annum.

In Ras Al Khaimah, RAK Ports launched two new bulk cargo berths at Saqr Port, which enable the bulk cargo

exports from the emirate to faraway markets, in an effort to boost the logistics sector. Major clients such as Stevin

Rock, which operates the largest limestone quarry in the world, can now export to markets in the Far East and

Australia directly from the port.

The expansion of the Umm Al Quwain Free Trade Zone (FTZ) was also initiated this year, with completion expected

in Q1 2020. The expansion project will include setting up a new sustainable industrial smart city, featuring logistics,

outsourcing and alternative power-related industries, with a focus on small and medium enterprises. Spread

over an area of two million sq m, the FTZ is expanding its warehouse and office space to meet demand from new

customers.

Northern EmiratesIndustrial Market Overview

Q2 2019 UAE PROPERTY MARKET REPORT

37

Q2 2019 UAE PROPERTY MARKET REPORT

Page 38: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

MethodologyResidential sales prices and rents are derived from Property Monitor (www.propertymonitor.ae), the region’s leading real estate intelligence

platform and the only data source powered by RICS-accredited professionals; bringing unprecedented transparency and accuracy to local

property markets.

Through Property Monitor, market stakeholders can directly access real-time, transparent and accurate intelligence, unmatched anywhere

else in the region. The platform empowers investors, property specialists and banking professionals with authoritative data, analytics and

insights that closely correlate with market movements, empowering confident and informed property-related decisions.

The average residential sales price per square foot is based on the Property Monitor Index which incorporates signed contracts, registered

transactions, valuations and listings verified by Cavendish Maxwell’s market-leading valuation department.

The Property Monitor Residential Survey is a quarterly study of agent opinions designed to identify residential market sentiment. This

research highlights how new enquiries, leasing activity and transactions, among other metrics, changed from quarter to quarter with agent

predictions compared to actual real market performance.

Supply projections for residential projects are based on the Property Monitor Supply Tracker, which tracks supply in real time, including

regular tracking of construction projects, new launches and delays. This is achieved through site inspections as well as regular feedback

from developers, contractors, Cavendish Maxwell’s building consultancy team and related government entities.

40B A N K S

Our documents and advice meet banking and audit criteria, proven by our

presence on over 40 bank panels across the Middle East.

Cavendish Maxwell’s strategic consulting and research team has some

of the region’s most highly qualified data analysts with a wealth of

international real estate advisory experience. We work closely with a broad

portfolio of banks, property developers, government entities and private

clients, providing authoritative, industry-specific research and advice to

maximise portfolio performance.

Our strategic consulting and research expertise spans a variety of

sectors including residential, office, hospitality, education and mixed-use

developments, and our team draws on reliable proprietary data to allow for

thorough and accurate analysis of trends and market fluctuations.

Strategic ConsultingAnd Research Key Services

Market research

Development recommendations

Highest and best use studies

Advisory services

Portfolio strategy

Feasibility studies

Property data

Market entry strategies

Page 39: About - Global Property Guide · Average sales prices and rents softened across most communities in Dubai in Q2 2019. Furthermore, the price gap between apartments and villas/townhouses

DUBAI

2205 Marina PlazaDubai MarinaP.O. Box 118624DubaiUnited Arab Emirates

T: +971 4 453 9525

ABU DHABI

605 West Tower, Abu Dhabi MallTourist Club AreaP.O. Box 126609Abu DhabiUnited Arab Emirates

T: +971 2 448 4677

MUSCAT

Villa 836, Way 3012Al SaroojP.O. Box 3438MuscatSultanate of Oman

T: +968 24 694 150

Disclaimer:

The information and analysis contained in this report is based on information from a variety of sources generally regarded to be reliable, and assumptions which are considered reasonable, and which was current at the time of

undertaking market research, but no representation is made as to their accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue the indices at any time, for regulatory or other reasons.

The report and analysis do not purport to represent a formal valuation of any property interest and must not be construed as such. Such analyses, including forward-looking statements are opinions and estimates only, and are

based on a wide range of variables which may not be capable of being determined with accuracy. Variation in any one of these indicators can have a material impact on the analysis and we draw your attention to this. Cavendish

Maxwell and Property Monitor do not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this report.