Property map

ApartmentsSales | Rentals

VillasSales | Rentals

OfficesSales | Rentals2 3 4 5In the Middle East for over 30 Years

Property Review

Dubai Real Estate ReportQ3 2017

DUBAI2

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 Al Furjan5 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 Dubai Festival City21 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

© Asteco Property Management, 2017 3

Dubai | Apartments

Rental Rates

Sales Prices

TYPE STUDIO 1 BEDROOM 2 BEDROOMS 3 BEDROOMS % CHANGE

AED 000’S PER ANNUM FROM TO FROM TO FROM TO FROM TO Q2 2017 -Q3 2017

Q3 2016 -Q3 2017

HIGH END AND LUXURY PROPERTIES

DIFC 65 85 80 130 95 180 150 250 -1% -8%

Downtown Dubai 55 85 75 120 95 160 150 250 -1% -18%

Palm Jumeirah 65 85 80 150 110 200 150 300 -2% -13%

Sheikh Zayed Road 70 80 70 125 90 160 115 200 -3% -9%

MID TO HIGH END PROPERTIES

Business Bay 50 70 60 90 80 140 130 180 -5% -14%

Dubai Marina 45 85 55 95 75 145 105 205 -7% -19%

Greens 55 70 65 95 95 145 130 180 -3% -14%

Jumeirah Beach Residence 65 80 80 120 100 140 135 200 -4% -12%

Jumeirah Lakes Towers 45 70 55 85 75 135 100 170 -5% -13%

AFFORDABLE PROPERTIES

Al Barsha 42 62 55 75 70 110 95 135 -2% -12%

Bur Dubai 30 55 45 80 60 120 90 160 -5% -16%

Deira 25 55 35 75 55 100 75 150 -5% -15%

Discovery Gardens 35 50 50 65 80 100 - - -3% -2%

Dubai Sports City 34 50 48 70 65 95 80 120 -8% -16%

International City 25 38 35 52 50 70 - - -2% -13%

Jumeirah Village 34 48 48 68 65 105 90 130 -6% -15%

Supply completed in 2016

8,750Apartments

Supply completed in Q1-Q3 2017

10,200Apartments

Supply expected in Q4 2017

3,500Apartments

AED

per

sq

ft

2,000

1,500

1,000

500

0

0%-5%

-3%-3%

0%-8%

0%-8%

0%0%

-2%-3%

0%-4%

0%-6%

0%-7%

0%-7%

0%-7%

0%0%

DIFC DowntownDubai

PalmJumeirah

Business Bay

DubaiMarina

Greens Jumeirah Beach

Residence

Jumeirah Lakes

Towers

Discovery Gardens

Dubai Sports

CityCity

Jumeirah Village

HIGH END AND LUXURY PROPERTIES MID TO HIGH END PROPERTIES AFFORDABLE PROPERTIES

From 1,200 1,200 900 1,000 850 1,000 1,050 850 700 650 550 700

To 2,300 2,500 2,500 1,700 2,000 1,600 1,600 1,500 1,000 1,200 850 1,000

Average Sales Price Q-o-Q % Change (Q2 2017 - Q3 2017) Y-o-Y % Change (Q3 2016 - Q3 2017)

International

Apartmentsalespricesremainedbroadlystableoverthethirdquarteroftheyear.However,theriseinoff-plansales,particularlyofsmaller,moreaffordableproperties,hasresultedinadeclineinsalesvolumesofcompletedunitsasincreasedincentivesandpost-completionpaymentplansmakeoff-planinvestmentsmoreaccessibletobuyers with more limited equity.

Yearly changes were nominal with decreases of 4% on average across all quality bands. Business Bay and Dubai Marina led the price declines with a drop of 8%, followed by Dubai Sports City, International City and Jumeirah Village at 7%.

Rental rates softened by 4% over the quarter. Whilst this was less pronounced than projected, the annual change since Q3 2016 amounted to 12%, which can be largely attributed to increased supply.

Therehasbeenasteadyriseinnewprojectsreachingcompletion.However,Astecobelievesasignificantamountof the supply forecasted for handover in Q4 2017 will spill over into 2018. These delays are likely to result from bothintentionalphasingconsiderationsandunplannedconstructiondelays/financialissues.

Asteco estimates that the delivery of new properties in Q4 2017 will be similar to previous quarters, which amounted to approximately 3,000 to 4,000 units per quarter.

Despite increased government spending in infrastructure, hospitality and retail in the run-up to the Expo 2020, market sentiment remains low largely due to weak employment growth and the bearish outlook in terms of oil price and global economic recovery.

-12% Y-o-Y

-4% Q-o-Q

-4% Y-o-Y

0% Q-o-Q

Sales Prices Rental Rates

DUBAI4

Sales Prices

AED

per

sq

ft

3,000

2,500

2,000

1,500

1,000

500

0

-2%-6%

-2%-2%

0%-9%

-2%-2%

-2%-2%

0%0%

-2%-2%

ArabianRanches

Dubai Sports City (Victory Heights)

JumeirahPark

JumeirahVillage

Meadows PalmJumeirah

Springs

From 800 850 850 550 950 1,600 950

To 1,600 1,250 1,250 1,050 1,450 4,500 1,150

Average Sales Price Q-o-Q % Change (Q2 2017 - Q3 2017) Y-o-Y % Change (Q3 2016 - Q3 2017)

Dubai | Villas

TYPE 2 BEDROOMS 3 BEDROOMS 4 BEDROOMS 5 BEDROOMS % CHANGE

AED 000’S PER ANNUM FROM TO FROM TO FROM TO FROM TO Q2 2017 -Q3 2017

Q3 2016 -Q3 2017

Al Barsha - - 140 200 150 250 170 300 0% -10%

Arabian Ranches 115 165 130 190 150 250 210 320 -2% -15%

Dubai Sports City (Victory Heights) - - 140 170 160 200 180 280 -6% -14%

Jumeirah - - 140 230 150 250 170 350 -3% -12%

Jumeirah Park - - 165 215 180 250 205 300 -5% -9%

Jumeirah Village 100 140 110 170 110 170 135 195 -8% -14%

Meadows - - 180 220 190 260 200 300 -5% -12%

Mirdif 70 110 85 135 100 180 120 200 -4% -11%

Palm Jumeirah - - 210 350 250 450 350 850 -3% -15%

Springs 100 130 135 175 - - - - -2% -18%

The Lakes - - 165 235 200 295 300 400 -3% -9%

Umm Suqeim - - 140 240 150 300 180 320 -2% -12%

Rental Rates

TenantsandInvestorsbenefitedfromgreaterchoiceofproperties,aswellaslowerpricingandmoreflexiblepayment terms.

Supply completed in 2016

5,000Villas

Supply completed in Q1-Q3 2017

2,325Villas

Supply expected in Q4 2017

1,300Villas

Similar to the apartment market, demand for townhouses and villas has been focused towards more affordable,smallerproperties.

Sales prices remained largely unchanged in Q3 2017, whilst the average annual decline was minimal at 3%, although some communities recorded drops of up to 9%.

Therehasbeenamarkedriseinoff-plantransactionsstimulatedbylowerpricepointsandincreasinglyflexiblepre- and post-completion payment plans, which opened the market to mid-income Investors and End users.

As with apartments, villa rental rates also recorded modest quarterly declines of 3% on average. Annual adjustments were more pronounced with drops of 10% on the back of increasing supply.

Interestingly,thelinebetweenrentalratesfordifferentunittypeswithinthesamecommunityisbecomingincreasingly blurred. For example, within a rental rate range of AED 110,000 to AED 140,000 Tenants can choosebetweenatwo,three,fourandfivebedroomtownhouseinJumeirahVillage;althoughcheaperandmore expensive units are available for each product type.

Incentives now include rent-free periods of up to two months, 6 to 12 cheque payments and free maintenance.

The sheer volume of properties announced and anticipated for delivery over the next few years will continue to put further pressure on rental rates. The impact on some projects will, however, be less notable if they benefitfromuniquedemanddriverssuchasfavourablelocation,advancedfacilities,qualityfinishes,excellentproperty management, above norm incentives, etc.

-10% Y-o-Y

-3% Q-o-Q

-3% Y-o-Y

-1% Q-o-Q

Sales Prices Rental Rates

© Asteco Property Management, 2017 5

Rental RatesAVERAGE RENTAL RATES % CHANGE

AED PER SQ FT PER ANNUM FROM TO Q2 2017 - Q3 2017 Q3 2016 - Q3 2017

Barsha Heights (formerly Tecom) 50 120 0% -5%

Bur Dubai 80 130 0% -5%

Business Bay 70 130 0% -10%

DIFC 150 350 0% -2%

Dubai Investment Park 60 85 0% 0%

Dubai Silicon Oasis 50 80 0% 0%

Jumeirah Lakes Towers 60 140 0% -5%

Sheikh Zayed Road 100 250 0% -9%

Dubai | Offices

Sales Prices

AED

per

sq

ft

2,000

1,500

1,000

500

0

0%-13%

0%-11%

0%0%

0%-11%

0%-8%

Barsha Heights (formerly TECOM)

Business Bay DIFC Dubai Silicon Oasis Jumeirah Lakes Towers

From 600 700 1,000 450 550

To 1,200 1,600 2,600 750 1,250

Average Sales Price Q-o-Q % Change (Q2 2017 - Q3 2017) Y-o-Y % Change (Q3 2016 - Q3 2017)

Supply completed in 2016

4 msq ft

Supply completed in Q1-Q3 2017

1.75 msq ft

Supply expected in Q4 2017

0.6 msq ft

Theofficesectorhasarguablyproventhemostchallengingassetclassoverthepastyear.

Sales prices and rental rates continued to stagnate in Q3 2017 due to limited demand in a generally oversuppliedmarket,particularlyforstratatitledofficeunits.ThelackoftransactionactivityandreluctanceofLandlordstolowerratesincertainareasresultedinalargelyflatmarket.Althoughstableratesgenerallymeanthebottomofarealestatecycle,wedonotbelievethistobethecasefortheofficesectorandanticipate further, more pronounced declines.

Whilsttherehasbeensomedemandandtake-upinGradeAofficespace,thisonlyconstitutesafractionofthe overall stock.

There has been a rise in the number and size of real estate funds / real estate investment trusts (REITs) in Dubai and wider region, which generate attractive yields for Investors with low entry/exit costs, greater levels of liquidity and the ability to diversify investment across asset types.

Industry experts believe that there remains room for growth and expect a rise in specialised REITs focusing onspecificassetclasses.ThiscouldpotentiallyleadtoagreaterpoolofproactiveLandlordsofferingincentives in order to secure higher occupancy rates to deliver Investor returns.

Commercial property is likely to attract VAT, which is expected to be introduced in January 2018, and although this is likely to dampen Investor interest in the short to medium-term, it may open the possibility of a potential increase in tenant demand for the accounting, auditing and tax advisory sector.

Theoveralloutlookfortheofficemarket,however,isexpectedtobesubdued.

-2% Y-o-Y

0% Q-o-Q

-6% Y-o-Y

0% Q-o-Q

Sales Prices Rental Rates

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. 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 UAE market. Averages, however, represent a wider range of areas. 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 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 License No. 218551. Paid-up Capital AED 4,000,000. | ORN 180

Dubai Real Estate ReportQ3 2017

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