Abu Dhabi Report 2011 - Asteco Property Management · Marina Square Shams Abu Dhabi Al Raha Beach...
Transcript of Abu Dhabi Report 2011 - Asteco Property Management · Marina Square Shams Abu Dhabi Al Raha Beach...
Experience Expertise Excellence
Customer Management: +971 2 626 2660 www.astecoreports.com
Abu Dhabi ReportQ22011
The completion and handover of Sun & Sky Towers on Reem Island marks a significant milestone in the evolution of the Abu Dhabi real estate market and will help improve investor confidence, which has been impacted by project delays. The second half of the year will see further prime stock enter the market across a number of key landmark developments providing a significant improvement in the availability of quality homes in the capital.
Elaine Jones, CEO, Asteco Property Management
“”
Property Market Summary
Real Estate Monitor
Highlights
� In line with previous quarters, apartment rentals have continued their decline across the market, a trend we expect to continue throughout 2011 as more stock is handed over, improving tenant choice.
� Whilst villa rates overall have also declined, some developments, such as Al Reef, have seen slight increases due to the shortage of ready-to-move in units pending the release of the Mediterranean phase.
� The office sector overall has seen a further drop in achieved rental rates as landlords are willing to accept lower rents to retain existing tenants.
� In Al Ain, there has been a decline in apartment rentals, mostly within the newer developments where the substantial new supply is struggling to lease.
� The office sector in Al Ain remains stable as supply and demand remain balanced. Retail is still in demand, with several major brands taking up space in the newly completed malls.
� The UAE Federal Government has announced the decision to extend the property visa period from six months to three years. This move is expected to improve demand among foreign investors in the emirate.
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Abu Dhabi Apartment Rentals Abu Dhabi Villa Rentals Office Rentals
Al Ain Apartment Al Ain Office Rentals Al Ain Villa Rentals
Apartment Sales Price and % Change (Q1 - Q2 2011)
AED
/m
2A
ED
/m
2/
pa
Min Max
-40%
-20%
0%
20%
40%
60%
80%
Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11
10,2
18
11,5
63
12,3
70
11,2
94
12,3
70
13,9
83
0%
-7%
-4%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Marina Square Shams Abu Dhabi Al Raha Beach
Average Office Rental Rates (Q2 2011)
Min Max
900
900
900
600 1,
400
1,35
0
1,40
0
1,30
0
0
400
800
1,200
1,600
Khalifa Street Aud Al Touba Street Main Street Senaya Street
The line graph below demonstrates the average percentage sales and rental trend on a quarterly basis.
Rental Rates (AED/pa)Sales Prices (AED/m2) or
Price Point (AED)
Min Max % Min Max %
Abu
Dha
bi
Apartment
1 BR 30,000 110,000 -6
10,200 14,000 -42 BR 35,000 170,000 -9
3 BR 60,000 250,000 -9
Villa
2 BR 95,000 110,000 9 850,000 950,000
-13 BR 100,000 250,000 -2 1,050,000 2,800,000
4 BR 120,000 325,000 -4 1,550,000 4,000,000
5 BR 130,000 360,000 -3 1,900,000 5,000,000
Office Per m2 600 2,000 -4 na na
Al A
in
Apartment
1 BR 20,000 25,000 -18 na na -
2 BR 40,000 50,000 -9 na na -
3 BR 50,000 60,000 -10 na na -
Villa
3 BR 45,000 85,000 -5 na na -
4 BR 60,000 115,000 -2 na na -
5 BR 75,000 140,000 0 na na -
Office Per m2 600 1,400 0 na na -
02 For additional information call +971 2 626 2660 or email [email protected]
Residential
� The sales market remains stagnant with low transactional activity being recorded over the last three months.
� The handover of Sun & Sky Towers is, however, a positive step forward in breathing confidence back into the freehold market, which will be further buoyed by the handover of Al Zeina and Marina Square as the year progresses.
� Sorouh has recently launched a Rent-to-Own scheme on approximately 160 units within Sun Tower. The scheme provides the tenant with a no-obligation opportunity to buy the unit, converting 90% of the rent paid into equity. The rents have been set at a 5% premium above the standard lease option, are frozen for three years and can be paid in four instalments. In the first week of launching the scheme approximately 35 units had been let, with the majority of tenants taking the Rent-to-Own option.
� We understand that Aldar is contemplating a similar scheme for some of its retained stock at Raha Beach, although no details are currently available.
First Units Handed Over at Shams Abu Dhabi, Reem Island
Further Adjustments in the Apartment Rental Sector � The apartment rental market continues its downward adjustment as new supply is delivered to the market. It is expected that this trend will continue throughout 2011 as new landmark developments complete and establish new market rental benchmarks in an increasingly competitive environment.
� Increased availability and affordable rents are leading to a significant rise in leasing enquiries, predominantly from existing residents looking for better value for money and upgrades.
� Sun & Sky Towers on Reem Island (totalling 1,147 apartments) are now being handed over with the first occupiers having taken possession.
� At Raha Beach, Al Bandar is currently bucking the market trend with rents on the few units that have become available having increased marginally in comparison with the previous quarter. This increase in rents is likely to be short-lived given the imminent handover of Al Zeina.
Average Apartment Rental Rates (AED/pa)
Map Key
Location1 BR 2 BR 3 BR
Min Max Min Max Min Max
PRIME BUILDINGS*
1 Corniche 95,000 110,000 140,000 170,000 200,000 250,000
2 Khalidiya / Bateen 90,000 110,000 130,000 160,000 180,000 220,000
3 Mushrif / Karama / Manaseer 65,000 75,000 120,000 140,000 150,000 180,000
4 Central Abu Dhabi 70,000 90,000 120,000 140,000 150,000 180,000
5 / 18 Tourist Club Area / Mina 70,000 80,000 120,000 140,000 160,000 180,000
6 Al Nahyan Camp / Muroor 70,000 80,000 120,000 140,000 160,000 180,000
9 / 8 MBZ / Mussafah 55,000 60,000 60,000 85,000 90,000 110,000
13 / 28 Khalifa A & B 40,000 50,000 60,000 75,000 90,000 110,000
7 Shams Abu Dhabi 85,000 105,000 120,000 150,000 160,000 195,000
14 Al Raha Beach 115,000 120,000 140,000 180,000 220,000 250,000
LOW QUALITY BUILDINGS
1 Corniche 75,000 85,000 100,000 120,000 135,000 150,000
2 Khalidiya / Bateen 60,000 85,000 70,000 100,000 110,000 130,000
3 Mushrif / Karama / Manaseer 60,000 70,000 70,000 80,000 90,000 100,000
4 Central Abu Dhabi 50,000 70,000 70,000 80,000 95,000 105,000
5 / 18 Tourist Club Area / Mina 60,000 65,000 70,000 80,000 90,000 95,000
6 Al Nahyan Camp / Muroor 55,000 65,000 70,000 80,000 90,000 100,000
9 / 8 MBZ / Mussafah 30,000 40,000 35,000 45,000 60,000 75,000
13 / 28 Khalifa A & B 30,000 40,000 35,000 45,000 60,000 75,000
The range in rents shown in the table reflects the variance in quality of stock within each location. Whenever possible, rentals are based on actual transactions; however, in some cases where no transactions were made, rentals represent our opinion of current market rental value.
(*) Prime buildings represent the best buildings available for the specific area
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Al Ain Apartment Al Ain Office Rentals Al Ain Villa Rentals
Apartment Sales Price and % Change (Q1 - Q2 2011)
AED
/m
2A
ED
/m
2/
pa
Min Max
-40%
-20%
0%
20%
40%
60%
80%
Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11
10,2
18
11,5
63
12,3
70
11,2
94
12,3
70
13,9
83
0%
-7%
-4%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Marina Square Shams Abu Dhabi Al Raha Beach
Average Office Rental Rates (Q2 2011)
Min Max
900
900
900
600 1,
400
1,35
0
1,40
0
1,30
0
0
400
800
1,200
1,600
Khalifa Street Aud Al Touba Street Main Street Senaya Street
03www.astecoreports.com
Residential
For additional information call +971 2 626 2660 or email [email protected]
Tier 1: New “high-end” supply � Investment areas and prime main island stock with water views and facilities
� Overall improvement in quality
� Some integrated mixed-use developments offering lifestyle destinations
� Increasingly competitive segment of the market as more supply is delivered
� Expatriate landlords seeking to secure tenants to cover mortgage and service charge commitments
� Good value for money
� Increasingly flexible terms
Tier 2: Buildings completed during market peak (2007 - 2010) � Landlords were able to command high rents even for poor buildings in secondary locations
� Often poor value for money
� These rents are proving unsustainable with a high percentage of tenants looking to relocate or renegotiate
� Landlords face steep increases in vacancy rates
� Rents have fallen by up to 50% over the last two years
� Rents within this tier are predominantly unstable
Tier 3: Buildings completed prior to 2007 � Non Investment Area stock
� Single landlords (UAE Nationals)
� High proportion of tenants paying historic (below market) rents protected by the rent cap
� High occupancy levels close to 100% with tenants reluctant to move
� Prime buildings in this tier still able to command high rents when individual units become vacant due to a scarcity of availability
� A large proportion of the stock in this tier is of below-average quality catering for the low-income groups often sharing units and unable to afford current market rents
� Poor quality buildings in this tier prime for redevelopment
� Rents within this tier are predominantly stable
Movements In the Apartment Leasing Sector
Well priced units leasing quickly
Rents Falling / Adjusting
Rents below market rates and largely
protected by rent cap
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Apartment Sales Price and % Change (Q1 - Q2 2011)
AED
/m
2A
ED
/m
2/p
a
Min Max
-40%
-20%
0%
20%
40%
60%
80%
Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11
10,218
11,563
12,370
11,294
12,370
13,983 0%
-7%
-4%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Marina Square Shams Abu Dhabi Al Raha Beach
Average Office Rental Rates (Q2 2011)
Min Max
900
900
900
600 1,400
1,350
1,400
1,300
0
400
800
1,200
1,600
Khalifa Street Aud Al Touba Street Main Street Senaya Street
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Apartment Sales Price and % Change (Q1 - Q2 2011)
AED
/m
2A
ED
/m
2/
pa
Min Max
-40%
-20%
0%
20%
40%
60%
80%
Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 10
,218
11,5
63
12,3
70
11,2
94
12,3
70
13,9
83
0%
-7%
-4%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Marina Square Shams Abu Dhabi Al Raha Beach
Average Office Rental Rates (Q2 2011)
Min Max
900
900
900
600 1,
400
1,35
0
1,40
0
1,30
0
0
400
800
1,200
1,600
Khalifa Street Aud Al Touba Street Main Street Senaya Street
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Al Ain Apartment Al Ain Office Rentals Al Ain Villa Rentals
Apartment Sales Price and % Change (Q1 - Q2 2011)
AED
/m
2A
ED
/m
2/
pa
Min Max
-40%
-20%
0%
20%
40%
60%
80%
Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11
10,2
18
11,5
63
12,3
70
11,2
94
12,3
70
13,9
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0%
-7%
-4%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Marina Square Shams Abu Dhabi Al Raha Beach
Average Office Rental Rates (Q2 2011)
Min Max
900
900
900
600 1,
400
1,35
0
1,40
0
1,30
0
0
400
800
1,200
1,600
Khalifa Street Aud Al Touba Street Main Street Senaya Street
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Al Ain Apartment Al Ain Office Rentals Al Ain Villa Rentals
Apartment Sales Price and % Change (Q1 - Q2 2011)
AED
/m
2A
ED
/m
2/
pa
Min Max
-40%
-20%
0%
20%
40%
60%
80%
Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11
10,2
18
11,5
63
12,3
70
11,2
94
12,3
70
13,9
83
0%
-7%
-4%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Marina Square Shams Abu Dhabi Al Raha Beach
Average Office Rental Rates (Q2 2011)
Min Max
900
900
900
600 1,
400
1,35
0
1,40
0
1,30
0
0
400
800
1,200
1,600
Khalifa Street Aud Al Touba Street Main Street Senaya Street
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Apartment Sales Price and % Change (Q1 - Q2 2011)
AED
/m
2A
ED
/m
2/p
a
Min Max
-40%
-20%
0%
20%
40%
60%
80%
Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11
10,218
11,563
12,370
11,294
12,370
13,983 0%
-7%
-4%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Marina Square Shams Abu Dhabi Al Raha Beach
Average Office Rental Rates (Q2 2011)
Min Max
900
900
900
600 1,400
1,350
1,400
1,300
0
400
800
1,200
1,600
Khalifa Street Aud Al Touba Street Main Street Senaya Street
New entrants to Abu Dhabi will be drawn to
this stock
Setting new market rental benchmarks
Dubai Commuters will consider this
stock if rental gap narrows sufficiently for
comparable quality
High Level of Tenant Movement
Some movement of tenants from poor
quality buildings and illegally split villas as the
rental gap narrows
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Apartment Sales Price and % Change (Q1 - Q2 2011)
AED/
m2
AED/
m2 /p
a
Min Max
-40%
-20%
0%
20%
40%
60%
80%
Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11
10,2
18
11,5
63
12,3
70
11,2
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12,3
70
13,9
83
0%
-7%
-4%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Marina Square Shams Abu Dhabi Al Raha Beach
Average Office Rental Rates (Q2 2011)
Min Max
900
900
900
600 1,
400
1,35
0
1,40
0
1,30
0
0
400
800
1,200
1,600
Khalifa Street Aud Al Touba Street Main Street Senaya Street
Tenants unable to relocate into Tier 3
stock due to a lack of availability
04 For additional information call +971 2 626 2660 or email [email protected]
Commercial
� The leasing market for good quality villas remains strong, with rents remaining predominantly stable. This is principally due to a lack of choice in this segment of the market helping to keep vacancy rates low and sustaining good rental returns for landlords.
� The Hills villa development next to The Officers Club has now been handed over and will compete with Golf Gardens. Although the development was sold to UAE Nationals, most of the villas are being made available to lease as the majority of purchasers were companies buying for investment purposes. The development provides a total of 147 five-bedroom villas of high quality. The semi-detached villas are available to rent at AED 310,000, with the
detached villas starting from AED 350,000. The VIP villas, which extend to around 1,250 square metres, range from AED 900,000 to AED 1.2 million per annum.
� At Al Reef, a shortage of available properties, particularly two-bedroom townhouses, has seen rents increase slightly over the last three months. However, the Mediterranean phase of the development that will comprise a total of 516 new townhouses is due to start in the next few weeks, which is likely to put some downward pressure on rents as landlords compete to secure tenants.
� With relatively stable rents and declining sales prices, the prospects of Al Reef as an investment for mid-income buyers are improving, although some uncertainty remains in terms of future rentals that are expected to decline upon handover of subsequent units, thus impacting short term returns.
� Within the high-end and luxury segments of the market, several products are available for sale, including the Saadiyat Beach villas
by TDIC that are nearing completion and are set to become one of the premier residential addresses in Abu Dhabi, with a beach front location, close to the City Centre, the Cultural District and an array of luxury hotels. Selling prices start from around AED 6.5 million for a three-bedroom villa up to over AED 30 million for a six-bedroom villa overlooking the Gary Player golf course.
Villa Rental Market
Villa Sales Market
Q2 2011 Villa Rental Rates (AED/pa)
Map Key Location2 BR 3 BR 4 BR 5 BR
Min Max Min Max Min Max Min Max
2 Khalidiya/Bateen - - 190,000 240,000 170,000 300,000 270,000 300,000
6 Al Nahyan Camp/Muroor - - 180,000 220,000 180,000 270,000 240,000 320,000
3 Mushrif/Karama/Manaseer - - 170,000 200,000 210,000 260,000 200,000 330,000
9 / 8 MBZ/Mussafah - - 100,000 135,000 120,000 160,000 130,000 180,000
13 / 28 Khalifa A & B - - 120,000 140,000 140,000 170,000 140,000 230,000
10 Sas Al Nakhl - - 180,000 210,000 220,000 240,000 280,000 300,000
12 Al Raha Gardens - - 170,000 180,000 180,000 250,000 250,000 300,000
11 Golf Gardens - - 240,000 250,000 250,000 325,000 330,000 360,000
15 Al Reef 95,000 110,000 115,000 120,000 135,000 145,000 155,000 175,000
Q2 2011 Villa Sales Prices (AED million) % Change (Q1 2011 – Q2 2011)
Map Key
Location2 BR 3 BR 4 BR 5 BR 2 BR 3 BR 4 BR 5 BR
Min Max Min Max Min Max Min Max Min Max Min Max Min Max Min Max
12 Al Raha Gardens n/a n/a 1.80 2.10 2.00 2.60 3.45 4.20 - - -5 0 -2 -10 15 2
11 Golf Gardens n/a n/a 2.65 2.80 3.00 4.00 4.65 5.00 - - -2 0 3 0 3 -4
15 Al Reef 0.85 0.95 1.05 1.15 1.55 1.65 1.90 2.00 -6 0 -5 -8 3 -3 6 0
05www.astecoreports.com
� We have witnessed an increase in leasing enquiries in the office sector over the last three months, although many tenants are reluctant to commit.
� Further to a recent study undertaken by Asteco, we estimate that over 1.3 million square metres of office space is under construction and will enter the market progressively over the next three years, in addition to over of 200,000 square metres of vacant space already available across a number of new office and mixed-use developments completed over the last 18 months.
� Companies with requirements above 1,000 square metres have strong negotiating power as landlords compete to secure anchor tenants for their buildings.
� The rental rates quoted by landlords vary significantly, with the highest quoting rents of AED 2,850 per square metre (including service charges) at Capital Plaza down to AED 1,330 per square metre (including service charges) for similar quality fitted space at Guardian Tower.
� A common strategy among developers/landlords, recognising the dynamics of the current market, is not to quote rents but to negotiate terms on a case-by-case basis. The rents agreed will depend upon the quality of the tenant and the lease terms agreed, which have a material impact upon the assets investment value.
For additional information call +971 2 626 2660 or email [email protected]
Commercial / Al Ain
Office Rentals
Al Ain Market Overview Overall declining rents in the residential sector
Stable Commercial and Retail Sectors
� Rental rates in Al Ain have followed the trend seen in previous quarters and continued to decline overall, with tenants moving back to Dubai and Abu Dhabi.
� Older units have more successfully maintained asking rents as landlords have been more proactive in renegotiating with existing tenants rather than face vacancies. Existing tenants are therefore encouraged to stay in their current property as they pay rents in line with the market and save on costs associated with moving (i.e. moving costs, commissions, deposits, etc.).
� There is an oversupply of two-bedroom apartments, as these are the main unit types available within recently completed compounds. In fact, whilst most of the demand is for two-bedroom and three-bedroom apartments, the amount of available units is far higher than the levels of demand, leading to rental declines.
� Two new compounds (200 apartments and villas in Al Basara Area and 128 apartments in Al Muaje Area) are due for handover in Q3 2011. These will be among the first developments to be in line with the guidelines provided by Al Ain Municipality and Estidama that regulate the quality of new supply in terms of unit sizes, bedroom sizes, safety and air conditioning and it is expected that these properties may generate some good enquiry levels.
� Rents in the commercial sector have not changed since last quarter, with no new supply and stable levels of demand.
� The retail sector is, however, seeing changes as major brands already present in Al Ain are seeking to expand. In relation to this, a new shopping centre, Al Naqafa, is set to open in July 2011 in a prime location. The mall has already attracted a number of tenants, including Carrefour and other major brands. Further, the Al Ain Mall
is being extended and a new smaller shopping centre, attached to the Ayla Hotel, is being opened, which will lead to an increased supply in the retail sector.
Office Rental Rates (AED/m2/pa)
Q2 2011 % Change Q1 – Q2 2011
Type From To From To
New Building, Fitted 1,100 2,000 -8 -
New Building, Shell & Core 900 1,600 - -
Existing Good Quality Building 900 1,250 - -7
Existing Typical Building 700 900 - -18
Existing Low Quality Building 600 750 - -6
Rental rates presented here cover all areas (Town Centre, Al Jimi, Al Khabisi, Al Manasir and Al Nyadat).
Apartment Rental Rates (AED/pa)
1 BR 2 BR 3 BR
Min Max Min Max Min Max
Old Buildings 20,000 25,000 40,000 50,000 50,000 60,000
New Buildings 20,000 25,000 40,000 50,000 50,000 60,000
In respect of new buildings, the above rents are net effective rents excluding service charge.
Villa Rental Rates (AED/pa)
3 BR 4 BR 5 BR
Old Buildings
Town Centre 55,000 72,500 87,500
Other(*) 55,000 72,500 87,500
Zaker 50,000 67,500 82,500
Al Towaya 60000 80000 92500
Al Jimi 55,000 72,500 87,500
New Buildings
Town Centre 70,000 95,000 120,000
Other 70,000 95,000 120,000
Zaker 62,500 85,000 110,000
Al Towaya 75,000 105,000 127,500
Al Jimi 50,000 67,500 82,500
(*) includes Al Khabisi, Al Muwaiji, Al Manasir and Al Masoudi areas.
Retail Rental Rates (AED/m2/pa)
From To Average
Khalifa Street 1,200 2,200 1,700
Aud Al Touba Street 1,200 2,200 1,700
Main Street 1,200 2,200 1,700
Senaya Street 1,000 1,700 1,350
Al Jimi Mall 1,500 3,000 2,250
Al Ain Mall 1,500 3,000 2,250
Al Bawadi Mall 1,500 3,000 2,250
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Apartment Sales Price and % Change (Q1 - Q2 2011)
AED
/m
2A
ED
/m
2/
pa
Min Max
-40%
-20%
0%
20%
40%
60%
80%
Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11
10,2
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11,5
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12,3
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11,2
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12,3
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0%
-7%
-4%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Marina Square Shams Abu Dhabi Al Raha Beach
Average Office Rental Rates (Q2 2011)
Min Max
900
900
900
600 1,
400
1,35
0
1,40
0
1,30
0
0
400
800
1,200
1,600
Khalifa Street Aud Al Touba Street Main Street Senaya Street
Overview
Al Ain Tower – Handover August 2011
Al Ain Tower (previously known as Seba Tower) is located in Khalidiya in walking distance to the Corniche and public beach.
The landmark mixed-use tower extends over 45 floors and provides high-quality office and residential accommodation with a total built-up area of 140,270 square metres and a net leasable area of 82,620 square metres.
All residential units, located on the higher floors (from 19 to 45) come with wrap-around balconies and provide excellent views across the city and the sea.
Facilities and amenities include a rooftop swimming pool, a health club situated on the 46th floor operated by Banyan Tree, a Jacuzzi, a separate children’s pool and play area as well as a jogging track that runs around the perimeter of the roof.
The offices extend from the 7th to 18th floor and benefit from 469 parking spaces, equivalent to a ratio of 1:42 square metres of office space. Retail space is also available on the ground and mezzanine floors.
Project Focus
Unit Type No. of Units Size (m2)
1 BR 104 77
2 BR 156 123 – 157
3 BR 52 192
4 BR 4 530
Offices 6 per floor 222 – 288
Offices 1 per floor 1,709
06 For additional information call +971 2 626 2660 or email [email protected]
Law UpdateExecutive Council Resolution No. (4) of 2011 (“Resolution No. (4)”) now requires the municipalities in the emirate of Abu Dhabi to establish and maintain a register of tenancy contracts of less than four years. These tenancy contracts, whether existing prior to Resolution No. (4) taking effect on 31 January 2011 or entered into after that date, must now be registered. Landlords have until 31 July 2011 to ensure that all registrations have been completed.
If a tenancy contract has not been registered then it will not be recognised for transactions involving any government department, Abu Dhabi Distribution Company (“ADWEC”) or Etisalat. If a tenancy contract is not correctly registered in accordance with Regulation No. (4) then the tenant might experience difficulties when applying for commercial licences and permits from government departments or when opening accounts with ADWEC and Etisalat.
The Municipality of Abu Dhabi City has introduced an online system, known as Tawtheeq, for the registration of letting properties and tenancy contracts. It is the responsibility of the landlord to register all data concerning their property. The landlord will input details of each tenancy contract online and upload a copy of the signed tenancy
contract. Tawtheeq will then send a PDF copy of the registered tenancy contract, which will include an individual bar code, by email to the landlord as an acknowledgement that the registration has been completed.
When the landlord applies to register all the properties he lets with Tawtheeq a registration fee of AED 1,000 per property will be charged. Once the landlord’s properties have been registered the grant, expiry or amendment of all tenancy contracts must be added. The current fee to register the grant of a tenancy contract is AED 100 and the fee to register amendments to a tenancy contract or its expiry is AED 50. It is the landlord’s responsibility to pay these registration fees; however, there is nothing to prevent the landlord passing on the cost to the tenant. New tenants would be wise to check that the landlord has registered the property before signing a tenancy contract in order to avoid difficulties and delays when dealing with ADWEC, Etisalat and government departments.
The above legal information is supplied courtesy of Al Tamimi & Company. (For more information go to www.tamimi.com.)
The graphs below show the current average rental rates (in AED‘000) for apartments and the percentage change in rental rates over the last three months for the different units across the Emirates.
UAE Residential ComparisonA
ED
00
0s
3 BR
AED
00
0s
2 BRAE
D 0
00
s
Studio
AE
D 0
00
s
1 BR
-8%
-2% 0%
-6%
0% 0% 0%
-10%
-6%
0%
-4%
0% 0% 0%
-11% -9%
0%
-4%
0% 0% 0%
-4%
-9%
0% 0% 0% 0% 0%
34
Dubai
52
Dubai
73
Dubai
112
Dubai
44
Abu Dhabi
68
Abu Dhabi
96
Abu Dhabi
128
Abu Dhabi
19
Sharjah
24
Sharjah
31
Sharjah
42
Sharjah
17
Ajman
24
Ajman
27
Ajman
40
Ajman
17
Ras AlKhaimah
23
Ras AlKhaimah
31
Ras AlKhaimah
40
Ras AlKhaimah
19
Fujairah
22
Fujairah
30
Fujairah
41
Fujairah
15
Umm AlQuwain
19
Umm AlQuwain
27
Umm AlQuwain
37
Umm AlQuwain
The number of locations in Dubai has increased from 16 to 22, with the majority of new areas added being affordable developments, which explains the above-average decline.
07www.astecoreports.com
Overview
For additional information call +971 2 626 2660 or email [email protected]
Mortgage Market Update
LENDER (*)
CLIENT TYPEMAXAGE
MAX LOAN
TERM MAX LTVMAX DBR
INTEREST RATE
MIN SALARY INSURANCEPROCESSING
FEEPART
REPAYMENTCLOSURE
Yrs
(AED million)
Yrs % % % (AED/ pm) % % %
ADCBUAE Nationals & UAE Residents
65 salaried; 70 self
employed 10 25
<90 with salary transfer in Abu Dhabi;
<85 with salary transfer in Dubai
<60 6.5-9.5 12,000Not mandatory
for life insurance
1 (no caps)<2 (no fee after
5 years)
3 (if transferred to another lender; no fee after 3 years (if
own funds)
ABU DHABI FINANCE
UAE Nationals, UAE Residents & Non Residents
70 No Limit 30 <85 <55 5.75-8.5 10,000 Mandatory 1-1.25 (no caps)<2 (no fee after
3 years)
4 (if transferred to another lender; no fee after 3 years (if
own funds)
ADIBUAE Nationals & UAE Residents
70 8 25 <90 <60 5.5-8.5 10,000 Mandatory 1 (no caps)
<20 of balance with no charge; anything above
charged at 3
<3
BARCLAYS
UAE Nationals, UAE Residents
& UK Non Residents
65 10 25 <75 <55 5.99-6.99 25,000 Mandatory None<3 (of the
outstanding amount)
<3 (of the outstanding amount)
DUBAI BANK
UAE Nationals & UAE Residents
65 salaried; 70 self
employed 6 25 <85 <60 5.25-6.65 15,000 Mandatory
1 (capped at AED 20,000)
None None
HSBC BANKUAE Nationals & UAE Residents
65 10 25 <75 <60 5.49-5.99 20,000 Mandatory1 (min. AED
5,000) *can be added to loan*
3 (if transferred to another
lender); or AED 2,500 (if cleared with own funds)
Free (min. AED 25,000)
LLOYDS TSB BANK
UAE Nationals & UAE Residents
65 No Limit 20 <70 <40 5.49-7.99 12,000 Mandatory 0-1 (no caps)None (Min.
payment of AED 50,000)
None
MASHREQ BANK
UAE Nationals & UAE Residents
65 salaried; 70 self
employed 10 25 <80 <55 5.49-7.75 18,000 Mandatory
1 (capped at AED 25,000)
<1 (no fee after 2 years)
<1 (no fee after 2 years); 3 (if transferred to
another lender)
NOOR ISLAMIC BANK
UAE Nationals & UAE Residents
65 10 25 <80 <55 5.99-8.2510,000 salaried;
50,000 self employed
Mandatory1 (capped at AED
40,000)
2 (for the term of the mortgage )
2 (if paid from own funds); 5
(if transferred to another lender)
RAKBANKUAE Nationals,
UAE Residents & Non Residents
65 No Limit 25 <80 <58 7.99-10.5 10,000 Mandatory 1-1.251 (if paid from
own funds)1; or 5 (if transferred
to another lender)
STANDARD CHARTERED BANK
UAE Nationals & UAE Residents
70 18 30 <80 <60 5 12,000 Mandatory 1
None (for loans under AED 10 million); 2 (for loans over AED
10 million)
None (for loans under AED 10
million); 2 (for loans over AED 10 million);
5 (if bank buyout)
UNITED ARAB BANK
UAE Nationals & UAE Residents
70 5 25 <85 <65 4.99-5.99 15,000 Mandatory 1
<2 (of the amount repaid/outstanding); 0 (after 5 years)
<2 (for the first 5 years); 0 (thereafter)
1. (*) The above lenders reserve the right to change their product policy, fees and charges, interest rates and other credit-scoring criteria at any time without prior notice.
2. Banks will generally only finance properties from developers on their approved lists.
John Charcol Middle East is an independent mortgage broker based in Dubai. For queries or assistance in relation to mortgages, contact Aimee Garraway at John Charcol Middle East Toll Free on 800 JCME (5263) or +971 (4) 341 7466 if dialling from outside the UAE, or by email to [email protected].
Note:
Over the last three months, local and international lenders in the UAE have continued to strengthen and improve the mortgage products on offer. Lenders who in the previous quarter reduced their rates have kept them low while other lenders are now following suit. Local rates are still around the 4.99% mark for 80% financing, with certain developments availing 85% for expatriates and 90% for UAE nationals, both in Dubai and Abu Dhabi.
There is still great interest from clients wanting to move their existing mortgages from one lender to another, enabling them to take
advantage of the lower rates. For example, clients with an existing mortgage of AED 1.5 million based on a mortgage rate of 7.5% over a 25-year term can reduce their payments by up to AED 2,300 per month if they were to switch to a new rate of 4.99%.
The improvement in mortgage products has not just stopped at interest/profit rates, we have also witnessed a number of lenders either reducing or removing their Early Repayment Charges. This, we believe, will kick start a ‘remortgage market’ and provide clients with the flexibility seen in a more mature market.
Julia Knibbs John StevensBSc MRICS
Brett Whalley Vineet Kumar
Senior Analyst, Abu Dhabi Director - Property Management Head of Corporate Services Head of Business Development
+971 2 626 2660 +971 4 424 9444 +971 4 403 7777 +971 4 403 7777
[email protected] [email protected] [email protected] [email protected]
08 For additional information call +971 2 626 2660 or email [email protected]
John Allen BSc MRICS
Paul Maisfield BSc (Hons) MRICS
Judy Lam Jenny Weidling
Director - Research, Consultancy and Valu-ations
GM & Head of Professional Services, Abu Dhabi
Regional Research Manager Senior Research Analyst, Dubai
+971 4 403 7777 +971 2 626 2660 +971 4 403 7777 +971 4 403 7777
[email protected] [email protected] [email protected] [email protected]
Asteco Property Management LLCWith over 25 years’ experience in the Middle East, Asteco’s Professional Services team brings together a group of the Gulf’s leading real estate experts.
Asteco’s network of offices in Abu Dhabi, Al Ain, Dubai, Northern Emirates, Qatar, Bahrain and Jordan not only provides a deep understanding of local markets but also enables us to undertake large
instructions where we can quickly apply resources to meet the client’s requirements.
Our breadth of experience across all the main property sectors is underpinned by our sales, leasing and property management teams transacting in the market, and a wealth of research that supports our decision making.
Research
Asteco’s Research Department provides investors and developers with essential real estate knowledge to ensure clients understand their com-petitors, target markets and their long-term strategies.
Sales
Asteco’s internationally qualified team has enjoyed over two decades of experience within the highly dynamic Middle East property market.
Consultancy
Asteco’s Consultancy Department provides comprehensive advice on market trends and solid solutions, from project concept to completion. Asteco’s consultancy reports stimulate initial investment to financial institutions and other private equity providers.
Leasing
Asteco is the leading leasing agent in the UAE and is the sole agent for a number of key developments in the region.
Valuations
The team is fully independent in its approach and adheres to the Royal Institution of Chartered Surveyors’ (RICS) valuation standards.
Property Management
Asteco manages some 45,000 leases or approximately 3,500 buildings throughout the UAE, which include corporate portfolios and local and international funds.
DISCLAIMER: The information contained in this report has been obtained from and is based upon sources that Asteco Property Management believes to be reliable, however, no warranty or representation, expressed or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. Asteco Property Management will not be held responsible for any third-party contributions. All opinions and estimates included in this report constitute Asteco Property Management’s judgment, as of the date of this report and are subject to change without notice. Figures contained in this report are derived from a basket of locations highlighted in this report and therefore represent a snapshot of the Dubai market. Due care and attention has been used in the preparation of forecast information. However, actual results may vary from forecasts and any variation may be materially positive or negative. Forecasts, by their very nature, involve risk and uncertainty because they relate to future events and circumstances which are beyond Asteco Property Management’s control. For a full in-depth study of the market, please contact Asteco Property Management’s research team. Asteco Property Management LLC. Commercial Licence No. 218551. Paid-up Capital AED4,000,000.
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Khalifa Bin Zayed St.
Mohd Bin Khalifa St
Ban
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Ardh Jow St
Emirates St
Zayed Bin Sultan St.
Al A
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