Chestertons MENA

OBSERVERQ1 2016A B U D H A B I R E S I D E N T I A L

Report HighlightsPrices: A relatively flat quarter for the Abu Dhabi residential market. Villa prices witnessed moderate correction of approximately 2%. Apartments recorded approximately 1% decrease in prices.

Rental: The apartments segment witnessed a 1% rise in the rental rates in the last quarter, primarily due to the lack of supply in the market. Villa segment witnessed a 2% increase.

Yields: Residential yields improved due to rise in rental rates across the city hovering at about 6%.

Supply: The residential market supply continues to remains a pressing issue. New freehold launches are far and few. Affordable segment continues to face supply shortage.

Outlook: Overall market is showing signs of fragmentation, and is expected to enter consolidation mode. Affordable segment continues to be demand, while rental demand for luxury properties may face pressure.

Residential Market Movement - Q1 2016

Key NumbersAED 1,354 / sq.ft.Average sale price of apartments

AED 1,105 / sq.ft.Average sale price of villas

5.5%Average Villa yields

01

The Chestertons MENA OBSERVER | Q1 2016

A B U D H A B I R E S I D E N T I A L

Statistics are based on the areas covered in the report

Villas2%

Apartments1%

Apartments-0.3%

Villas2%

Price Change Rental Change

Q4 2015 Q1 2016 QoQ Change

APARTMENTS- Quarterly Change

Q4 2015 Q1 2016

VILLAS - Quarterly Change

Residential - House Prices

QoQ Change

Price correction: Abu Dhabi apartments witnessed a mixed sentiment in terms of sales prices, with few areas such as Al Bandar witnessing a 4% decline and Al Zeina witnessing a 3% increase in prices. Al Raha Gardens in the villa segment witnessed a 6% increase in sales prices.

Supply: Al Barakah International Investments launched its Dh850-million ($233 million) tourist and entertainment destination, ‘Al Qana’

Outlook: We expect the market to remain in consolidation as economic conditions continue to be uncertain

Market Commentary

03

The Chestertons MENA OBSERVER | Q1 2016

02

AED

/SQ

. FT

AED

/SQ

. FT

Source: Chestertons Analysis

Market Price Points (Q1 2016)

5 BR (Villas)

4 BR (Villas)

3 BR (Villas)

2 BR

1 BR

Studio

All Prices in AEDSource: Property Finder, Dubizzle, Chestertons database

Upper Range

Low Range

A B U D H A B I R E S I D E N T I A L A B U D H A B I R E S I D E N T I A L

Source: Chestertons Analysis

1,56

5 1,77

5

1,48

0

1,03

3

925 1,

388

1,56

0

1,70

5

1,52

0

1,03

0 930 1,

380

Al Muneera Al Bandar Al Zeina Al Ghadeer Al ReefDowntown

Al Reem Island

1,05

0

1,09

0

929

1,71

0

900

1,06

5

1,01

0

990

1,61

0

850

Al Ghadeer Al Reef Al Raha Gardens Saadiyat Island Khalifa City

390,000

650,000

800,000

1,350,000

2,200,000

2,600,000

1,700,000

3,650,000

4,800,000

8,000,000

27,000,000

55,000,000

-5.0%-4.0%-3.0%-2.0%-1.0%

0.0% 1.0% 2.0% 3.0% 4.0%

-10%-8%-6%-4%-2% 0% 2% 4% 6% 8%

APARTMENTS- Quarterly Change

VILLAS - Quarterly Change

Residential - Rental Market

QoQ Change5BR4BR3BR

Rental Price: Rental prices have inched slightly upwards in some areas while other locations continue to be flat. Luxury units could see some pressure on rentals as demand from high-end expatriate serment slows.

Demand: We foresee strong rental demand in Abu Dhabi, particularly for quality buildings in newer areas.

Outlook: Market will look to absorb positively any new residential supply in affordable segment. Rental rates for luxury segment are expected to remain under pressure.

Market Commentary

05

The Chestertons MENA OBSERVER | Q1 2016

04

Source: Chestertons AnalysisFigues in AED '000 p.a

Market Price Points (Q1 2016)

5 BR (Villas)

4 BR (Villas)

3 BR (Villas)

2 BR

1 BR

Studio

All Prices in AEDSource: Property Finder, Dubizzle, Chestertons database

Upper Range

Low Range

QoQ Change

A B U D H A B I R E S I D E N T I A L A B U D H A B I R E S I D E N T I A L

Source: Chestertons AnalysisFigues in AED '000 p.a

118 14

0

118

63 88

103

160 19

5

163

78 11

0 145

203

268

218

133

198

-2%-1% 0% 1% 2% 3% 4% 5% 6%

-

50

100

150

200

250

300

Al Muneera Al Bandar Al Zeina Al Ghadeer Al Reef Downtown

Al Reem Island

3BR2BR1BR

148

153 19

5

340

183

0

175 23

5

463

218

0

200 28

8

550

275

-2%

0%

2%

4%

6%

8%

10%

0

100

200

300

400

500

600

700

Al Ghadeer Al Reef Al Raha Gardens Saadiyat Island Khalifa City

-

40,000

55,000

70,000

110,000

150,000

175,000

110,000

175,000

290,000

350,000

700,000

750,000

Residential - Yields

APARTMENT YIELDS

VILLA YIELDS

RENTAL YIELDS

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

9 2%9

5 1%

6.9%7.7% 7.1%

5.9%5.4% 4.7%5%%%6665.55

%%%5558889 0%98 7%87.2%7 1%79 3%9 %

7 1%7 4%7

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

Source: Chestertons Analysis

Source: Chestertons Analysis

Source: Chestertons Analysis

Source: Chestertons Analysis

07

The Chestertons MENA OBSERVER | Q1 2016

06

Market continues to offer attractive yields to investors, as rental rates witnessed a slight increase last quarter.

Al Reef downtown outperformed by providing highest yields in theapartments and villas segment at 8.9% and 6.9%

Market Commentary

A B U D H A B I R E S I D E N T I A L A B U D H A B I R E S I D E N T I A L

Al Reef Downtown

8.8%

7.0%

6.8%7.7%

8.9%

6.8%4.9%

Al Muneera Al Bandar Al Zeina Al Ghadeer Al Reem Island

Saadiyat Islands

6.6%6.9%

6.0%

5.0% 3.1%

Al Ghadeer Al Reef Al Raha Gardens Saadiyat Island Khalifa City

1BR 2BR 3BR 3 BR(Villas)

4 BR(Villas)

5 BR(Villas)

Chestertons MENA

OBSERVER