Published in January 2010

Country Snapshot:UNITED ARAB EMIRATES

GOLF ADVISORY PR ACTICE IN EMA

ADVISORY

�Abu Dhabi

The UAE economy

Key indicators 2008 2009e 2010f 2011f

Population (mln) 5.6 5.5 5.6 5.7

GDP at current market prices (USD bn) 254.4 225.1 250.1 248.8

Real GDP growth (%) 7.4 -3.5 4.0 5.5

Consumer price infl ation (%)** 15.8 1.5 4.8 7.5

Source: Economist Intelligence Unit, 2009

Golf courses in the UAEThe UAE is considered to be at the forefront of golf development in the Middle East, with more than half of the region’s grass courses situated in the country. The total supply of grass courses in the country amounts to 14.

Golf courses can be found in four of the seven Emirates, but are mainly concentrated in Dubai and in the Emirate of Abu Dhabi. With a few exceptions, these golf courses are typically high-end, integrated developments that also offer a number of other amenities and residential real estate.

Despite having only eight golf courses, Dubai is regarded by many as a world-classgolf destination. Most courses there are designed by signature golf course architects, including Robert Trent Jones II, Ernie El, Colin Montgomerie and Greg Norman.

The Emirate of Abu Dhabi, including Al Ain, does not lag far behind Dubai with three grass golf courses, and an additional two developments planned to be opened in early 2010: the Yas Links Golf facility designed by Kyle Philips and Saadiyat Beach Golf Club designed by Gary Player.

Development of the golf marketTraditionally, golf in the UAE was played on sand covered desert courses. In thelate 1980’s, with the construction of grass courses, rapid development began, fuelled by increasing tourism and the growing number of expatriates residing in the UAE.

By the end of 2009, there were 14 grass golf courses and more than 8,000 registered golfers in the country, which equates to a participation rate of 0.15%.

Rounds and revenuesBoth in terms of rounds and revenues, the UAE is ranked as the highest performer in the EMA region.

According to our Golf Benchmark Survey, rounds played at 18-hole golf courses in the UAE average over 40,000 per year, while revenues achieved are in excess of USD 10 million.

The UAE golf market in 2009

Number of golf courses* 14

Number of registered golfers 8,000

Average golfers per course 533

Golf participation rate (%)** 0.15

* Regular grass golf courses with minimum 9 holes

** Percentage of golfers versus total population

Source: Emirates Golf Federation with KPMG elaboration

*e: estimates, f: forecasts**EU harmonised measure

Membership composition of18-hole courses in the Middle EastGolf courses in the Middle East and, more specifi cally, in the UAE are characterized by a relatively high proportion of corporate members.

© 2010 KPMG Advisory Ltd., a Hungarian limited liability company and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Source: Golf Benchmark Survey

Individual male

47%Co

rpor

ate

mem

bers

31% female 17%

Individual

Junior members 5%

UA

E

Spain

Portugal

Netherlands

Italy

Germ

any

France

England

South

Africa

Sweden

Eastern

Europe

2,340 2,319 2,2401,683 1,557 1,375 1,320 1,236 965 765

9,785 � Total revenues (USD '000)�� Total rounds

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

60,000

50,000

40,000

30,000

20,000

10,000

0

Source: Golf Benchmark Survey

Average revenues (USD ‘000) vs. total rounds played at selected locations – 18 hole courses

* Regular grass golf courses with minimum 9 holes

Grass golf courses in the UAE*, 2009

• Abu Dhabi (2)Al Ain (1) •

Dubai (8) •

Ras Al Khaimah (2) •

Sharjah (1) •

Did you know?• The 2009 season saw three

European Tour events staged in Dubai and Abu Dhabi, which is unparalleled for a country of 5.5 million. Events included the season-closing Dubai World Championship, one of the richest tournaments in the world (USD 7.5 million), the 20-year Dubai Desert Classic, and the Abu Dhabi Golf Championships.

• According to the Golf Benchmark Survey 2007, 18-hole golf courses in the Middle East employ the moststaff in the EMA region: 180 on average.

• In addition to the 8,000 registered golfers, unregistered local players provide a signifi cant amount of local business to UAE golf clubs – the number of unregistered golfers in the country is estimated at more than 15,000.

For further information please contact the Golf Benchmark Team:

KPMG Golf Advisory Practice in EMAH-1139 Budapest, Váci út 99Hungary

Tel: +36 1 887 7100E-mail: info@golfbenchmark.com

PricingIn the high season (winter), UAE green fees rank amongst the highest in the EMA region, averaging USD 200 for 18 holes. During the summer months, due to the extremely hot weather conditions, green fees are heavily reduced.

The vast majority of golf courses require the payment of initiation fees for at least certain types of memberships. High-end facilities in Dubai and Abu Dhabi generally charge USD 4,000-5,000 for joining.

Annual single membership dues at 18-hole courses vary between USD 4,000 and 9,000, depending on the quality of the course and the additional amenities offered in the package.

Golf course development costsAccording to our database of golf course development costs, developing an18-hole golf course in the Middle East is, by a long shot, the most expensive in the EMA region (up to USD 13 million). Some of the differences in cost may be attributed to the typically high-end quality of the facilities and the trend of employing signature designers.

Sustainable golf course development is taking an increasingly important role as courses in the region use up to a million gallons of water every day. Desalination plants and grasses more resistible to salt water are being used increasingly when developing new courses.

Future outlookThe UAE has been at the forefront of golf development in the Middle East, but several countries in the region are now catching up (Oman, for example).

There are up to a dozen golf courses in the planning, design or construction phase in the UAE. Most of these developments however are part of integrated developments supported by the sale of real estate. As a result of the current market conditions, several of these developments have been put on hold or cancelled. It remains to be seen at what pace these golf developments will enter the market in the coming years.

In order to further increase golf demand in the UAE, the key challenge remains involving the local population in the game, in addition to golf tourists and the expat community.

For more information about KPMG’s market intelligence studies, we invite you to visit: golfbenchmark.com

6,1494,866

2,0913,544 3,720

5,357

6,987 7,193

12,996

Thou

sand

s14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

Source: Golf Course Development Cost Survey

Average development cost for a new 18-hole golf course (USD ‘000)

Eastern Northern Central GB & Southern Western Middle Europe Europe Europe Ireland Africa Europe East

� Avergage cost 2008� EMA avergage 2008� EMA avergage 2005

250

200

150

100

50

0

Source: KPMG research

Average green fee for 18 holes in the UAE in the 2009/2010 high season (USD)

66

204

9-hole courses 18-hole courses

© 2010 KPMG Advisory Ltd., a Hungarian limited liability company and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative (“KPMG International”), a Swiss entity.All rights reserved.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.

golfbenchmark.com

In 2006 KPMG launched the inaugural Golf Benchmark Survey (GBS), one of thelargest ever golf research projects. The GBS is a market intelligence study designedto collect and share comparable golf industry benchmarks. The primary objective ofthe Golf Benchmark reports is to allow golf courses to compare their individualperformance against high, average, and low performers in their geographicmarkets. Since its first launch, the survey has been extended to new regionsincluding India, China, Japan, South America and the Caribbean in addition toseveral regional reports within Europe, Middle East and Africa (EMA).

KPMG’s Golf Advisory Practice in EMA has also published a number of additionalmarket intelligence studies under the Golf Benchmark initiative, including the GolfCourse Development Cost Survey in EMA, the Value of Golf to Europe, Middle Eastand Africa, and the Golf Travel Insight report.

For more information on our thought leadership and to download all our reportsfree of charge please visit www.golfbenchmark.com.

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