Property Review UAE Real Estate Report Q4 2019 · Zaweya Real Estate Development, Al Maryah Vista...
Transcript of Property Review UAE Real Estate Report Q4 2019 · Zaweya Real Estate Development, Al Maryah Vista...
Property Review
UAE Real Estate ReportQ4 2019
CONTENT
03EDITORIAL NOTE
04ABU DHABI
14DUBAI
25NORTHERN
33AL AIN
40UAE PRICE COMPARISON
42OXFORD ECONOMICS
EMIRATES
43AL TAMIMI & CO.
JOHN STEVENSMSC, BSC (HONS), MRICS
Managing Director /Director - Asset Management
As regional/global economic and geo-political headwinds prevail, the UAE continues to roll out strategies and initiatives aimed at diversifying the economy, building resilience and improving the UAE’s competitiveness on the global stage.
This report looks back at the changes that have occurred in Dubai, Abu Dhabi, Al Ain and the Northern Emirates since 2009, and provides Asteco’s opinion on the prospects for 2020 and beyond.
2019 HIGHLIGHTS
Although Sales prices and Rental rates remained in contraction, the Real Estate market continued to mature throughout 2019.
Whilst the Leasing sector benefited from the implementation of direct debit and credit checks, the Sales market profited from the launch of the Real Estate Investment Opportunities (REIOs) initiative (aimed at attracting a wider range of Real Estate Investors to the Emirate), under which several investment products will be offered including:
• Collective Real Estate investment funds;• Partial title deeds procedures;• A Lease-to-Own system; and• Investment portfolio applications.
Another notable announcement of 2019 was the formation of the Higher Real Estate Planning Committee. The new committee, comprising leading government and industry figures, has been tasked to deliver a more sustainable balance between supply and demand.
These establishments were welcomed by industry leaders and participants; however, the effect of these new policies and initiatives are expected to take a couple of years to filter through before they have a meaningful impact on the market.
A more direct and immediate impact for Tenants and Investors was the rise in the number and range of incentives offered by Landlords and Developers.
Investors profited from absorbed Agent fees, reduced/no down-payments and flexible/longer post-handover payment terms.
In fact, the Dubai Land’s Department (DLD) recorded transaction volumes at an 11-year high in 2019, assisted by increased affordability, improved sentiment and more flexibility. It should be noted, however, that this figure includes newly registered units that could have been sold previously, meaning an increased number of handovers would result in a rise in ‘transaction volumes’.
Tenants, on the other hand, benefitted from rent-free periods of up to 3 months, the waiver of agency/administration fees, lower or deferred security deposits, and the absorption of relocation, utility and/or maintenance charges, as well as gift vouchers.
In an increasingly competitive market, the importance of professional property management and maintenance services has become increasingly crucial and will help proactive Landlords differentiate themselves from the competition.
2020 OUTLOOK
2020 looks to build on the wide ranging stimulus packages, budgets and reforms announced in 2018/19. These included Abu Dhabi’s AED 50 billion ‘Ghadan 21’*, improvements to property laws and visa regulations, as well as Dubai’s largest-ever annual budget worth AED 66.4 billion for 2020 (as part of the wider AED 196 billion, 3-year Plan (2020 – 2022)). The initiatives seek to boost the economy as a whole and support the much anticipated launch of Expo 2020.
Expo 2020 is anticipated to improve overall market sentiment, particularly with the inflow of a significant number of short term visitors. There has been much speculation and discussion over whether these short term guests can be converted to long term Residents.
Irrespective, the lead-up to and execution of the exhibition has and will continue to showcase the UAE and help project the national brand onto the global stage. Again, there has been much speculation on how this may result in a rise in foreign direct investment (FDI) in the short term.
Whilst the ownership structure and the ability to buy income-generating property at a good yield, without capital gains tax and property tax, represent excellent opportunities for international Investors, the UAE is in need of wealth-creating industries in order to generate employment/business opportunities and increase its population.
On a local level, lowering the entry point for secondary property mortgages and balancing new supply will remain the most challenging task for 2020.
On a global scale, prolonged geo-political and trade tension could have an adverse effect on the economy and ultimately the Real Estate market in the UAE.
MEDIUM TO LONG TERM OUTLOOK
With the recent Tender approval for the civil works and construction of package D of stage two of the UAE’s national railway (worth AED 4.6 billion and stretching over 145 km), the UAE will further manifest itself as a leading land-sea-air multimodal transport hub connecting the Far East with the West, and thus attract human and physical capital with a long term view on living, investing and doing business in the country. Stage D will connect key ports in Fujairah and Khorfakkan to manufacturing, production and population centres at the Dubai border with Sharjah. On completion in 2024, the network will link Saudi Arabia to the UAE and Oman.
In addition, China’s Belt and Road Initiative (BRI), which was launched in 2013 to develop a modern-day version of the land-based Silk Road Economic Belt and the Maritime Silk Road of the 21st Century, will promote the UAE as an international trading hub.
These large-scale infrastructure projects, coupled with the advancing regulatory, financial and physical developments on a local and federal level will ensure a positive future outlook for the UAE.
* See page 5 for further details.
3
EDITORIAL NOTE
Abu DhabiTHE CAPITAL CITY
RECESSION
2009-2011
RECOVERY AND GROWTH
2012-2014STABILISATION
2015DOWNTURN
2016-2019• Rapid Real Estate demand growth in an
undersupplied market was followed by substantial corrections in Rental rates and Sales prices, which dropped in excess of 60% from their peak in Q4 2008 as a result of the global financial crisis.
• The decline in Rental rates led to a strong Leasing market with increased internal Tenant movement to quality properties.
• Transaction levels picked up towards the end of 2011 leading to take-up of new Residential properties in well planned projects.
• However, with the amount of stock available, Salesprices continued to decline.
• Subdued business growth put pressure on the Office market resulting in decreased Rental rates across all quality grades.
• The market began to show signs of recovery in 2012 and rates stabilised throughout the year. Asteco recorded a marked increase in Rental rates and Sales prices from the end of 2012 due to improved sentiment.
• Several new prime and high end projects were handed over during this period. As a result, rates for inferior quality stock advertised at above market averages corrected.
• Internal Tenant movement and flight-to-quality prevailed as people took advantage of the options available.
• Transaction levels improved in line with increased job security and market confidence leading to Tenancy upgrades and a rise in home ownership.
• Off-plan Sales also recommenced during 2013 and 2014.
• Residential Sales prices rose considerably by approximately 50% compared to their lowest point.
• The Office market was relatively stable, with lower quality space noting marginal declines whilst superior units recorded minimal increases.
• Limited new supply resulted in moderate increases in Rental rates and Sales prices in 2015, especially during the first half of the year, whilst remaining broadly stable thereafter.
• The drop in oil prices prompted a general slowdown in Investment, whilst Sales demand focused on completed rather than off-plan properties.
• Several Residential projects were launched between 2016 and 2019, recording high demand levels.
• More than 18,400 Residential units were delivered, putting further downward pressure on Rental rates and Sales prices, particularly for completed projects.
• As a result, Apartment and Villa Rental rates recorded an average decrease of 29% and 20%, respectively, since the end of 2015, whilst Sales prices declined by 29% and 11%.
• Transaction volumes for newly launched projects offering competitive Sales prices and payment plans increased. Demand for completed projects, on the other hand, softened mainly due to the high down payment required by the Central Bank.
• The Abu Dhabi Development Accelerator Programme ‘Ghadan 21’, a three year (2019 - 2021), AED 50 billion economic development strategy, was launched in 2018 with the aim to stimulate business and investment growth.
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Apartment Sales Apartment Rentals Villa Rentals Office Rentals
ABU DHABI | HISTORIC REVIEW
Mar Jun Dec DecDec Sep SepSep Mar MarMar Jun JunJunSep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep Dec
2009 2010 2011 2012 2013 2014 2015 2016 2018 20192017
Abu Dhabi Real Estate Report - Q4 20195
APARTMENTSNO. OF UNITS
VILLASNO. OF UNITS
OFFICESSQ.M.
COMPLETED IN COMPLETED IN EXPECTED IN
Abu Dhabi Real Estate Report -
4,100 1,100 8,700
1,050 350 1,800
45,000 5,000 40,000
Q1 - Q3 2019 Q4 2019 2020
Q4 20196
ABU DHABI SUPPLY
T RE NDS SALES PRICES RENTAL RATES PROJECT LAUNCHES INCENTIVES SUPPLY DEMAND - OFF PLAN
DEMAND - COMPLETED
Abu Dhabi Real Estate Report -
SUPPLY*
RENTAL RATES
SALES PRICES
2019 HIGHLIGHTS 2020 OUTLOOK
•
•
•
2019 recorded the delivery of circa 6,500 Residential units, comprising 5,200
Apartments and 1,400 Villas.
Approximately 50,000 sq.m. of Office space was handed over this year including, but
not limited to Al Jewn Tower (in Danet Abu Dhabi), SADEM on Al Raha Beach, a new
Office complex in Rawdhat and Al Wafra Square on Al Reem Island.
Residential project launches included Saadiyat Grove, Al Reeman Phase II, Saadiyat
Reverve and Lea by Aldar, Al Jurf by IMKAN, Al Jubail Island, Wahat Yas by Wahat Al
Zaweya Real Estate Development, Al Maryah Vista by Webridge Properties, as well as a
new Residential development on Yas Island by Siadah Development.
•
•
•
Apartments and Villas recorded average annual Rental declines of 7% and 4%,
respectively. This is predominantly due to the overall supply-demand imbalance.
Interest in new Office space was limited resulting in an overall drop in Rental rates of
6% over the year. Several Grade B Commercial buildings, however, recorded
decreases of 8% to 10%.
Multiple cheque payments and rent-free periods have become the norm, particularly
in the lower to mid end market.
•
•
•
Although Sales volumes for completed Apartments remained subdued, demand for
Villa plots within Aldar projects such as Al Reeman Phase II, Saadiyat Reserve and Lea
remained strong.
Average Apartment Sales prices decreased by 8% in 2019, with some highly priced
projects decreasing between 15% and 20%.
The decline in Villa Sales prices was less pronounced at approximately 4%, with Al
Reef Villas recording the most prominent drop.
•
•
Approximately 10,500 Residential units are anticipated for completion in 2020. The
majority of the upcoming supply is located within the following Investment Zones:
- Reem Island - 1,850 units;
- Al Raha Beach - 3,800 units;
- Yas Island - 1,300 units; and
- Saadiyat Island - 240 units.
Similar to previous years, a number of projects are expected to be delayed and will
ultimately spill over into 2021.
•
•
Upcoming supply during a period of subdued demand will exert further pressure on
Rental rates for all asset classes.
Residential and Commercial Landlords will continue to offer discounted rates,
incentives and flexible payment terms.
•
•
•
Further Sale price declines are expected for the Residential sector in 2020.
The proposed Rent-to-Own scheme available for a selection of Aldar projects is
expected to boost interest.
Similar to 2019, Buyer demand will continue to focus on competitive price points and
attractive payment plans for off-plan and near complete projects offered by major
Developers.
2019
2020
Q4 20197
* It is important to note that whilst a number of projects may have received completion certificates, Asteco does not consider a project delivered until the handover process has been initiated, or the units are available for lease in the open market.
ABU DHABI HIGHLIGHTS AND OUTLOOK
ABU DHABI ISLAND
INVESTMENT AREA
(All figures in AED 000’s p.a.)
PRIME PROPERTIES
HIGH END PROPERTIES
ABU DHABI ISLAND
Central Abu Dhabi
Corniche
Khalidya / Bateen
INVESTMENT AREA
Al Raha Beach
Marina Square
Saadiyat Beach
Shams Abu Dhabi
TYPE 3 BEDROOMS2 BEDROOMS1 BEDROOM
MID TO LOW END PROPERTIES
ABU DHABI ISLAND
Central Abu Dhabi
Corniche
Khalidiya / Bateen
INVESTMENT AREA Al Reef
OFF ISLAND Khalifa & MBZ City
ABU DHABI AVERAGE
ANNUAL % CHANGE
% CHANGE SINCE PEAK (2008)
% CHANGE SINCE MARKET LOW (2012)
% CHANGE SINCE 2ND PEAK (2015)
Abu Dhabi Real Estate Report -
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
- - - - 125 125 125 128 123 108 108
- - - 120 130 130 140 145 145 138 128
- - - - 156 165 175 191 178 156 140
- - - 165 165 165 180 193 185 183 170
- - - - 230 235 265 275 253 215 203
- - - 220 250 255 255 275 248 240 235
165 110 90 80 85 85 90 95 90 85 80
185 135 120 95 85 105 120 120 90 88 83
185 135 120 90 85 105 120 123 113 98 85
- - 110 110 100 100 110 115 110 103 90
- - - - 80 85 100 105 98 85 70
- - - - - 110 120 130 120 113 103
- - - 95 95 110 115 115 98 80 73
250 140 140 130 110 135 145 150 139 123 106
280 160 160 155 125 135 150 153 138 123 113
280 160 160 140 125 155 160 165 146 123 113
- - 155 145 140 150 155 161 155 143 130
- - - - 110 130 140 148 133 115 108
- - - - - 150 175 179 174 167 148
- - - 130 130 150 175 154 143 113 106
290 175 175 160 130 165 175 177 170 155 148
365 240 240 225 180 225 245 243 203 173 145
365 230 230 190 155 210 215 213 190 173 158
- - 205 200 185 190 200 205 190 175 170
- - - - 140 170 175 185 175 155 140
- - - - - 190 210 233 213 200 175
- - - 165 165 170 195 193 173 150 140
145 85 70 60 55 70 75 76 75 68 55
155 120 95 80 70 80 80 86 85 74 63
215 120 100 80 100 100 105 103 103 82 73
225 145 145 120 100 105 120 125 115 105 91
265 145 145 110 90 140 145 148 133 122 105
325 175 175 155 130 155 170 165 148 127 115
155 120 100 75 65 80 80 81 79 71 58 225 130 130 95 90 110 120 121 111 95 80 325 170 170 125 110 135 145 146 138 123 109
- - - - 60 70 80 83 79 67 59 - - - - 75 85 100 104 103 88 73 - - - - 90 100 130 130 120 109 95
- 75 55 40 40 60 65 70 70 58 53 - 90 60 45 45 85 90 95 94 84 74 - 115 80 70 65 110 120 126 124 114 104
165 111 95 85 83 94 101 105 98 88 79 246 135 131 121 113 130 141 146 137 121 109 323 179 178 162 148 175 189 194 177 159 146
- -32% -15% -11% -2% 14% 8% 4% -7% -10% -10% - -45% -3% -8% -6% 15% 8% 4% -6% -11% -10% - -45% -1% -9% -9% 18% 8% 3% -9% -10% -8%
-55%
-11%
-30%
-58%
-9%
-29%
-57%
-5%
-28%
2019
98
125
75
78
80
83
69
85
71
51
61
53
54
50
74
-7%
2019
138
169
103
105
105
123
99
138
105
66
81
74
70
72
103
-5%
2019
203
235
140
143
148
168
135
160
140
93
106
101
88
103
140
-4%
Q4 20198
ABU DHABI APARTMENT RENTAL RATES
MA
RIN
A S
QU
AR
E
YA
S I
SL
AN
D
AL
ZE
INA
TH
E G
AT
E
AL
MU
NE
ER
A
SU
N &
SK
Y T
OW
ER
S
AL
BA
ND
AR
RE
EF
DO
WN
TO
WN
AED per sq.ft.
0 0500 5001,000 1,0001,500 1,5002,000 2,0002,500 2,500
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1,750
1,350
1,300
1,225
1,100
1,425
1,550
1,650
1,700
1,600
1,425
1,300
500
550
825
1,000
1,025
975
875
800
750
1,750
1,100
900
975
925
1,175
1,425
1,500
1,500
1,275
1,275
1,125
2,450
1,250
1,250
1,130
1,050
1,325
1,475
1,500
1,400
1,275
1,100
950
1,750
1,100
900
1,015
930
1,175
1,200
1,300
1,300
1,225
1,100
950
1,175
1,475
1,500
1,375
1,225
1,100
950
2,000
1,025
1,025
1,000
965
1,175
1,375
1,375
1,250
1,100
950
940
1,400
1,100
Abu Dhabi Real Estate Report - Q4 20199
ABU DHABI APARTMENT SALES PRICES
ABU DHABI ISLAND
Khalidiya / Bateen
Mushrif / Karama / Manaseer
Nahyan Camp / Muroor
INVESTMENT AREA
Al Raha Beach
Al Reef
Hydra Village
Saadiyat Island - Beach Villas
Hidd Al Saadiyat
OFF ISLAND
Al Raha Gardens
Golf Gardens
Khalifa City
Mohamed Bin Zayed
(All figures in AED 000’s p.a.)
ABU DHABI AVERAGE
ANNUAL % CHANGE
% CHANGE SINCE PEAK (2008)
% CHANGE SINCE MARKET LOW (2012)
% CHANGE SINCE 2ND PEAK (2015)
TYPE 5 BEDROOMS4 BEDROOMS3 BEDROOMS
Abu Dhabi Real Estate Report - Q4 201910
2008 20192009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20182019 2019
395 275 235 210 190 185 185 185 185 170 168
390 235 220 180 170 195 180 170 170 165 165
163
158
365 260 250 195 175 170 160 160 158 148 145
- - - - 220 250 250 255 205 185 185
- - 115 130 105 120 135 145 140 123 110
143
178
100
- - - - - 90 90 103 105 93 84
- - - - 275 295 295 310 310 300 298
- - - - - - - - - - -
380 205 185 175 165 175 190 193 183 173 158
- - 265 240 190 210 225 225 220 215 183
73
295
-
143
185
360 190 155 125 100 130 135 133 133 125 125
- - 170 110 95 123 108 108 108 108 108
378 233 202 173 168 177 178 180 174 164 157
- -38% -13% -14% -3% 6% 0% 2% -3% -6% -4%
-60%
-10%
-17%
-4%
118
103
150
460 290 310 225 230 240 230 225 195 180 175
455 270 260 230 210 190 190 185 185 175 168
430 290 283 210 210 213 200 200 190 173 160
- - - - 300 255 255 263 250 240 228
169
160
158
225
- - 140 155 125 150 160 168 163 150 139
- - - - - - - - - - -
- - - - 305 295 330 375 375 335 325
- - - - - - - - - - 320
420 230 210 210 200 210 243 245 218 188 175
- - 200 285 260 255 260 260 253 235 195
133
-
315
310
153
195
400 205 180 150 135 170 150 150 150 140 130
- - 195 135 128 145 140 140 140 130 125
433 257 224 203 208 214 214 219 211 195 181
- -41% -13% -9% 2% 3% 0% 2% -4% -7% -7%
-60%
-16%
-21%
-4%
120
118
174
530 325 330 280 255 270 245 240 220 203 200
535 315 345 260 240 250 265 255 233 198 188
535 290 325 268 265 250 260 260 228 185 183
- - - - - 320 320 320 310 275 260
195
183
170
258
- - 165 175 150 170 190 190 180 163 150
- - - - - - - - - - -
- - - - 400 400 400 450 450 450 450
- - - - - - - - - - 540
475 240 260 270 270 285 290 290 250 215 205
- - 345 335 340 325 325 325 305 270 255
145
-
450
530
198
245
445 255 220 180 170 185 180 180 165 153 148
- - 205 153 140 175 168 168 158 155 143
504 285 278 244 253 263 276 267 247 225 217
- -43% -2% -12% 3% 4% 5% -3% -8% -9% -4%
-58%
-17%
-21%
-2%
148
133
211
ABU DHABI VILLA RENTAL RATES
HY
DR
A V
ILL
AG
EH
IDD
AL
SA
AD
IYA
TG
OL
F G
AR
DE
NS
SA
AD
IYA
T B
EA
CH
VIL
LA
SW
ES
T Y
AS
AL
RE
EF
VIL
LA
S
RA
HA
GA
RD
EN
S
AED per sq.ft.
0 0500 5001,000 1,0001,500 1,5002,000 2,0002,500 2,500
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
950
600
560
520
540
745
845
835
800
750
660
600
1,190
900
825
770
730
890
1,115
1,115
1,050
985
870
770
1,200
860
850
810
770
870
1,020
1,020
960
940
920
910
1,375
1,550
1,550
1,550
1,535
1,440
1,400
1,300
1,300
850
850
600
660
660
630
565
530
510
Abu Dhabi Real Estate Report - Q4 201911
ABU DHABI VILLA SALES PRICES
(All figures in AED per sq.ft. p.a.)
TYPE
* Includes developments such as Al Maryah Island, Aldar HQ, International Tower, Nation Towers, Ittihad Towers, etc.
** The average percentage change calculation excludes Prime Stock
FITTED*
FITTED
SHELL AND CORE
GOOD
TYPICAL BUILDING
ABU DHABI AVERAGE**
ANNUAL % CHANGE
% CHANGE SINCE PEAK (2008)
% CHANGE SINCE MARKET LOW (2012)
% CHANGE SINCE 2ND PEAK (2015)
PRIME PROPERTIES
QUALITY STOCK
MATURE STOCK
Abu Dhabi Real Estate Report -
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
- - - - - - 215 215 210 190 190
320 179 156 135 111 114 111 118 104 100 94
- - 125 107 91 91 91 95 84 81 79
228 154 111 98 81 79 79 79 79 71 66
135 129 93 65 65 65 67 67 67 60 58
228 154 121 101 87 87 87 90 83 78 74
- -32% -21% -16% -14% 0% 0% 3% -7% -6% -5%
-69%
-20%
-22%
177
-6%
91
71
64
53
70
2019
Q4 201912
ABU DHABI OFFICE RENTAL RATES
Abu Dhabi Real Estate Report -
1 Al Bandar – Raha Beach
2 Al Bateen Wharf
3 Al Gurm
4 Al Maqtaa
5 Al Muneera – Al Raha Beach
6 Al Nahyan Camp
7 Al Raha Gardens
8 Al Rayanna
9 Al Reef
10 Al Zeina – Al Raha Beach
11 Baniyas
12 Bateen Airport Area
13 Bateen Area
14 Bawabat Al Sharq
15 Capital District (ADNEC)
16 CBD / Tourist Club Area
17 Corniche
18 Danet Abu Dhabi
19 Eastern Mangroves
20 Golf Gardens
21 Hydra Village
22 Khalidia / Al Hosn / Al Manhal
23 Khalifa City A
24 Khalifa City B
25 Maryah Island
26 MBZ City
27 Mina
28 Mushrif / Karama / Manaseer / Muroor
29 Officer’s City30 Rawdhat Abu Dhabi
31 Reem Island - Marina Square
32 Reem Island – Najmat Abu Dhabi
33 Reem Island – rest of Shams Abu Dhabi
34 Reem Island – City of Lights
35 Reem Island – The Gate District
36 Rihan Heights
37 Saadiyat Beach District
38 The Hills
YASISLAND
14
11
17
13
2
22
31
25
19
33
35
34
32
37
36
38
29
15
18
28
24
6
12
4
26
2320
8
1
7
10
9
5
30
27
16
3
21
33
11
11
22
Q4 201913
ABU DHABI PROPERTY MAP
DubaiTHE CITY OF INNOVATION
RECESSION
2009-2011
RECOVERY AND GROWTH
2012-2013STABILISATION
2014-2015DOWNTURN
2016-2019• The Dubai Real Estate market has gone through
significant fluctuations over the years. Following the introduction of a decree allowing International Freehold Ownership in 2002, the market recorded rapid growth up until Q1 2009.
• This period was marked by large scale developments and project launches. The Real Estate market was fuelled by both strong demand from a rapidly expanding economy and workforce (leading to double digit Rental growth and Investor returns) and, more problematically, Investor speculation.
• With the onset of the global financial crisis, loss of confidence, erosion of capital and drying-up of liquidity, speculators were driven from the market. This resulted in significant value contractions and ultimately the collapse of fundamentals underpinning the Real Estate market.
• Asteco also recorded noticeable Tenant migration from neighbouring Emirates due to decreased Rental rates in Dubai.
• Sales activity remained subdued although transaction levels picked up slightly by the end of 2011.
• Many projects were delayed, put on hold or cancelled.
• The market began to show signs of recovery in 2012 when the Euro Crisis and Arab Spring conflict led to Dubai being an attractive alternative and ’safe’ haven to invest and live in.
• In November 2013, Dubai was awarded to host Expo 2020, which led to growth in market confidence, a rise in new project launches and increased Sales prices and Rental rates.
• Whilst increased job security and market confidence created demand for Tenants to upgrade, rapid Rental growth also restricted Residents to move within Dubai and thus resulted in an upsurge in relocations to the Northern Emirates in search of more affordable housing.
• In anticipation of the growing Investor demand, the Dubai Government doubled the land registration fee to 4%, and introduced new loan-to-value rules to limit property speculation.
• The market peaked in Q2 2014 and corrected thereafter due to a combination of factors such as the reduction in LTVs, low oil prices and a strong US Dollar.
• Rental rates remained broadly stable as the handover of new supply was slower than anticipated.
• Due to the substantial number of launches witnessed in the previous years, concerns of an oversupply and lack of demand particularly for high end properties motivated Developers to focus on the mid and affordable housing sector, and to offer incentives such as extended payment plans during the post-completion stage.
• Lower deposits also made off-plan Sales a more attractive option compared to the minimum 25% down payment required for a mortgaged property.
• 2016 and 2017 recorded a significant amount of new project launches and deliveries resulting in steady declines in Sales prices and Rental rates. Whilst new project announcements eased off in 2018 and 2019, additional supply continued to have a downward effect on rates.
• The number and range of incentives increased as Landlords tried to retain Tenants and increase take-up, whilst Developers tried to motivate Buyers.
• A market driven by Tenants and Investors and an increased number of people looking for value-for-money options resulted in affordable developments outperforming luxury accommodation in terms of transaction activity.
• Developers increasingly offered smaller, off-plan units at lower price points with flexible post-completion payment plans, which resulted in an increase in first-time Buyers and End-users as home ownership became more accessible to people who were previously unable to jump on the property ladder due to high down payments.
• Initially, this resulted in a drop in demand for completed properties, but the slowdown in new project launches and the increased affordability led to a rise in transaction volumes in the secondary market .
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DUBAI | HISTORIC REVIEW
Apartment Sales Villa Sales Office Sales Apartment Rentals Villa Rentals Office Rentals
Mar Jun Dec DecDec Sep SepSep Mar MarMar Jun JunJunSep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep Dec
2009 2010 2011 2012 2013 2014 2015 2016 2018 20192017
Dubai Real Estate Report - Q4 201915
APARTMENTSNO. OF UNITS
VILLASNO. OF UNITS
OFFICESMILLION SQ.FT.
COMPLETED IN COMPLETED IN EXPECTED IN
Dubai Real Estate Report -
15,600 8,000
4,700
Q1 - Q3 2019 Q4 2019 2020
39,000
2,700 10,600
1.85 1.25 2.5
Q4 201916
DUBAISUPPLY
TRENDS SALES PRICES RENTAL RATES PROJECT LAUNCHES INCENTIVES SUPPLY DEMAND - OFF PLAN
DEMAND - COMPLETED
Dubai Real Estate Report -
SUPPLY*
RENTAL RATES
SALES PRICES
2019 HIGHLIGHTS 2020 OUTLOOK
•
•
•
A total of 31,000 Residential units were handed over in 2019, comprising
approximately 23,600 Apartments and 7,400 Villas, with communities such as Damac
Hills, Dubai Hills Estates and Akoya Oxygen accounting for the bulk of completions.
The Commercial sector recorded the delivery of circa 3.1 million sq.ft. of new Office
space.
Whilst construction activity for committed projects continued, the pace of new
launches, particularly from secondary Developers, eased over 2019 in response to
lower demand and growing supply.
•
•
•
Although Dubai’s Real Estate market continued to mature throughout 2019 in line
with increased transparency and improved regulatory conditions, Rental reductions
remained commonplace in the majority of developments.
However, these lower Rental rates also enabled more Tenants to upgrade in terms of
size, quality and/or location.
Apartments, Villas and Offices recorded average declines of 11%, 10% and 12%,
respectively.
•
•
•
•
Apartment, Villa and Office Sales prices continued their downward trajectory during
2019, declining by an average of 13% to 15%.
Increased affordability opened the market to a wider Investor pool and facilitated a
rise in End-users and first time Buyers.
Asteco noted a marked rise in enquiries with focus on affordable properties.
In fact, according to Dubai Land’s Department (DLD) data, transaction volumes
recorded an 11-year high in 2019.
•
•
•
New supply for 2020 is estimated at close to 50,000 units and 2.5 million sq.ft. of
Office space, although, similar to previous years, some of this is expected to spill over
into 2021.
We will continue to see project launches from Master Developers with
construction-linked and post-completion payment plans.
Calls from industry leaders/experts for a short term curb on new projects in order to
restore the supply-demand balance are expected to increase.
•
•
With more supply expected for handover in 2020, retention will become increasingly
important and can be achieved through competitive rates/incentives and
proactive/professional Property Management.
Nonetheless, further pressure on Rental rates across all asset classes is expected for
the year as economic uncertainties limit newcomers to the market.
•
•
•
Whilst Rental rates are expected to contract further, Sale price declines are likely to
ease in 2020, particularly for newly launched projects, as development costs are
approaching the lowest practical level.
Secondary property prices are, however, expected to record additional drops.
Developers, banks and other financial institutions will need to lower entry points to
boost Sales.
2020
2019
Q4 201917
* It is important to note that whilst a number of projects may have received completion certificates, Asteco does not consider a project delivered until the handover process has been initiated, or the units are available for lease in the open market.
DUBAIHIGHLIGHTS AND OUTLOOK
DIFC
DOWNTOWN DUBAI
PALM JUMEIRAH
SHEIKH ZAYED ROAD
BUSINESS BAY
DUBAI MARINA
GREENS
JUMEIRAH BEACH RESIDENCE
JUMEIRAH LAKES TOWERS
DEIRA
DISCOVERY GARDENS
DUBAI SPORTS CITY
INTERNATIONAL CITY
JUMEIRAH VILLAGE
(All figures in AED 000’s p.a.)
HIGH TO LUXURY END
MID TO HIGH END
AFFORDABLE
TYPE 3 BEDROOMS2 BEDROOMS1 BEDROOM
DUBAI AVERAGE
ANNUAL % CHANGE
% CHANGE SINCE PEAK (2008)
% CHANGE SINCE MARKET LOW (2011)
% CHANGE SINCE 2ND PEAK (2014)
Dubai Real Estate Report -
- - - 73 80 103 113 113 105 100 90 - - - 115 130 158 173 158 160 145 120 - - - 145 170 198 235 230 190 190 175
133 85 70 68 80 98 118 115 115 95 83 185 120 100 100 125 160 170 175 160 130 115 275 165 150 150 180 228 245 240 225 190 170
200 113 90 90 95 135 150 135 130 110 98 228 145 120 120 140 175 208 198 175 155 138 300 200 170 170 190 223 243 255 235 200 180
160 83 70 68 83 98 113 100 95 90 80 203 130 105 100 110 148 148 130 125 115 110 290 175 120 120 135 195 200 175 165 150 125
- - 55 45 60 90 93 93 85 70 65 - - 85 70 85 130 135 135 125 105 90 - - 115 100 125 178 180 185 170 150 140
130 78 63 63 75 105 113 98 90 70 68 180 110 90 80 100 140 158 143 125 105 98 245 160 125 115 135 178 210 205 190 155 145
120 65 58 55 65 85 83 95 95 75 68 160 88 78 75 100 135 148 143 130 115 100 180 130 115 105 130 155 173 175 175 145 135
115 85 73 70 80 108 118 115 105 95 80 168 118 95 90 100 135 163 148 140 115 103 203 148 115 110 140 175 200 193 185 160 140
110 65 50 45 55 83 90 90 75 65 58 160 85 65 65 75 110 133 125 115 95 83 210 118 85 85 100 148 168 153 150 130 110
88 48 40 37 35 68 65 65 60 50 48 103 55 55 53 53 85 90 90 85 70 63 138 83 75 70 75 135 133 113 115 95 88
100 58 45 38 45 70 70 72 65 55 48 135 85 70 53 70 83 80 80 85 85 83 - - - - - - - - - - -
- - - 35 40 59 65 74 65 55 48 - - - 45 55 88 98 105 90 75 68 - - - - - - - - 125 100 85
70 44 27 23 24 43 46 50 45 40 35 93 63 39 53 38 65 63 65 63 55 53 - - - - - - - - - - 75
- - - 35 45 70 65 73 60 55 50 - - - 53 70 95 103 105 95 80 70 - - - 80 90 120 130 138 135 110 100
118 68 57 53 61 85 91 90 85 74 65 157 96 82 75 88 118 127 127 118 102 91 216 131 114 107 128 159 170 172 162 142 127
- -42% -16% -7% 15% 39% 7% -1% -6% -13% -12% - -39% -14% -8% 16% 35% 8% 0% -7% -14% -11% - -39% -13% -6% 19% 24% 7% 2% -6% -13% -11%
-51%
9%
-36%
-47%
11%
-35%
-47%
7%
-33%
2008 20192009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20182019 2019
85
-10%
73
90
73
58
58
58
70
55
43
40
40
30
40
58
110
-9%
105
128
98
90
90
93
93
70
55
75
60
45
58
83
150
-10%
158
158
115
120
130
120
125
100
85
-
75
70
80
114
Q4 201918
DUBAIAPARTMENT RENTAL RATES
DO
WN
TO
WN
DU
BA
I
INT
ER
NA
TIO
NA
L C
ITY
PA
LM
JU
ME
IRA
H
DIS
CO
VE
RY
GA
RD
EN
S
GR
EE
NS
JUM
EIR
AH
VIL
LA
GE
DIF
C
DU
BA
I S
PO
RT
S C
ITY
JUM
EIR
AH
LA
KE
S T
OW
ER
S
BU
SIN
ES
S B
AY
DU
BA
I M
AR
INA
JUM
EIR
AH
BE
AC
H R
ES
IDE
NC
E
AED per sq.ft.
0 500 1,000 1,500 2,000 3,0002,500 0 500 1,000 1,500 2,000 3,0002,500 0 500 1,000 1,500 2,000 3,0002,500
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2,050
1,000
750
700
900
1,225
1,300
1,210
1,300
1,175
975
900
1,800
1,100
1,000
925
1,050
1,900
1,750
1,600
1,450
1,250
1,125
1,000
2,000
1,100
925
925
1,000
1,525
1,625
1,370
1,300
1,200
1,025
925
2,700
1,600
1,500
1,300
1,350
1,875
1,875
1,700
1,750
1,650
1,425
1,300
1,600
700
550
550
600
825
975
950
900
850
725
600
1,400
850
700
650
750
1,200
1,250
1,150
1,150
1,125
975
850
1,250
550
500
450
450
825
885
850
855
800
650
525
1,700
1,050
825
775
950
1,400
1,375
1,365
1,350
1,250
1,050
900
1,100
600
500
475
500
875
925
950
900
800
725
600
2,700
1,400
1,300
1,100
1,300
2,200
2,325
2,200
1,900
1,700
1,525
1,350
1,050
500
425
325
350
675
710
700
700
650
550
450
2,800
1,500
1,175
1,100
1,400
2,000
2,000
1,720
1,700
1,500
1,350
1,225
Dubai Real Estate Report - Q4 201919
DUBAIAPARTMENT SALES PRICES
ARABIAN RANCHES
DUBAI SILICON OASIS (CEDRE VILLAS)
DUBAI SPORTS CITY (VICTORY HEIGHTS)
JUMEIRAH
JUMEIRAH PARK
JUMEIRAH VILLAGE
MEADOWS
MIRDIF
PALM JUMEIRAH
SPRINGS
THE LAKES
UMM SUQEIM
DUBAI AVERAGE
ANNUAL % CHANGE
% CHANGE SINCE PEAK (2008)
% CHANGE SINCE MARKET LOW (2011)
% CHANGE SINCE 2ND PEAK (2014)
(All figures in AED 000’s p.a.)
TYPE 5 BEDROOMS4 BEDROOMS3 BEDROOMS
Dubai Real Estate Report - Q4 201920
2008 20192009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20182019 2019
275 140 125 125 155 213 215 203 195 155 145
- - - 150 175 220 223 205 170 165 150
- - - 150 155 205 195 180 175 155 150
325 160 140 140 155 195 215 190 190 175 163
- - - - - 195 220 218 210 175 165
130
135
125
150
153
- - - 90 125 155 163 160 160 145 120
325 180 180 180 210 230 238 233 210 195 190
240 100 80 80 90 138 133 130 120 105 93
375 270 275 275 325 350 350 333 320 275 245
250 125 105 105 140 163 195 180 180 145 135
- - - 170 200 220 228 223 220 190 175
95
165
88
215
123
158
325 160 140 135 160 215 250 195 190 180 170
314 179 162 152 179 213 225 206 195 175 152
- -43% -9% -6% 18% 19% 5% -8% -5% -11% -13%
-56%
-9%
-38%
-13%
155
133
335 180 160 160 220 285 300 243 235 190 183
- - - 170 200 230 225 213 195 170 168
- - - 165 180 220 250 215 210 180 175
400 190 160 160 185 238 275 253 210 195 185
- - - - - 250 290 245 245 200 188
- - - 110 150 165 178 170 170 145 125
173
143
158
170
183
108
350 240 200 200 225 250 275 260 260 225 210
260 120 110 105 115 165 155 150 150 130 115
550 340 315 315 400 495 485 420 400 390 350
- - - - - - - - - - -
- - - 260 280 290 283 275 270 245 235
180
100
315
-
220
400 190 160 160 180 290 275 260 240 220 210
388 223 204 186 219 261 271 244 231 206 183
- -43% -8% -9% 18% 19% 4% -10% -5% -11% -11%
-58%
-7%
-38%
-10%
183
165
425 265 250 250 285 365 343 303 285 250 220
- - - 180 260 275 253 235 200 190 190
- - - 220 275 320 350 305 300 245 220
450 225 200 200 220 310 350 285 270 230 215
- - - - - 295 340 290 275 255 230
- - - 145 165 180 210 208 185 160 150
205
170
200
195
225
140
425 265 225 225 265 285 310 285 285 250 230
275 165 125 125 140 175 175 175 170 150 135
800 450 450 450 500 723 725 675 600 500 465
- - - - - - - - - - -
- - - 340 350 350 400 363 350 330 260
210
115
440
-
260
490 230 210 210 230 313 305 290 270 245 235
482 274 246 224 259 311 314 290 274 245 222
-43% -10% -9% 15% 20% 1% -8% -6% -11% -9%
-57%
-5%
-36%
-7%
220
206
DUBAIVILLA RENTAL RATES
0 500 1,000 1,500 2,000 3,0002,500 0 500 1,000 1,500 2,000 3,0002,500
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
JUM
EIR
AH
PA
RK
SP
RIN
GS
DU
BA
I S
PO
RT
S C
ITY
(V
ICT
OR
Y H
EIG
HT
S)
PA
LM
JU
ME
IRA
H
DU
BA
I S
ILIC
ON
OA
SIS
(C
ED
RE
VIL
LA
S)
ME
AD
OW
S
AR
AB
IAN
RA
NC
HE
S
JUM
EIR
AH
VIL
LA
GE
AED per sq.ft.
2,200
850
750
750
950
1,225
1,150
1,000
1,150
1,100
950
825
1,000
700
550
475
500
725
850
825
800
750
725
625
1,500
850
750
750
900
1,125
1,250
1,150
1,150
1,050
925
800
1,500
725
650
550
800
1,175
1,175
1,100
1,100
1,000
800
675
1,100
600
500
475
550
850
975
950
850
750
650
575
2,200
1,000
850
850
1,000
1,300
1,350
1,150
1,300
1,200
1,000
850
2,750
1,800
1,550
1,500
1,800
3,000
2,850
2,475
2,500
2,400
2,100
1,900
1,800
850
650
650
900
1,100
1,075
950
1,100
1,000
825
700
Dubai Real Estate Report - Q4 201921
DUBAIVILLA SALES PRICES
Dubai Real Estate Report -
BARSHA HEIGHTS (FORMER TECOM)BUR DUBAI
BUSINESS BAY
DIFC
JUMEIRAH LAKES TOWERS
SHEIKH ZAYED ROAD
DUBAI AVERAGE
ANNUAL % CHANGE
% CHANGE SINCE PEAK (2008)
% CHANGE SINCE MARKET LOW (2012)
% CHANGE SINCE 2ND PEAK (2014)
(All figures in AED per sq.ft. p.a.)
TYPE
Q4 201922
-72%
9%
-25%
350 105 75 60 55 85 100 110 48 95 85
360 150 110 90 80 95 105 108 100 100 85
- - - 75 70 100 103 88 90 90 75
525 370 230 220 225 220 235 255 250 245 215
235 100 60 50 50 90 95 98 95 95 80
425 215 160 140 140 175 180 185 165 150 120
350 173 114 96 94 117 126 130 127 122 114
- -51% -34% -16% -2% 24% 8% 3% -2% -4% -7%
2008 20192009 2010 2011 2012 2013 2014 2015 2016 2017 2018
68
-12%
78
65
195
63
98
104
DUBAIOFFICE RENTAL RATES
JUM
EIR
AH
LA
KE
S T
OW
ER
SD
IFC
BU
SIN
ES
S B
AY
BA
RS
HA
HE
IGH
TS
(F
OR
ME
R T
EC
OM
)
AED per sq.ft.
2,500
1,100
850
750
750
825
975
975
900
800
725
600
2,200
1,250
900
750
700
975
1,225
1,250
1,250
1,000
875
725
4,250
1,900
1,900
1,800
1,700
1,800
1,875
1,925
1,900
1,650
1,500
1,350
2,000
900
650
550
550
925
1,075
975
850
800
675
600
0 500 1,000 1,500 2,000 4,5002,500 3,000 3,500 4,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Dubai Real Estate Report - Q4 201923
DUBAIOFFICE SALES PRICES
Dubai Real Estate Report -
1 Bluewater Island
2 JBR
3 Dubai Marina
4 Palm Jumeirah
5 Umm Suqeim
6 Jumeirah
7 Jumeirah Bay Island
8 City Walk
9 Sheikh Zayed Road
10 La Mer
11 Pearl Jumeirah
12 Bur Dubai
13 Dubai Maritime City
14 Port Rashid
15 Rigga Al Buteen
16 Deira
17 Downtown Jebel Ali
18 Al Furjan
19 Discovery Gardens
20 Jumeirah Park
21 Jumeirah Islands
22 Jumeirah Lakes Towers
23 Springs / Meadows
24 Emirates Hills
25 The Lakes
26 The Greens
27 Barsha Heights (Tecom C)
28 Al Barsha
29 Business Bay
30 Downtown Dubai
31 DIFC
32 Dubai Design District
33 Dubai Healthcare City Phase 2
34 Culture Village
35 Dubai Festival City
36 Al Nahda
37 Al Qusais
38 Muhaisnah
39 Jumeirah Village Triangle
40 Jumeirah Village Circle
41 Dubai Hills Estate
42 Living Legends
43 Al Barari
44 Meydan
45 Dubai Creek Harbour
46 Commercial District
47 Golf District
48 Logistic District
49 Aviation District
50 Al Maktoum International Airport
51 Expo 2020
52 Residential District
53 Dubai Investment Park
54 Green Community
55 Dubai Production City (IMPZ)
56 Jumeirah Golf Estates
57 Victory Heights
58 Dubai Sports City
59 MotorCity
60 Dubai Studio City
61 Damac Hills
62 Remraam
63 Mudon
64 Arabian Ranches
65 Dubailand
66 The Villa
67 Liwan
68 Dubai Residence Complex
69 Dubai Silicon Oasis
70 International City
71 International City Phase 2 & 3
72 Al Warqaa
73 Mirdif
74 Uptown Mirdiff75 Town Square
76 Akoya Oxygen
311
311
311
611
611
611
11
11
44
44
2
1
322
18
1920
28
5
54
17
56
50
51
48
49
47
46
53
62
5857
59
60
64
61
63
75
42 43
41
65
40
39
55
6967
68
76
70
74
73
4
26
24
25
23
21
27
30
44
35
3233
29
6
1114
13
107
12
31
8
9 16
15
36
37
72
71
38
34
45
52
66
To Sharjah
To Abu Dhabi
Arabian Gulf
Q4 201924
DUBAIPROPERTY MAP
Northern EmiratesTHE CULTURAL CAPITAL OF THE ARAB WORLD
RECESSION
2009-2012
RECOVERY AND GROWTH
2013-2014STABILISATION
2015-2016DOWNTURN
2017-2019• Following strong Rental growth due to Residents being priced out of
neighbouring Dubai, Rental rates recorded rapid declines as a result of the financial crisis at the end of 2008.
• Consequently, a large number of Tenants took the opportunity to relocate to Dubai to avoid the long commute to work.
• Leasing activity in the Northern Emirates was slow and many new buildings that were delivered during this period remained vacant.
• Whilst Dubai and Abu Dhabi saw signs of recovery at the end of 2011 and 2012, the Northern Emirates only started to gain momentum in early 2013. RAK was the exception and witnessed limited traction due to partially completed master-planned communities.
• Rental rates in the Northern Emirates bottomed out in the beginning of 2013.
• Rising rates in Dubai accelerated increases in Sharjah, which fuelled the recommencement of previously stalled projects, specifically in the areas closest to Dubai, namely Al Nahda and Al Khan.
• The Villa market in Ras Al Khaimah recorded strong Sales activity as value-for-money options were readily available.
• The Sharjah Office sector, however, remained stagnant and experienced only a 4% growth over the period due to limited demand.
• The interdependence between Dubai and the Northern Emirates manifested due to the slowdown recorded in Dubai, which resulted in a stagnant Rental market in the Northern Emirates.
• The availability of superiorproducts led to marginal rate reductions in more mature buildings as Tenants upgraded to newly-built accommodation.
• Continuous handovers of affordable units in Dubai encouraged Tenants to move (back) to the Emirate, and stalled relocations to the Northern Emirates.
• The Office sector in Sharjah remained flat due to the supply-demand imbalance.
• Subdued market activity resulted in modest average declines in Rental rates across all sectors and Emirates.
• Despite Rent reductions and increased incentives, Tenants still opted for affordable units in Dubai.
• Diverse initiatives implemented over the last three years focused on promoting long term economic sustainability.
The line graph above demonstrates the average percentage Rental trend on a quarterly basis. Sharjah Ajman Umm Al Quwain Ras Al Khaimah Fujairah
NORTHERN EMIRATES | HISTORIC REVIEWIn
de
x B
ase
10
0 =
Ma
rch
20
10
160
140
120
100
80
60
Mar Jun Dec DecDec Sep SepSep Mar MarMar Jun JunJunSep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep Dec
2009 2010 2011 2012 2013 2014 2015 2016 2018 20192017
Northern Emirates Real Estate Report - Q4 201926
RENTAL RATES
PROJECT LAUNCHES
INCENTIVES SUPPLY DEMANDRENTAL RATES
PROJECT LAUNCHES
INCENTIVES SUPPLY DEMAND
SHARJAH
AJMAN
UMM AL QUWAIN
RAS AL KHAIMAH
FUJAIRAH
TRENDS
Northern Emirates Real Estate Report -
2019 HIGHLIGHTS 2020 OUTLOOK
•
•
•
•
•
The growing supply of properties at reduced Rental rates in neighbouring Dubai resulted in an increased
number of Residents in the Northern Emirates, particularly in Sharjah, relocating closer to their place of work
(Dubai).
In addition, the handover of units in master plan communities such as phase 2 of Nasma Residences (184 Villas
and Townhouses) along Emirates Road (E611), as well as stand-alone projects in the various Emirates,
prompted Tenants looking for better quality specifications and facilities to move internally.
In fact, typical Apartment buildings in Ajman and Ras Al Khaimah recorded Rental reductions of 19% and 16%,
respectively, due to the new inventory.
Similar to Dubai and Abu Dhabi, the local governments of the Northern Emirates introduced larger budgets and
more diversification strategies to stimulate the economy and boost investment.
As such, a legislation published early in the year, allowing non-Arab nationals without a UAE Residency Visa to
purchase properties in Sharjah on a 100-year renewable Lease, resulted in increased transaction volumes.
•
•
•
•
Whilst subject to further delays, the rise in self-contained, master plan communities is expected to attract more
Tenants from existing, more mature developments, once complete and if priced competitively.
This increase in supply, coupled with continuous handovers in Dubai, will result in further drops in Rental rates
across all sectors.
As in 2019, Landlords and Developers are likely to offer incentives and discounts in order to retain Tenants and
boost property Sales.
In addition to increased spending on infrastructure development and pro-active government initiatives, the
Northern Emirates will continue to launch tourism projects to accelerate business and employment growth.
2019 2020
Q4 201927
NORTHERN EMIRATESHIGHLIGHTS AND OUTLOOK
SHARJAHTYPICAL
HIGH END
AJMAN
UMM AL QUWAIN
RAS AL KHAIMAHTYPICAL
HIGH END
FUJAIRAH
NORTHERN EMIRATES AVERAGE
ANNUAL % CHANGE
% CHANGE SINCE PEAK (2008)
% CHANGE SINCE MARKET LOW (2012)
% CHANGE SINCE 2ND PEAK (2015)
(All figures in AED 000’s p.a.)
TYPE 3 BEDROOMS2 BEDROOMS1 BEDROOM
Northern Emirates Real Estate Report - Q4 201928
2008 20192009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20182019 2019
44 32 24 23 23 29 31 33 31 25 30
44 32 24 23 25 35 39 39 38 35 31
42 30 26 25 22 27 29 32 31 26 22
37 21 20 20 20 20 22 23 23 22 20
43 30 26 23 22 29 33 38 34 26 26
19
29
19
19
20
43 30 26 23 33 45 45 38 34 37 34
39 24 23 23 23 30 32 43 40 35 30
42 28 24 23 24 31 33 36 34 29 26
- -32% -16% -6% 5% 28% 7% 9% -4% -15% -10%
-49%
-1%
-33%
-10%
32
28
24
63 41 32 30 33 37 37 36 36 32 39
63 41 32 30 36 51 58 56 52 60 48
47 33 28 27 26 35 39 35 35 32 27
48 30 28 28 27 27 29 30 30 28 27
55 35 32 31 55 60 63 63 65 58 52
55 35 32 31 28 38 39 40 40 38 34
23
43
24
23
45
27
49 30 29 30 30 38 43 49 49 40 39
54 35 30 29 33 41 44 44 44 41 36
- -35% -14% -3% 13% 22% 7% 1% -1% -7% -12%
-43%
-8%
-33%
-13%
34
31
76 51 42 40 44 52 54 52 53 43 56
76 51 42 40 48 70 73 70 71 78 65
66 49 40 40 38 45 50 51 50 43 36
53 40 38 38 38 38 40 40 40 34 32
65 49 43 40 80 93 110 100 98 82 70
65 49 43 40 38 47 50 50 50 42 40
34
57
33
30
65
37
59 45 40 42 40 47 50 64 64 58 56
66 48 41 40 46 56 61 61 61 54 48
- -27% -14% -3% 16% 21% 9% 0% 0% -11% -11%
-35%
-7%
-32%
-12%
50
43
NORTHERN EMIRATESAPARTMENT RENTAL RATES
AL MAJAZ
AL QASIMIAH
AL NAHDA
AL KHAN (AL MAMZAR)
ABU SHAGARA
AL YARMOOK
AL WAHDA
CORNICHE
SHARJAH AVERAGE
ANNUAL % CHANGE
% CHANGE SINCE PEAK (2008)
% CHANGE SINCE MARKET LOW (2012)
% CHANGE SINCE 2ND PEAK (2015)
(All figures in AED 000’s p.a.)
TYPE 3 BEDROOMS2 BEDROOMS1 BEDROOM
Northern Emirates Real Estate Report - Q4 201929
20192008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20182019 2019
45 35 28 23 23 32 40 41 39 34 31
40 29 23 23 23 34 38 33 31 27 24
45 35 29 28 27 36 41 44 35 30 27
45 35 29 29 28 34 42 39 38 37 29
40 29 24 22 20 31 34 32 33 28 26
37 29 24 23 20 23 24 26 28 24 20
28
21
25
28
22
18
40 29 23 23 23 34 39 39 37 29 27
48 35 30 28 26 37 48 48 44 36 33
43 30 25 23 22 29 35 34 32 29 25
- -28% -19% -5% -4% 3% 19% -2% -5% -10% -13%
-47%
4%
-35%
-10%
24
30
23
65 43 33 31 32 45 53 58 55 41 39
60 41 30 29 31 43 45 39 39 33 31
64 41 33 30 32 48 55 55 51 39 36
65 41 35 33 33 44 53 63 63 49 45
62 41 32 27 25 34 42 42 40 34 31
52 34 30 29 24 28 28 28 29 27 25
61 41 31 29 31 45 50 57 45 38 36
37
28
34
41
29
23
31
63 45 40 40 41 60 65 64 53 46 42
62 39 32 30 29 39 44 45 43 36 33
- -36% -19% -6% -3% 35% 13% 2% -5% -16% -9%
-52%
6%
-33%
-10%
40
30
75 58 47 38 45 68 75 73 66 52 52
70 57 47 42 40 55 58 55 55 47 43
80 58 47 45 46 60 75 73 65 55 52
80 58 47 45 43 63 78 80 73 57 56
70 49 40 34 32 50 53 54 53 43 42
65 44 38 36 33 48 48 48 45 40 38
70 48 40 38 42 63 68 65 63 50 44
50
39
48
52
36
35
42
75 58 50 54 55 73 80 78 75 64 62
73 51 42 40 39 54 59 58 56 48 45
- -31% -16% -6% -3% 39% 8% -1% -4% -13% -6%
-56%
9%
-31%
-10%
53
41
SHARJAHAPARTMENT RENTAL RATES
AL KHAN (TYPICAL)
AL KHAN (HIGH END)
AL TAAWUN
AL NAHDA
AL MAJAZ (TYPICAL)
AL MAJAZ (HIGH END)
AL MAMSHA*
AL ZAHIA*
AL JADA*
AED per sq.ft.
*Leasehold ownership (up to 100 years) for all nationalities
0 100 200 300 400 500 600 700 800 900 1,000
365
545
365
395
420
525
650
815
750
Northern Emirates Real Estate Report - Q4 201930
SHARJAHAPARTMENT SALES PRICES
Northern Emirates Real Estate Report -
AL TAAWUN ROAD
CORNICHE AREA
AL WAHDA
AL QASEMEH
CLOCK R/A
AL YARMOOK
INDUSTRIAL AREA
SHARJAH AVERAGE
ANNUAL % CHANGE
% CHANGE SINCE PEAK (2008)
% CHANGE SINCE MARKET LOW (2012)
% CHANGE SINCE 2ND PEAK (2015)
(All figures in AED per sq.ft. p.a.)
TYPE
Q4 201931
-68%
-30%
-29%
130 70 60 53 50 68 48 48 48 48 36
150 70 60 55 55 53 68 63 38 44 52
100 50 45 48 48 43 53 50 40 40 42
110 50 45 45 45 45 43 43 43 45 40
100 50 45 45 45 40 45 45 45 43 42
100 50 45 45 45 50 40 40 40 40 34
111 55 49 49 48 48 49 48 48 44 40
- -51% -11% 0% -1% 1% 2% -3% 0% -9% -8%
100 50 45 53 50 49 50 45 44 38 37
2008 20192009 2010 2011 2012 2013 2014 2015 2016 2017 2018
32
-14%
44
36
34
37
29
35
31
SHARJAHOFFICE RENTAL RATES
Arabian Gulf
11
5
1
10
8
9
3
2
6
4
7
ABU DHABI
DUBAI
SHARJAHFUJAIRAH
RAS AL KHAIMAHUMM AL QUWAIN
AJMAN
SHARJAH
1 Abu Shagara
2 Al Khan
3 Al Majaz4 Al Nahda
5 Al Qasimiyah
6 Al Taawun
7 Al Wahda
8 Corniche / Buhaira
9 Khaledia
10 King Faisal and
King Abdul Aziz Streets
Mina Al Arab
Marjan Island
1
2
Al Hamra
3
RAS AL KHAIMAH
1 Mina Al Arab
2 Marjan Island3 Al Hamra
UNITED ARAB EMIRATES
Northern Emirates Real Estate Report - 32 Q4 2019
NORTHERN EMIRATESMAP
Al AinTHE GARDEN CITY
RECESSION
2009-2012
RECOVERY AND GROWTH
2013-2014STABILISATION
2015DOWNTURN
2016-2019• As with the other Emirates, the Residential sector in Al Ain recorded a
rapid drop in Rental rates in 2009 following the recession in Q4 2008.
• Apartment and Villa Rental rates decreased by 46% and 29% respectively, from their peak in 2008 until the end of 2012.
• The Office sector followed a different trend as Rental rates continued to increase until late 2009, but declined significantly thereafter. This was mainly due to a general lack of supply at the time.
• Residential Rental rates stabilised in the beginning of 2013 and recorded notable growth in the latter half of the year.
• The delivery of new, quality Villa projects resulted in a rapid increase in Rental rates due to good levels of demand.
• Apartment Rental growth was less pronounced with moderate increases of 9% and 8% in 2013 and 2014.
• Office Rental rates continued to decrease due to the delivery of new Office inventory. This had an adverse effect on occupancy rates, particularly in existing, inferior quality Commercial Villas.
• Whilst Apartment Rental rates recorded minor increases in 2015, Villa and Office Rents remained broadly stable until the end of the year when they softened marginally.
• Low oil prices led to a reduction in government spending in the UAE as a whole, and thus to a slowdown in the Al Ain Real Estate market activity.
• Bearish market sentiment coupled with companies downsizing and the reduction in staff housing allowances have put pressure on the Al Ain Real Estate market.
• Apartment and Villa Rental rates recorded average decreases of 27% and 22% since the end of 2015, whereas Office and Retail Rents declined by 18% and 11%, respectively.
• However, quality Residential communities with supporting facilities enjoyed healthy demand levels translating into higher occupancy rates.
• A number of Residential and Commercial buildings were delivered in different areas in Al Ain, including the Al Jimi Mall extension, as well as the Hazza Bin Zayed Stadium Development, which comprises Residential, Office and Retail components.
Ind
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01
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The line graph above demonstrates the average percentage rental trend on a quarterly basis.
160
140
120
100
80
60
Apartment Rentals Villa Rentals Office Rentals
AL AIN | HISTORIC REVIEW
Mar Jun Dec DecDec Sep SepSep Mar MarMar Jun JunJunSep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep Dec
2009 2010 2011 2012 2013 2014 2015 2016 2018 20192017
Al Ain Real Estate Report - Q4 201934
TRENDS RENTAL RATES PROJECT LAUNCHES INCENTIVES SUPPLY
Al Ain Real Estate Report -
SUPPLY*•
•
•
•
•
•
RENTAL RATES Residential Rental rates recorded further decreases, with Apartments and Villas
declining by 9% and 2%, respectively, over the year.
Drops were more pronounced at the lower end of the market, whereas, good quality
communities with supporting facilities continued to be the preferred choice for
Tenants and generally achieved higher occupancy levels.
Office and Retail Rental rates softened by 6% and 4%, respectively, in 2019, with lower
quality Commercial units located in the Senaya area noting the highest decrease.
Discounts on renewal and flexible payment terms became the norm.
No major supply was delivered in 2019 with the exception of the Al Jimi Mall
extension.
Transaction activity was limited across all asset classes.
2019 HIGHLIGHTS 2020 OUTLOOK
Rental declines recorded over the last two years are likely to lead to increased,
localised activity with Tenants seeking value-for-money options.
The Retail sector is expected to remain under pressure and Rental rates will contract
further.
The Al Ain Real Estate market is expected to remain relatively unchanged in 2020.
No major supply is expected for delivery in 2020. However, a number of Villas under
different Emirati Housing development schemes are due for handover this year.
•
•
•
•
2019
2020
Q4 201935
* It is important to note that whilst a number of projects may have received completion certificates, Asteco does not consider a project delivered until the handover process has been initiated, or the units are available for lease in the open market.
AL AINHIGHLIGHTS AND OUTLOOK
Al Ain Real Estate Report -
MATURE BUILDINGS
NEW BUILDINGS
AL AIN AVERAGE
ANNUAL % CHANGE
% CHANGE SINCE PEAK (2008)
% CHANGE SINCE MARKET LOW (2012)
% CHANGE SINCE 2ND PEAK (2015)
(All figures in AED 000’s p.a.)
TYPE 3 BEDROOMS2 BEDROOMS1 BEDROOM
PRIME COMPOUNDS
Q4 201936
2008 20192009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20182019 2019
50 35 25 23 23 29 33 33 31 27 25
60 50 38 28 28 32 38 38 36 31 31
55 43 32 26 26 31 38 38 36 32 31
- -23% -26% -19% 0% 20% 25% 0% -4% -12% -4%
-48%
11%
-25%
22
-8%
27
28
70 55 45 43 35 39 43 45 43 36 35
75 65 58 45 45 45 48 52 45 41 38
73 60 52 44 40 42 50 52 49 43 40
- -17% -14% -15% -9% 5% 20% 4% -7% -12% -5%
-47%
-4%
-27%
31
-5%
36
38
90 75 60 53 48 51 53 56 54 48 48
95 85 73 55 58 63 65 68 67 61 58
93 80 67 54 53 57 65 67 66 62 60
- -14% -17% -19% -2% 8% 15% 3% -1% -7% -3%
-38%
-8%
-15%
43
-5%
54
57
- - - - - - 43 43 42 38 36 36 - - - - - - 60 60 58 51 48 48 - - - - - - 78 78 78 77 74 74
AL AINAPARTMENT RENTAL RATES
Al Ain Real Estate Report -
MATURE VILLAS
Al Jimi, Town Centre Zaker, Others*
Al Towaya
Prime Compounds
RECENT BUILD
Al Jimi, Town Centre Zaker, Others*
Al Towaya
Prime Compounds
AL AIN AVERAGE
ANNUAL % CHANGE
% CHANGE SINCE PEAK (2008)
% CHANGE SINCE MARKET LOW (2012)
% CHANGE SINCE 2ND PEAK (2015)
(All figures in AED 000’s p.a.)
TYPE 5 BEDROOMS4 BEDROOMS3 BEDROOMS
* Includes Al Khabisi, Al Muwaiji, Al Manasir and Al Masoudi areas
Q4 201937
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20192008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
70 60 60 55 50 65 83 78 68 62 56
75 65 65 60 50 70 80 80 73 70 67
- - - - - - 83 93 93 92 88
54
67
88
115 95 80 65 65 75 88 83 78 70 66
110 105 85 70 65 80 93 93 93 88 78
65
77
- - - - - - 101 104 103 102 98
92 78 69 60 56 71 84 81 79 73 68
- -15% -11% -14% -7% 28% 18% -4% -3% -7% -7%
-27%
21%
-17%
-2%
98
67
95 80 75 70 65 75 95 90 83 78 71
85 80 80 80 65 85 95 93 93 93 87
71
87
- - - - - - 95 113 104 102 101
125 115 100 90 85 100 110 105 98 91 140
101
80
130 125 105 100 85 105 110 105 98 98 94
- - - - - - 129 133 120 114 110
104 95 87 81 74 89 100 96 93 90 83
- -9% -8% -7% -9% 21% 12% -4% -2% -3% -8%
-20%
13%
-13%
0%
94
110
83
95 90 90 85 85 105 125 122 113 102 90
100 95 95 95 85 110 125 115 110 105 99
90
98
- - - - - - 125 134 129 126 123
140 135 125 110 105 130 155 145 135 125 103
123
102
140 135 130 120 105 135 160 150 150 137 110
- - - - - - 166 168 160 151 145
117 108 107 99 93 119 136 130 127 119 104
- -7% -1% -8% -6% 27% 15% -4% -2% -6% -13%
-11%
11%
-20%
0%
110
145
104
AL AINVILLA RENTAL RATES
SE
NA
YA
ST
RE
ET
MA
IN S
TR
EE
T
MA
JOR
MA
LL
SS
EN
AY
A S
TR
EE
T
KH
AL
IFA
ST
RE
ET
AU
D A
L T
OU
BA
ST
RE
ET
MA
IN S
TR
EE
TK
HA
LIF
A S
TR
EE
T
AED per sq.m. p.a. AED per sq.m. p.a.
0 0500 5001,000 1,0001,500 1,5002,000 2,0002,500 2,500
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
950
1,000
1,125
1,075
925
850
850
800
750
750
713
713
975
1,500
1,700
1,650
1,825
1,825
1,825
1,700
1,700
1,700
1,575
1,525
850
1,050
1,150
1,100
975
850
850
800
750
750
713
713
1,075
1,350
1,700
1,650
1,825
1,825
1,825
1,700
1,700
1,700
1,575
1,525
950
950
1,150
1,100
975
850
850
800
750
750
713
713
1,250
1,550
2,250
2,250
2,225
2,225
2,225
2,225
2,225
2,225
2,150
2,100
800
800
900
900
550
500
500
500
500
500
475
450
1,000
1,200
1,350
1,300
1,500
1,500
1,500
1,700
1,250
1,250
1,150
1,065
Al Ain Real Estate Report - Q4 201938
AL AIN AL AINOFFICE RENTAL RATES RETAIL RENTAL RATES
Town Centre
Al Jimi
Al Khabisi
Al Muwaiji
Al Masoudi
Zaker
Al Towaya
East Airport District
Hili
Al Oattara
Al Buraimi
Al Mutaredh
Al Jahili
AlMutawa’a
Al Sarooj
Al Shuwaimah
Aflaj
Al KhrairDefence
Al Shuaibah
Al Aqabiyya
Zoo District
Falaj Hazza’a
Asharej
Al Markhaniya
Al Dahmaa
Al Bateen
Al Maqam
Gharebah
Al Salamat District
Al Yahar South
Al Yahar North
Al AinInternational
Airport
SULTANATE OF OMAN
Khalifa Bin Zayed St.
Khalifa Bin Zayed St.
Mo
hd
Bin
Kh
alif
a S
t
Baniyas St
Ard
h J
ow
St
Zaye
d B
in Su
ltan
St.
Al Ain Real Estate Report -39 Q4 2019Q4 2019
AL AINPROPERTY MAP
Ind
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The line graph above demonstrates the average percentage apartment rental trend on a quarterly basis.
200
180
160
140
120
100
80
60
40
Abu Dhabi Ajman Al Ain Dubai Fujairah Ras Al Khaimah Sharjah Umm Al Quwain Market Low Market Peak
Mar Jun Dec Dec MarSep Sep SepMar Mar MarMar Jun Jun JunSep Dec DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecMar Jun Sep DecJun Sep Dec
2009 2010 2011 2012 2013 2014 2015 2016 2018 2019 20202017
UAE PRICE COMPARISON
Price Movement from 2009 to 2019
Arab Spring and Euro Crisis u UAE equals safe haven Global financial crisis bursts Real Estate bubble Merger: Aldar & Sorouh
Expo 2020 announced
UAE Central Bank mortgage cap Qatar diplomatic crisis
OPEC oil production cut u Oil prices bottoming out
Brexit
Merger: FGB and NBAD
UAE Centennial Plan 20712071
Abu Dhabi AED 50 Billion Stimulus Package50Billion
Emaar & Aldar – Strategic Partnership
100 Years Leasehold for Non-Arabs in Sharjah100YEARS
Oil Price Fluctuations & Trade Tensions
Largest-Ever Budget AED 66.4 Billion
Freehold Law for Investment Zones
Trump
5 Years Multiple Entry Tourist Visa
ABU DHABI
AL AINSHARJAH
UMM AL QUWAINRAS AL KHAIMAH
FUJAIRAH
AJMAN
DUBAI
66.4 Billion
Oxford Economics -
We have nudged up our forecast for non-oil GDP growth in 2020 to 3.0% from 2.8% previously (after an estimated 1.6% in 2019) on the back of a 17% increase in government spending in Dubai’s 2020 budget. Overall GDP growth is also raised slightly to 2.3% from some 1.9% in 2019. But at the same time, downside risks to the outlook have risen given the sharp escalation of tensions between the US and Iran that threatens to draw in the rest of the Gulf region. For 2021-22 we forecast a slight slowdown in GDP growth to 2.2% a year.
The Dubai government announced its largest ever budget for 2020, with expenditure planned at AED66.4bn (after AED56.8bn in 2019 and AED56.6bn in 2018), and underlined its commitment to a successful implementation of Expo 2020 by setting aside a further AED9.2bn for the event. This is on top of the three-year AED50bn stimulus plan announced by the Abu Dhabi government in H2 2018 that will continue boost the UAE economy this year.
However, downside risks to the forecast appear to be rising. Current economic momentum is stalling with the non-oil PMI down to just 50.2 in December and barely remaining in expansionary territory.
The UAE is exposed to the rising tensions between the US and Iran, and heightened tensions could have a pronounced impact on the economy. This does not require the UAE to be drawn into conflict – the economy would be affected by any disruption to oil exports via the Strait of Hormuz. Moreover, tourism, international trade and FDI – all key pillars of the UAE economy – are vulnerable to the perceived risk of conflict and could feel the effects of the current tensions in Q1 2020 and beyond.
GDP GROWTH FORECAST FOR 2020 RAISED TO 2.3%…The OPEC+ production cut agreement is holding back the contribution from the oil sector through 2019 and into 2020. We now expect the UAE’s quota to be extended through to 2021 and there is a risk that further cuts may be needed to support global oil prices despite recent US-Iran tensions. We have nudged up our 2020 GDP growth forecast to 2.3%, but the outlook for 2021-22 remains similarly subdued.
Key drivers in the oil sector over the next few years are:
• Flat oil output• Oil prices marginally below break-even
…AND A PICK-UP IN NON-OIL SECTOR EXPECTEDNon-oil GDP growth has slowed and was only 0.2% y/y in Q1 2019. Q2 data for the UAE has not been released but Dubai expanded 2.2% y/y in Q2, up slightly from Q1. However, momentum seems to have slowed in H2 2019; since reaching its highest quarterly average in more than four years in Q2 2019, the PMI for the non-oil sector has dropped and was only just in expansionary territory at 50.2 in December. We continue to expect non-oil growth of 1.6% in 2019 but with the risks skewed to the downside.
Policymakers have reacted, and expansionary fiscal policy and an improving investment climate, particularly in Dubai ahead of Expo 2020, should stimulate a recovery in the non-oil sector. Indeed, the planned expenditure rise in Dubai’s 2020 budget has led us to raise our forecast for non-oil GDP growth in 2020 to 3.0%, before a slowdown to 2.8% in 2021.
The pick-up in non-oil GDP growth this year is based on:
• Stimulus plans in Abu Dhabi and Dubai• Strong tourism and rising FDI in Dubai• Gradual improvement in global economy• Improved banking conditions• Stabilization of residential property prices
STEADY GROWTH OVER THE MEDIUM TERMThere are several positive factors seen keeping GDP growth at just over 2% pa in the medium-term:
• Diversification strategy• Business conditions will support investment• Domestic political stability
UAE: Inflation UAE: Real GDP growth
% year % year
Source: Oxford Economics Source: Oxford Economics
-2 -61999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020
F’Cast F’Cast
Middle East &North Africa
Middle East &North Africa
UAE
UAE
16
14
12
14
12
8
10
10
6
8
4
6
4
2
2
0
0
-4
-2
WHO WE ARE OXFORD ECONOMICSOxford Economics was founded in 1981 as a commercial venture with Oxford University’s business college to provide economic forecasting and modeling to UK companies and financial institutions expanding abroad. Since then, we have become one of the world’s foremost independent global advisory firms, providing reports, forecasts and analytical tools on 200 countries, 100 industrial sectors and over 3,000 cities. Our best-of-class global economic and industry models and analytical tools give us an unparalleled ability to forecast external market trends and assess their economic, social and business impact.
Headquartered in Oxford, England, with regional centres in London, New York, and Singapore, Oxford Economics has offices across the globe in Belfast, Chicago, Dubai, Mexico City, Miami, Milan, Paarl - South Africa, Paris, Philadelphia, San Francisco, and Washington DC. We employ over 200 full-time people, including more than 120 professional economists, industry experts and business editors—one of the largest teams of macro economists and thought leadership specialists.
To find out more and request your free trial please contact Paul de Cintra on [email protected]
42 Q4 2019
ABU DHABI: FOREIGN FREEHOLD OWNERSHIP OF LAND AND VILLAS WITHIN INVESTMENT AREASIn 2019, the Abu Dhabi Government issued Law No. (13) of 2019 amending certain provisions of Law No. (19) of 2005 on Real Estate Ownership (“Law”). The Law implements major changes to the rules on foreign ownership of real estate in Abu Dhabi.
Foreign individuals (non-UAE/non-GGC nationals) and companies wholly or partially owned by such individuals (“Foreign Owners”) can now own land and villas on a freehold basis within designated investment areas of the Emirate of Abu Dhabi. Freehold ownership means ownership of land to the exclusion of all others, unrestricted in time. It is a superior interest to the rights previously available to Foreign Owners.
Previously, the laws restricted Foreign Owners to owning freehold title to apartments, offices, and floors within buildings. Foreign Owners wanting to buy land or villas were limited to a musataha (a concept akin to a long-term development right), a usufruct (a long term use right) or a long-term lease, each for a period not exceeding 99 years.
The Law now allows all Foreign Owners to own freehold title to all real estate located within any of the investment areas of Abu Dhabi.
The Law applies retrospectively to the extent that the seller (developer) agrees to convert musataha, usufruct, or long-term lease rights over land or villas, located in investment areas, into freehold rights. The template musataha, usufruct and long-term lease agreements used by most developers in Abu Dhabi include provisions allowing the grant of freehold ownership in favour of Foreign Owners if the laws of the Emirate ever so permit.
In practice, following the entry into effect of the Law, we have helped many investors in converting their usufruct, musataha or long-term lease agreements, entered into before publication of the Law, into a freehold sale and purchase agreements (“SPA”). If Abu Dhabi City Municipality (“ADM”) has already registered the usufruct, musataha or long-term lease agreement, the parties must simultaneously enter into, and register termination of the existing agreement together with a new freehold SPA. There are no reduced conversion registration fees in this case; registration fees for the termination of the musataha agreement and the freehold SPA must be paid to ADM, even if the owner has already paid registration fees to ADM for the musataha, usufruct or long-term lease.
Authors: David Bowman, Senior Counsel – Real Estate, Al Tamimi & Company Key Contact: Tara Marlow, Partner, Head of Real Estate, Hotels & Leisure, Al Tamimi & Company ([email protected])
Al Tamimi & Company is the largest full service law firm in the Middle East with 17 offices across 9 countries. For more information, please visit www.tamimi.com.
Al Tamimi & Co. -43 Q4 2019
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 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
About Asteco
The Middle East’s largest full service Real Estate Services Company, Asteco was formed in Dubai in 1985. Over the years, Asteco has gained enormous respect for consistently delivering high quality, professional, value-added services in a transparent manner. It is also widely recognised for its involvement with many of the projects that have defined the landscape and physical infrastructure of the Emirates.
Asteco has an essential combination of local knowledge and international expertise. A deeply established brand, renowned for its application of the latest technological advances, its commitment to transparency, winning strategies and human expertise. Undisputed Real Estate experts, Asteco represents a significant number of the region’s top property Owners, Developers and Investors.
VALUATION & ADVISORY Our professional advisory services are conducted by suitably qualified personnel all of whom have had extensive Real Estate experience within the Middle East and internationally.
Our valuations are carried out in accordance with the Royal Institution of Chartered Surveyors (RICS) and International Valuation Standards (IVS) and are undertaken by appropriately qualified valuers with extensive local experience.
The Professional Services Asteco conducts throughout the region include:
• Consultancy & Advisory services
• Market research
• Valuation services
SALESAsteco has established a large regional property Sales division with representatives based in the UAE, Qatar and Jordan. Our Sales teams have extensive experience in the negotiation and sale of a variety of assets.
LEASINGAsteco has been instrumental in the Leasing of many high-profile developments across the GCC.
ASSET MANAGEMENT Asteco provides comprehensive Asset Management services to all property Owners, whether a single unit (IPM) or a regional mixed-use portfolio. Our focus is on maximising value for our Clients.
OWNERS ASSOCIATION Asteco has the experience, systems, procedures and manuals in place to provide streamlined comprehensive Association Management and Consultancy services to Residential, Commercial and mixed-use communities throughout the GCC Region.
BUILDING CONSULTANCY The Building Consultancy Team at Asteco have a wealth of experience supporting their Clients throughout all stages of the built asset lifecycle. Each of the team’s highly trained surveyors have an in-depth knowledge of construction technology, building pathology and effective project management methods which enable us to provide our clients with a comprehensive building consultancy service.
FRANCHISEOur brand, network, system and procedures are now available in territories across the MENA region. Our Licensing services currently include Real Estate Brokerage Franchising and associated support services with many of the key elements designed specifically around the Franchisee, making it a truly unique and bespoke franchise opportunity.
Elaine JonesFRICS
Executive Chairman and Founder / Director - Transactional Services+971 4 403 [email protected]
John Stevens MSc, BSc (Hons), MRICS
Managing Director/ Director - Asset Management+971 4 403 [email protected]
John Allen BSc, MRICS
Executive Director - Valuation & Advisory+971 4 403 [email protected]
James Joughin BSc (Hons), MRICS
Senior Associate Director - Head of Valuations +971 4 403 [email protected]
Jenny Weidling BA (Hons)
Manager - Research and Advisory, Dubai+971 4 403 [email protected]
Ghada Amhaz MSc
Manager - Research and Advisory, Abu Dhabi+971 2 626 [email protected]
Tamer Ibrahim Chaaban BE
Associate Director / General Manager - Al Ain+971 3 766 [email protected]
20191024/astrep866