abu dhabi real estate market overview q2 2014 dhabi real estate market... · 2015 scheduled new...

ABU DHABI REAL ESTATE MARKET OVERVIEW

Q2 2014

REAL ESTATE SERVICES

FOREWORD ADIB Real Estate Services comprises a comprehensive real estate banking and advisory platform with complimentary business lines covering the whole property cycle. Our services include:-

�� Real estate financing�� Strategic development advisory�� Investment advisory�� Asset management�� Project Management�� Valuation�� Brokerage�� Market Research

Choosing to work with ADIB means gaining the benefit of across-the-board property expertise under one roof.

This market research publication provides an overview of the macro trends, demand drivers and real estate market in Abu Dhabi.

The real estate market in Abu Dhabi is entering into period of stabilisation after months of rising values, due to lower net yields, lower loan-to-value (75%) and limited availability of quality apartments with excellent views in the secondary market.

There is a healthy appetite for off-plan sales for quality developments sold by established developers as was seen with Aldar’s recently launched Al Hadeel and Ansam projects. Both the projects managed to sell most of the inventory during the launch event. We expect further projects with beach / water views to be launched in the coming months (6-18 months).

Our report continues to improve market transparency, while highlighting key data, which is relevant to various segments of population within Abu Dhabi.

REPORT HIGHLIGHTS Residential Sector

Strong market confidence and investor interest has continued the momentum for rising values in prime projects. These were combined with a number of bulk deals (buildings and projects) being closed in Q2 including plots of land being sold.

The ADIB Rental Index shows rent cap removal has not had significant impact on the market with common rental trend of 0 to +5% during Q2 2014.

Office Sector

Supply slowdown and healthy demand from tenants have led to reduction in vacancy rates. There are still some speculative projects being built, but the majority are being built by owner occupiers like ADNOC, Al Hilal, ADIB, etc.

Retail Sector

Stable rents and rising footfalls have led to multiple new tenants opening up in Off-Island malls which have seen improving occupancy levels.

Yas Mall opening up in Q4 2014 will bring multiple new retail tenants into Abu Dhabi

Hospitality Sector

Growth in airport passengers have positively impacted the revenue (up 15%) and guest arrivals into Abu Dhabi (up 34%) in Q2 2014 vs. Q2 2013. The tourism sector continues to grow at a healthy pace and various initiatives by TCA Abu Dhabi is expected to sustain this growth.

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014

2

CONTENTSReal Estate Sector Summary 4

Supply Summary 6

Demand Drivers 8

Macro Trends 10

Residential Sector 12

Office Sector 28

Retail Sector 32

Hospitality Sector 34

Definitions & Methodology 38

Contact Information 39

Supply - Photo Schedule 40

Development Location Map 42

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014

3

ITEM DETAILS

ADIB Rental Index Common TrendADIB Rental Index Q-Q Change

0 to +5% increase +3.7%

Q2 2014 New SupplyQ3-4 2014 Projected New Supply

2,506 units (+1.2%) 6,995 units (+3.17%)

Total Abu Dhabi Housing Stock Q2 2014Total New Units Added From 2010

226,454 units42,099 (21.84%)

RESIDENTIAL

ITEM DETAILS

Grade A Headline Rent (Q-Q Change)(12 Month Outlook)

AED 1,750 Per Sqm (2.9%)(Stable)

Q2 2014 New SupplyQ3-4 2014 Projected New Supply

19,240 Sqm (+0.6%)51,000 Sqm (+1.6%)

Key Additions Abu Dhabi Plaza

Total Abu Dhabi Office Stock Q2 2014 3.21 million Sqm

Under Construction 464,558 Sqm

Under Construction (Spec v Purpose Built Ratio)

53:47

Investment Zone Net Yields 7% - 9%

KEY TREND

Healthy sales activity witnessed in investment zones with interest from owner-occupiers as well as investors,

especially from GCC.

REAL ESTATE SECTOR SUMMARY

RENTAL TRENDS (Q-Q CHANGE)

SALES TRENDS (Q-Q CHANGE)

INVESTMENT ZONE

INVESTMENT ZONE

NON INVESTMENT ZONE PRIME

Studio1 BR2BR3BR

Studio1 BR2BR3BR

+9.2%+4.9%+6.9%+4.8%

+18.5%+6.0%+5.3%+4.0%

+19%+9%+7%+5%

4

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | REAL ESTATE SECTOR SUMMARY

ITEM DETAILS

Average Retail Mall Rents(Q-Q Change)(12 Month Outlook)

AED 1,800-3,800 Per Sqm(0%)

(Stable)

Q2 2014 New SupplyQ3-Q4 2014 Projected New Supply

0 Sqm (0%)262,000 Sqm (+11.26%)

Key Additions No Additions

Total Abu Dhabi Retail Stock Q2 2014 2.06 million Sqm

Under Construction 328,400 Sqm

Announced Projects in Pre-Construction Phase 662,000 Sqm

Vacant Space (District & Regional Malls) 30%

RETAIL

ITEM DETAILS

Hotel OccupancyHotel Average Room RateHotels Guest NightsHotels Revenue

78% +9% 478 -5.5% 3.3 million +26% 2.4 billion +15%

Hotel Apts OccupancyHotel Apts Average Room RateHotels Apts Guest NightsHotels Apts Revenue

86% 6% 348 +1% 1 million +13% 271 million +9%

Q2 2014 New Supply 793 Rooms

Key AdditionsSouthern Sun Hotel

Ramada HotelAdagio Al Bustan Ser. Apt.

Total Abu Dhabi Hotel Rooms 18,993

Q3-Q4 2014 Projected New Supply 597 Rooms

2015 Projected New Supply 2,053 Rooms

2016+ Development Pipeline 2,923 Rooms

HOSPITALITY

5

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | REAL ESTATE SECTOR SUMMARY

Pre-2010* 2010 2011 2012 2013 H12014

H22014

2015 2016

CUMULATIVE RESIDENTIAL SUPPLY

Total Supply

0

50,000

100,000

150,000

200,000

250,0005.68%

187,473177,400

3.54%

194,101

6.19%

206,121

5.27%

216,993

1.15%

219,449

3.17%

226,454

2.60%

232,332

4.12%

241,914

Source: MPM Properties Research

15,000

12,000

9,000

6,000

3,000

02010


2011 2012 2013 H12014

H22014

2015 2016

Investment Area On-Island

ABU DHABI NEW HOUSING SUPPLY

Off-Island

5,135

2,221 2,863 2,411

2,925

2,013

382675

3,732 3,212

5,945

3,770

4,691

752

1,372

775

4,741

1,439 1,2002,550

2,326

2,3522,051

4,981

Num

ber

of r

esid

enti

al u

nits

SUPPLY SUMMARY

Num

ber

of R

esid

enti

al u

nits

2009* 2010 2011 2012 2013 H12014

H22014

2015

Scheduled New Supply

ABU DHABI OFFICE SUPPLY (2009 - 2015)

0500

1,0001,500

2,0002,5003,0003,5004,000

Running Total New Supply Completed

155

1,8001,800 1,9552,495 2,872 3,121 3,206 3,257

541

377249 85 51

414

Source: UPC & MPM Properties Research *as per UPC

NLA

(in

00

0’s

Sqm

)

6

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | REAL ESTATE SUPPLY SUMMARY

2009* 2010 2011 2012 2013 H12014

H22014

2015 2016 2017/18


ABU DHABI RETAIL SUPPLY (2009 - 2017/18)

0

500

1,000

1,500

2,000

2,500

3,000

3,500


1,400 1,400

26

1,426

259 113185 82

262 66

662

1,685 1,798 1,982 2,065 2,327 2,327 2,393


0

5000

10000

15000

20000

25000

30000

Pre-2009 2009 2010 2011 20132012 H12014

H22014

2015 2016+


ABU DHABI HOTEL ROOM SUPPLY (2009 - 2016+)


4,3911,427

2,012

7,148 7,148

11,539 12,966 14,97817,126 18,993 20,317 20,914

22,967

2,1481,867 1,324

5972,053

2,923


NLA

(in

00

0’s

) pe

r Sq

mRo

oms

View towards Reem Island

7

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | REAL ESTATE SUPPLY SUMMARY

GOVERNMENT INITIATIVES CREATING JOBS, IMPROVING QUALITY OF LIFE AND CONNECTIVITY

�� Executive Council approved the following projects: AED12.7bn to be used for housing and community facilities projects, AED11.9bn for Government administration, AED3.1bn for economic projects, AED2.5bn for health sector projects and AED2.4bn for the education sector

�� Invitation to bid to local and international contractors for construction of the new Abu Dhabi-Dubai main road (E311)

REAL ESTATE AND CONSTRUCTIONBUILDING MARKET MOMENTUM

�� Aldar successfully launched two off-plan projects, Al Hadeel and Ansam, both of which received exceptional investor interest

�� Aldar announced that Yas Mall, Abu Dhabi’s largest mall will open to coincide with the final race of the 2014 Formula One World Championship

�� Tourism Development and Investment Company (TDIC) has issued a pre-qualification request to contractors to undertake enabling works for a residential development on North Beach on Saadiyat Island

FREEZONESINDUSTRIAL SECTOR TO AID FUTURE GDP GROWTH

�� Al Khaili group has signed a AED280 million musataha agreement for 50 years, to set up country’s first caustic soda and other chlorine derivatives manufacturing facility, to be used in various industry sectors

�� Abu Dhabi Aviation and AgustaWestland Aviation have formed a new partnership within Abu Dhabi airport free zone to provide expertise, skills and technical and logistic support in the helicopter field, in addition to a high maintenance level for more than 150 AgustaWestland Helicopters in the Gulf and Middle East region

�� Abu Dhabi Ports Company (ADPC) has awarded a AED20 million contract to construction firm Alba Tec for the second phase development of the Marfa Port in Al Gharbia. Under the deal, Alba Tec will build landside infrastructure and new marina facilities at the port

�� Wrightbus International, the company behind the London double-decker buses, has opened its Middle East headquarters in Masdar City, Abu Dhabi. The company will look to leverage its strategic base at Masdar City to respond to the region’s growing need for innovative, efficient and clean transportation

DEMAND DRIVERS – Q2 2014

Various initiatives collectively leading to increase in demand as new jobs are created and new ventures set up base in Abu Dhabi.

8

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | DEMAND DRIVERS

ETIHAD EXPANDING NETWORK TO 103 DESTINATIONS BY END OF THE YEAR

�� Introducing new destinations including Zurich, Rome, Dallas/Fort Worth, Los Angeles, Jaipur, Yerevan, and Madinah

�� Etihad looking to buy Alitalia to expand its network further

TOURISM INITIATIVES�� Zayed port to have a permanent cruise terminal in

two and a half years

�� Ferrari World Abu Dhabi to undertake a major expansion program, with plans to introduce new rides, enhance existing ones and enhance retail and F&B offerings. This project is expected to be completed in three years

�� Abu Dhabi Summer Season to feature as many as 62 events that will take place across the emirate of Abu Dhabi from 5th June to 31st August

Q2 2014 KEY EVENTSATTRACTING TOURISTS – BUSINESS AND LEISURE

�� Indian Premier League

�� World Professional Jiu-Jitsu Championship

�� Abu Dhabi Desert Challenge

�� Cityscape Abu Dhabi

�� HSBC Golf Business Forum

�� Al Gharbia Water-sports Festival

�� Justin Timberlake Concert on Yas Island

HEALTH CARE FACILITIES IMPROVING FACILITIES AND BUILDING TOWARDS ATTRACTING MEDICAL TOURISM

�� Abu Dhabi’s Burjeel Hospital is planning a US$1.5 billion expansion in Abu Dhabi over the next three years

�� Cleveland Clinic in Abu Dhabi announced that the AED 4.7 billion project – which will house 364 beds is due to open in 2015

9

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | DEMAND DRIVERS

CPI Rental Contribution to CPI

CPI VS RENTAL CONTRIBUTION TO CPI

Jan

-12

May

Ju

l

Ju

l

Jan

-13

Jan

-14

Source: SCAD and MPM Properties Research

97

100

99

98

101

102

103

KEY INDICATORS - STOCK MARKETvs. OIL vs. GOLD

AUD Murban - Crude GoldAUD Stock Index Dubai Stock Index

Source: Bloomberg

50

100

150

200

250

300

350

Ju

n-1

4

Jan

-14

Ju

l-13

Jan

-13

Ju

l-12

Dec-1

1

Ju

n-1

1

Jan

-11

MACRO TRENDS

REAL GDP GROWTH RATE 2013-2017

12.8%11.9% 11.7% 11.7% 11.6%

10.7% 10.5% 10.4%9.7% 9.6%

9% 8.7%

6.3%5.4%

4.8% 4.7%4%

0

3

6

9

12

15

Real est

ate

Acti

vit

ies

of

ho

use

ho

ld e

mp

loyers

Acco

mo

dati

on

& f

oo

d s

erv

ice

Man

ufa

ctu

rin

g

Co

nst

ructi

on

Bu

sin

ess

serv

ices

Wh

ole

sale

, re

tail

trad

e,

rep

air

of

mo

tor

veh

icle

san

d m

oto

rcycle

s

Tra

nsp

ort

ati

on

, st

ora

ge

an

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om

mu

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on

s

Fin

an

cia

l &

in

sura

nce

Art

s, r

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on

an

do

ther

serv

ices

Uti

litie

s: w

ast

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an

ag

em

en

t

Hu

man

healt

h &

so

cia

l w

ork

Pu

blic

ad

min

& d

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nce;

co

mp

uls

ory

so

cia

l se

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on

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min

ing

Ag

ricu

ltu

re, fo

rest

ryan

d f

ish

ing

Cru

de o

il &

natu

ral g

as

Source: DED

Perc

ent

Pric

e in

US$

10

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | MACRO TRENDS

REALTY STOCK INDEX - ABU DHABI vs DUBAI

Dubai realty index Abu Dhabi realty index

Source: Bloomberg

30

/06

/20

14

30

/05/2

013

28

/06

/20

12

31/

07/

20

11

31/

08

/20

10

30

/09

/20

09

30

/10

/20

08

29

/11/

20

07

31/

01/

20

07

0

50

100

150

200

250

300

350

ABU DHABI CITYBUSINESS LICENCE NUMBERS

New Business Licenses

Source: DED

20,000

15,000

10,000

5,000

0

Business License Renewals

Q1

20

10

Q2 2

010

Q3

20

10

Q4

20

10

Q1

20

11

Q2 2

011

Q3

20

11

Q4

20

11

Q1

20

12

Q2 2

012

Q3

20

12

Q4

20

12

Q1

20

13

Q2 2

013

Q3

20

13

Q4

20

13

Q1

20

14

BUSINESS CYCLE INDICES

Business Climate Index

Source: DED

Business Cycle Index

40

60

80

100

120

Q4

20

14Q

3 2

014

Q2 2

014

Q1

20

14Q

4 2

013

Q3

20

13Q

2 2

013

Q1

20

13Q

4 2

012

Q3

20

12Q

2 2

012

Q1

20

12Q

4 2

011

Q3

20

11Q

2 2

011

Q1

20

11Q

4 2

010

Q3

20

10Q

2 2

010

Q1

20

10

Driven by sound fundamentals and wise leadership, Abu Dhabi’s economy witnessed remarkable development during the last few years, demonstrating its resilience to different shocks in the global economy, backed by accelerating growth in the non-oil sectors.

Abu Dhabi’s real non-oil GDP growth was 5.9% in 2012, followed by 7.4% in 2013, according to the recent data released by the Statistics Center - Abu Dhabi (SCAD).

Looking ahead, and on the back of positive perspectives shown by different confidence indicators that the Department of Economic

Development (ADDED) is periodically building and releasing including the Consumer Confidence Index, Business Confidence Index and Business Cycle Indicator, the growth prospects look very positive.

In this connection, real GDP growth is forecasted to average 7.2% during the period 2014-2017, according to ADDED’s forecasts released early 2014.

Shorooq Abdulla Al Zaabi Head; Development Indicators

& Future Studies Division

Abu Dhabi Department of Economic Development

11

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | MACRO TRENDS

MARKET OVERVIEW Q2 2014

SUPPLY Strong demand for quality off-plan developments in established locations and phased supply of large developments have benefitted investors and end users alike.

New supply

The major new supply released to the market during Q2 2014 comprises apartments within the Gate District on Reem Island, including the phased release of units within Gate Towers and The Arc, which together have added 1,200 units to the market in the last three months.

Also on Reem Island, the B2 Tower at Marina Square, which has stood vacant since completion, has now been made available for sale. The tower comprises 202 apartments.

There have also been a small number of infill developments situated on the Abu Dhabi Island which have been completed in the last quarter, including Abu Dhabi Plaza which is mixed use development situated on Najda Street comprising 100 apartments, 70 office units and retail showroom space.

Upcoming Supply

As indicated in our Q1 report the real estate market in Abu Dhabi is entering into a period of growth sparked by rising values, population growth and improved investor sentiment.

This is being evidenced with multiple, previously stalled projects, now moving forward. In this connection we expect to see a surge in new development activity in the next 12 months, particularly within the Investment Areas as sub-developers commence projects to safeguard their position given the new 3 year time limit on planning consents and the improvement in financial viability.

15,000

12,000

9,000

6,000

3,000

02010


2011 2012 2013 H12014

H22014

2015 2016

Investment Area On-Island

ABU DHABI NEW HOUSING SUPPLY

Off-Island

5,135

2,221 2,863 2,411

2,925

2,013

382675

3,732 3,212

5,945

3,770

4,691

752

1,372

775

4,741

1,439 1,2002,550

2,326

2,3522,051

4,981

Num

ber

of r

esid

enti

al u

nits

12

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | RESIDENTIAL SECTOR

DEVELOPER LOCATION PROJECT SUMMARY

Aabar Raha Beach EastLow rise water fronting development comprising four buildings providing 435 apartments

Sheikh Faisal Raha Beach East Exclusive development of 15 water fronting apartments

Desax Properties Shams, Reem Island Qurm Views

Dhafir Shams, Reem Island Yasmina Residences

UNB Najmat, Reem Island Two residential towers comprising apartments

Bloom Abu Dhabi MarinaSubstantial mixed use development comprising 225 apartments, 57 serviced apartments, 3,000 sqm retail and a 200 key 5 star hotel.

Foundation Airport Road23 storey residential and commercial buildings with retail on the podium

Link International Properties Corniche 36-storey residential building

AWQAF Electra Street, Khalidiayh Residential tower with ancillary commercial comprising over 350 apartments

Sheikh Suroor Next to Beach Rotana Two residential towers comprising apartments

Off-plan market activity witnessed pent up investor demand with Aldar selling all the available apartments on the sales launch day itself. Aldar units can be sold in the secondary market only after the investors have paid 50% of the value, thus eliminating speculators.

The rental market has been stable with non-investment zones seeing flat rents with majority of the landlords focusing on maintaining higher occupancy vs. increasing rents. The rental increase on investment zones witnessed an increase of 5% to 12% as some of the prime developments have a healthy waiting list

Pre-2010* 2010 2011 2012 2013 H12014

H22014

2015 2016

CUMULATIVE RESIDENTIAL SUPPLY

Total Supply

0

50,000

100,000

150,000

200,000

250,0005.68%

187,473177,400

3.54%

194,101

6.19%

206,121

5.27%

216,993

1.15%

219,449

3.17%

226,454

2.60%

232,332

4.12%

241,914


Num

ber

of R

esid

enti

al U

nits

SELECTION OF UPCOMING RESIDENTIAL UNITS

13

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | RESIDENTIAL SECTOR

ADIB RENTAL INDEX ZONE COMMON TREND (Q1 2014) Q-Q CHANGE OVERALL AVERAGE

Zone A 0 to +5% +2.37%

Zone B +5% +3.86%

Zone C +5% +10.26%

Zone D +5% +9.07%

Zone E +5% +5.32%

Zone F 0 to +5% +3.26%

Zone G 0 to +5% +2.42%

Zone H 0 to +5% +5.31%

Zone I 0 to +5% +1.33%

Zone J 0 to +5% +1.55%

Zone K 0 to +5% +3.51%

THE ADIB RENTAL INDEX �� In the last 3 months MPM Properties have

renewed close to 2,000 tenancy contracts in Abu Dhabi on behalf of our landlord clients and granted over 400 new leases

�� Despite the removal of the rent cap 6 months ago, the ADIB Rental Index shows that the common trend is 0 to +5% increase during Q2 2014

�� There are exceptions where rents have increased by over 20% and in some cases much

higher, however such cases are very limited (representing in overall terms less than 5% of the portfolio) and relate predominantly to the bottom end of the rental market typically with rents below AED 40,000 per annum

�� The rents are currently being adjusted to last achieved rents in 2013, while Government tenants have been allowed by respective landlords to renew their rents with minimum or no increase at all

ADIB RENTAL INDEX NOTES �� The ADIB Rental Index relates to the

performance of the ADIB portfolio only and the data is derived exclusively from transactions completed by MPM Properties

�� The ADIB Portfolio in Abu Dhabi comprises over 12,000 units (70% apartments, 30% villas) with a spread of quality situated both on the Abu Dhabi Island and the growing Off-Island areas

�� We have produced the ADIB Rental Index with a view to enhancing transparency in the Abu Dhabi real estate market and to provide

a credible market indicator for rental trend movements

�� Rental Index Zones are identified on the map at the rear of this report

�� The quality, age of the building and access to facilities and amenities (gym, swimming pool, underground parking, etc.) have a direct impact on the rents. In most cases a brand new two-bedroom with access to facilities and amenities will be more expensive than a three-bedroom in a 10 year old building with no facilities and amenities

Note: for zone boundaries please see map at the rear of this report.

14

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | ADIB RENTAL INDEX

ADIB RENTAL INDEX

<0% to -5%

0% to +5%

5%

+5% to +10%

+10% to +20%

+20% & Higher

-20% & Lower

-5% to -10%

<0% to -5%

0% to +5%

5%

+5% to +10%

+10% to +20%

+20% & Higher

UNIT TYPE RENTAL RANGE (Q2 2014)

HIGH LOW AVERAGE

Studio 60,000 33,000 38,000

1B A 65,000 20,000 48,000

2A A 110,000 30,000 65,000

3B A 150,000 30,000 87,000

5B V 305,000 195,000 225,000

ZONE C

Q-Q CHANGE (AVRG.) HIGH LOW TREND

+10.26% +110% -13% 0 to +5%


HIGH LOW AVERAGE

1B A 65,000 33,000 49,000

2B A 100,000 55,000 73,000

3B A 121,000 57,000 88,000

5B V 220,500 220,500 220,000

ZONE B


+3.86% +74% -6% + 5%

-10% to -20%

-5% to -10%

0% to -5%

0% to +5%

5%

+5% to +10%

+10% to +20%

+20 & Higher


HIGH LOW AVERAGE

2B A 120,000 63,000 99,000

3B A 120,000 85,000 101,000

ZONE A


+2.37% +16% -14% 0 to +5%

15

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | ADIB RENTAL INDEX


HIGH LOW AVERAGE

1B A 65,000 15,000 57,000

2B A 80,000 42,000 67,000

3B A 131,000 40,000 81,000

5B V 336,000 168,000 234,000

ZONE D


+9.07% +99% -8% 0 to +5%


HIGH LOW AVERAGE

1B A 75,000 25,000 61,000

2B A 85,000 50,000 68,000

3B A 160,000 75,000 117,000

-10%n to -20%

-5% to -10%

0% to -5%

0% to +5%

5%

+5% to + 10%

+10% to +20%

+20% & Higher

-10% to -20%

-5% to -10%

0% to -5%

0% to +5%

5%

+5% to +10%

+10% to 20%

+20% & Higher

ZONE E

ZONE F


HIGH LOW AVERAGE

1B A 50,000 45,000 46,000

2B A 70,000 28,000 62,000

3B A 147,000 57,000 95,000

5B V 255,000 178,000 216,000


+5.32% +69% -0% 0 to +5%


+3.26% +28% -4% 0 to +5%

-10% & -20%

-5% to -10%

<0% to -5%

0% to +5%

5%

+5% to +10%

+10% to +20%

+20% & Higher

16



HIGH LOW AVERAGE

1B A 45,000 24,000 33,000

2B A 105,000 20,000 69,000

5B V 220,000 189,000 204,000


HIGH LOW AVERAGE

1B A 43,000 43,000 43,000

2B A 115,000 40,000 77,000

3B A 185,000 70,000 123,000

5B V 270,000 102,000 190,000


HIGH LOW AVERAGE

4B V 150,000 120,000 133,007

5B V 262,000 130,000 185,212

ADIB RENTAL INDEX

0% to +5%

5%

+5% to +10%

+10% to +20%

0% to -5%

0% to +5%

5%

+5% to +10%

+10% to +20%

+20% & Higher

0% to -5%

0% to +5%

5%

+5% to 10%

+10% to 20%

+20 & Higher

ZONE H


+1.33% +20% -3% 0 to +5%


+5.31% +59% -4% 0 to +5%


+2.42% +19% 0% 0 to +5%

ZONE G

ZONE I

17

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | ADIB RENTAL INDEX

0% to +5%

5%

+5% to + 10%


+1.55% +9% -0% 0 to +5%

ZONE J


HIGH LOW AVERAGE

4B V 225,000 120,000 147,000

5B V 185,000 115,000 146,000


HIGH LOW AVERAGE

1B A 50,000 35,000 40,000

2B V 70,000 30,000 53,810

4B A 150,000 93,000 118,000

5B V 202,000 115,000 168,000


+3.51% +74% -37% 0 to +5%

-10% to -20%

0% to +5%

5%

+5% to +10%

+10% to +20%

+20% & Higher

ZONE K

18


Q2 2014 - RESIDENTIAL AREA MARKET PERFORMANCEINVESTMENT AREA Q2 2014 - RENT (AVG.) Q2 2014 - SALE (AVG. PRICE / SQ.FT) Q2 2014 ( AVG. NET YIELD)

Studio 1BR 2BR 3BR Studio 1BR 2BR 3BR Studio 1BR 2BR 3BR

Al Raha Beach

Al Bandar 108,500 140,000 177,000 244,000 2,100 1,900 1,800 1,750 6.0% 5.4% 4.3% 4.0%

Al Zeina 90,000 156,000 200,000 1,600 1,500 1,300 4.0% 4.0% 4.1%

Al Muneera 108,000 150,000 185,000 1,600 1,400 1,500 5.7% 4.5% 4.3%

Al Reem Island

Marina Square 70,000 92,000 133,000 187,000 1,600 1,400 1,450 1,500 6.6% 6.1% 5.3% 5.0%

Sun & Sky 103,000 147,000 173,000 1,650 1,650 1,700 5.4% 4.9% 4.6%

Gate Towers 72,500 90,000 133,000 177,000 1,660 1,550 1,500 1,500 6.4% 5.7% 4.7% 4.7%

Shams 88,000 134,000 167,000 1,300 1,400 1,500 1,400 5.4% 5.8% 4.6%

Saadiyat Island

Saadiyat Beach Residence 110,000 165,000 215,000 1,725 1,670 1,595 5.4% 5.1% 5.7%

St. Regis Apartments 95,000 135,000 195,000 265,000 2,850 2,585 2,475 1,950 4.1% 4.0% 4.0% 4.1%

Al Reef Downtown 58,700 74,500 90,000 113,000 1,300 960 900 880 7.9% 6.9% 6.3% 6.6%

Al Ghadeer 44,500 60,000 85,000 133,000 1,100 1,060 1,040 1,030 7.1% 6.8% 5.0% 4.3%

Non - Investment Zone - Prime 95,000 120,000 160,000 210,000

Note: average net yield calculated adopting average unit size per type.

INVESTMENT AREA Q ON Q - CHANGE (LEASE) Q ON Q - CHANGE (SALE) Q ON Q - CHANGE (NET YIELD)

Studio 1BR 2BR 3BR Studio 1BR 2BR 3BR Studio 1BR 2BR 3BR

Al Raha Beach

Al Bandar 21% 12% 4% 0% 31% 23% 16% 17% -0.1% -0.7% -1.8% -1.9%

Al Zeina -5% 16% 8% 10% 3% -7% -1.4% -1.5% -1.5%

Al Muneera 8% 3% -3% 3% -7% 0% 0.1% -1.4% -1.2%

Al Reem Island

Marina Square 4% 8% 11% 7% 16% 4% 7% 13% 0.1% 0.3% -0.2% -0.4%

Sun & Sky 3% 9% -1% 6% 8% 11% 0.0% -0.5% -0.8%

Gate Towers 7% 6% 6% 8% 4% -3% -5% -5% 0.3% -0.1% -0.8% -0.4%

Shams 10% 7% -1% 0% 7% 2% 0.3% 0.7% -0.4%

Saadiyat Island

Saadiyat Beach Residence 10% 6% 10% 5% 11% 6% 0.1% -1.2% -0.9%

St. Regis Apartments 6% 0% 5% 10% 27% 15% 18% 5% -0.8% -0.9% -0.2% 0.4%

Al Reef Downtown 7% -7% -5% -2% 24% -2% -5% -2% 0.9% -0.3% -0.5% 0.4%

Al Ghadeer 11% 9% 13% 16% 9% 5% 4% 3% 0.6% 0.2% -0.3% -1.9%

Non - Investment Zone - Prime 12% 9% 7% 5% N/A N/A N/A N/A

19

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | RESIDENTIAL MARKET PERFORMANCE

20

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | RESIDENTIAL SECTOR

INVESTMENT AREAS – HISTORIC SALES AND RENTAL TRENDS

Al Bandar

AL RAHA BEACH - PRICE MOVEMENT

Al ZeinaAl Muneera IslandAl Muneera Mainland

Q1

20

08

Q2 2

00

8Q

3 2

00

8Q

4 2

00

8Q

1 20

09

Q2 2

00

9Q

3 2

00

9Q

4 2

00

9Q

1 20

10Q

2 2

010

Q3

20

10Q

4 2

010

Q1

20

11Q

2 2

011

Q3

20

11Q

4 2

011

Q1

20

12Q

2 2

012

Q3

20

12Q

4 2

012

Q1

20

13Q

2 2

013

Q3

20

13Q

4 2

013

Q1

20

14Q

2 2

014

50

100

150

200

St Regis Apartments

SAADIYAT ISLAND - PRICE MOVEMENT

Saadiyat Beach Residences

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014

Q22014

90

120

150

Sun & Sky Towers

AL REEM ISLAND - PRICE MOVEMENT

Marina SquareThe Gate

Q1

20

08

Q2 2

00

8Q

3 2

00

8Q

4 2

00

8Q

1 20

09

Q2 2

00

9Q

3 2

00

9Q

4 2

00

9Q

1 20

10Q

2 2

010

Q3

20

10Q

4 2

010

Q1

20

11Q

2 2

011

Q3

20

11Q

4 2

011

Q1

20

12Q

2 2

012

Q3

20

12Q

4 2

012

Q1

20

13Q

2 2

013

Q3

20

13Q

4 2

013

Q1

20

14Q

2 2

014

60

90

120

150

Al Reef

MAINLAND INVESTMENT AREAS - PRICE MOVEMENT

Al Ghadeer

Q1

20

08

Q2 2

00

8Q

3 2

00

8Q

4 2

00

8Q

1 20

09

Q2 2

00

9Q

3 2

00

9Q

4 2

00

9Q

1 20

10Q

2 2

010

Q3

20

10Q

4 2

010

Q1

20

11Q

2 2

011

Q3

20

11Q

4 2

011

Q1

20

12Q

2 2

012

Q3

20

12Q

4 2

012

Q1

20

13Q

2 2

013

Q3

20

13Q

4 2

013

Q1

20

14Q

2 2

014

50

100

150

200

(% C

hang

e)

(% C

hang

e)

(% C

hang

e)

(% C

hang

e)

21

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | RESIDENTIAL MARKET PERFORMANCE

RENTAL TRENDS

Reem Island

1 BEDROOM

Al Raha Beach

Saadiyat Island

Q2 2

010

Q3

20

10

Q4

20

10

Q1

20

11

Q2 2

011

Q3

20

11

Q4

20

11

Q1

20

12

Q2 2

012

Q3

20

12

Q4

20

12

Q1

20

13

Q2 2

013

Q3

20

13

Q4

20

13

Q1

20

14

Q2 2

014

90

120

150

Reem Island

2 BEDROOM

Al Raha Beach

Saadiyat Island

Q2 2

010

Q3

20

10

Q4

20

10

Q1

20

11

Q2 2

011

Q3

20

11

Q4

20

11

Q1

20

12

Q2 2

012

Q3

20

12

Q4

20

12

Q1

20

13

Q2 2

013

Q3

20

13

Q4

20

13

Q1

20

14

Q2 2

014

90

120

150

Reem Island

4 BEDROOM

Al Raha BeachSaadiyat Island

Q2 2

010

Q3

20

10

Q4

20

10

Q1

20

11

Q2 2

011

Q3

20

11

Q4

20

11

Q1

20

12

Q2 2

012

Q3

20

12

Q4

20

12

Q1

20

13

Q2 2

013

Q3

20

13

Q4

20

13

Q1

20

14

Q2 2

014

90

120

150

Reem Island

3 BEDROOM

Al Raha BeachSaadiyat Island

Q2 2

010

Q3

20

10

Q4

20

10

Q1

20

11

Q2 2

011

Q3

20

11

Q4

20

11

Q1

20

12

Q2 2

012

Q3

20

12

Q4

20

12

Q1

20

13

Q2 2

013

Q3

20

13

Q4

20

13

Q1

20

14

Q2 2

014

90

120

150

(% C

hang

e)

(% C

hang

e)(%

Cha

nge)

(% C

hang

e)

22

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | RENTAL TRENDS

ABU DHABI CITYSCAPE SUMMARY Cityscape Abu Dhabi 2014 (8th edition), ran from 22-24 April 2014, with participation from 80 countries, 131 exhibitors and 14,112 visitors. In total over 17,000 participants (visitors, exhibitor and media personnel) were attracted to the event, a 15% increase year-on-year growth, a positive indicator of renewed market confidence with healthy demand for quality projects and investment opportunities within Abu Dhabi.

The participants included many of the key Abu Dhabi based developers and government entities, including Abu Dhabi Urban Planning Council, Abu Dhabi Municipality, Aldar Properties, Mubadala Real Estate & Infrastructure, Arabtec, Al Maabar, Tamouh, Bloom Properties, Baniyas Investments, Masdar, Farglory, Hydra Properties, Eshraq, MPM Properties, Emirates Steel, Wahat Al Zaweya and Abu Dhabi Islamic Bank, among others. 26% of the exhbitors were International entities led by major developers from Turkey, Egypt, USA, Russia, UK, and Oman.

PROJECT DEVELOPER PROJECT DETAILS STATUS

Al HadeelAldar

Location: Al Bandar, Raha BeachUnit details: 230 units Unit mix: Studios, 1-3 Bedrooms apartment, 3-5 Bedroom Townhouses and Duplexes.Unit sizes: From 606-3,530 sqftPayment Plan: 10% down; re-sale only after 50% has been paid.Open to: All nationalities

Sales Update: All units available for purchase sold on first day of sales launch (May 18th), with property prices ranging from Dh1,350 to Dh1,450psf for an apartment.Construction Progress: Construction is expected to commence in 2015.

The Ansam Aldar

Location: Yas IslandUnit Details: 540 apartments; Unit Mix: Studio, 1,2 and 3 bedrooms; Unit sizes: From 482-2,180 sqftPayment Plan: 10% down; re-sale only after 50% has been paid.Open to: All nationalities

Sales Update: Approximately 300 units out of 540 were sold off-plan during the launch, apartments achieved sales prices of Dh1,450 to Dh1,550psf. 2nd sales to sell remaining invento-ry was launched on 14th June.Construction Progress: Construction is expected to commence in 2015.

Villa Plots on Nareel Island Aldar

Location: Al BateenPlot Details: 143 plots (1,000-5,000 sqm)Villa GFA: (919-3,148 sqm)Price: Not yet announcedOpen to: UAE Nationals only

Sales Update: No launch date announced yet.Construction Progress: No update

Al Reef 2 Manazel

Location: Close to KizadUnit details: 800 villas; Phase I -500 units, Phase II -300 unitsUnit sizes: Starting from 2,792 sq.ft.Open to: All nationalities

Sale launch: Expected soon. Construction Progress: Not started

Rancho GhantoutArabtec Properties

Location: Ghantout; 5kms from Dubai borderUnit details: 310 high-end villasUnit mix: The villas will be of 3, 4, and 5 bedrooms.Unit sizes: GFA: 8,000 sq.ft.+; Plot size: 20,000 sq.ft.+Open to: TBC

Project Status: Arabtec Real Estate launched the project in April 2014. Master plan and feasibility studies are underway. Construction Start: To be announced.

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | CITYSCAPE SUMMARY

23

PROJECT DEVELOPER PROJECT DETAILS STATUS

The Views, Saraya 1Arabtec Properties

Location: R01, Saraya, Corniche Details: 46-storey ; Plot size: 2,121 sqm ; BUA 45,619 sqm Unit Matrix:

Car park: 147 parking spacesOpen to: UAE Nationals only

Sales update: Arabtec to test sales market.Construction Progress: Due to complete by Q1 2015.

The Views, Saraya 2ArabtecProperties

Location: R02, Saraya, CornicheDetails: 40-storeys ; Plot size: 1,895 sqm ; BUA: 38,886 sqmUnit Matrix:

Car park: 130 parking spacesOpen to: UAE Nationals only

Construction Progress: Due to complete by Q1 2015

C-13ArabtecProperties

Location: Gate District, Al Reem IslandUnit Details: 630 apartments; 184 serviced apartmentsUnit Mix: Apartments (1,2 and bedrooms); serviced apart-ments (studio, 1 and 2 bedroom)Amenities: Swimming pool (4,130 sq.m.); gym (785 sq.m.); Spa (857 sq.m.)Other components: Retail (4,600 sq.m.) – 4 shops; Hotel – 398 keysThe project was designed by APGOpen to: All nationalities

Construction Progress: Main construction contract has been awarded to Arabtec on 14 January 2014.. Construction duration is 36 months.

Al Maryah Plaza Farglory

Location: EW11, Al Maryah IslandUnit Details: 144 apartmentsUnit Mix: 1,2 and 3 bedrooms + penthouseAdditional details: Designed by Richard Rogers and PartnersOpen to: All nationalities

Cityscape Sales Launch: at AED3,200 / sq.ft. onwards; 200 registered new clients and have achieved 10% more off-plan sales than antici-pated by Farglory.Construction Progress: Started on site with completion scheduled for 2016.

Hydra Avenue Hydra

Location: EW11, Al Maryah IslandUnit Details: 144 apartmentsUnit Mix: 1,2 and 3 bedrooms + penthouseAdditional details: Designed by Richard Rogers and PartnersOpen to: All nationalities

Cityscape launch: Off-plan launch price at AED1,050 / sq.ft. Up to 5% discount of-fered. Handover of units at Hydra Avenue, a three-tower cluster is to start in August 2014.Construction Progress: Started on site with completion scheduled for 2016

Masdar City Masdar

Location: Masdar, next to Abu Dhabi AirportInvestment opportunity: Plots available to purchase and design and build options available.Key Features: Key infrastructure established; flexible master plan

N/A

Gate Towers - Penthouse Aldar

Location: Al Reem IslandUnit Details: 21 penthousesProject details: The project, designed by the US architect Arquitectonica, includes the world’s highest penthouse bridge structure, bringing the building to a total height of 245 metres. The bridge contains 21 penthouses, all of which comprise at least 4,000 square feet and most con-tain their own private swimming pools and gardens.

The penthouses prices are available on request.

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | CITYSCAPE SUMMARY

Simplex 4BR 8

Simplex 3BR 48

Duplex 7

Townhouse Triplex 4BR

48

Simplex 3BR 3

Simplex 4BR 13

Duplex 3BR 29

Duplex 4BR 4

Penthouse 4BR 2

Penthouse Duplex 5BR

1

Total Units 74

Triplex 4BR 2

Penthouse Duplex 5BR

1

Total Units 48

24

VILLA VALUES – NON-INVESTMENT AREASThe below analysis is based on the data gathered from the transactions financed by ADIB for villas in non-invesment zones and highlights the current prevailing prices and yields.

�� Our analysis shows that villa compounds in KCA, MBZ and Shakbout city continue to transact with healthy demand from investors. Five to six-bedroom villas on the main island are commanding 15% to 20% premium over the villas in KCA and MBZ, whilst seven to eight-bedroom villas are commanding 30% to 40% premium

�� Khalifa City A continues to be the most expensive off-island area, followed by Mohammed Bin Zayed City and Shakbout City, although our analysis for transactions in Q2 shows that given the lower price point the less expensive areas do on average enjoy a higher gross rental yield

0

5

10

15

20

VILLA COMPOUND PRICES (Q2 2014)

Main island KCA MBZ Shakbout City

Note: Data relates to compounds of 4 to 6 villas

Low AverageHigh

5/6 BEDROOM VILLA PRICES (Q2 2014)

Main island KCA MBZ

Low AverageHigh

0

2

4

6

8

10


7/8 BEDROOM VILLA PRICES (Q2 2014)

Main island KCA MBZ

Low AverageHigh

0

5

10

15

20

VILLA COMPOUND GROSSYIELDS (Q2 2014)8.60%

8.40%

8.20%

8.00%

7.80%

7.60%

7.40%

7.20%

7.00%

Main island KCA MBZ Shakbout City

AED

(M

illio

n)A

ED (

Mill

ion)

AED

(M

illio

n)

25

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | VILLA VALUES

TAMOUH: FOCUS ON REEM ISLANDTrue to its mission of building communities that create a lifestyle of comfort, productivity and ease to their residents, Abu Dhabi based Tamouh has been steadily developing projects centered around residential, commercial and mixed-use communities that provide a lasting, positive impact to Abu Dhabi and the United Arab Emirates.

Tamouh offers a diverse portfolio of properties. With a long-term outlook, its growth plans address every aspect of real estate development and allow the company to support Abu Dhabi government‘s vision for the emirate.

Tamouh’s latest development is City of Lights on Reem Island, which is currently under construction and is soon expected to be ready for partial handover.

Tamouh’s projects on Reem Island:

Spread across 6.5 million square meters, Reem Island is one of the largest mixed-use developments in Abu Dhabi. Reem Island is being developed by three master developers - Tamouh, Aldar and Reem Investments.

Work on Reem Island started in 2006 and continues to bring to life its part in the vision of Abu Dhabi 2030. Reem Island has been planned to accommodate a total built-up area of 215 million square feet and will be home to approximately 200,000 residents once completed.

Tamouh’s first phase of development in Reem Island was Marina Square, a community of 13 residential buildings, an office tower and a commercial mall.

After the delivery of Marina Square, Tamouh’s main focus on Reem Island turned to City of Lights,

developed across approximately 162 acres of land. The residential and commercial community features a range of office and residential towers, commercial space, hotels and service suites, marina facilities and parks.

City of Lights is made up of around 69 plots, including the following:

�� 52 residential towers with a GFA of 1,721,633 square metres, offering 12,477 residential units.

�� 8 office towers with a GFA of 426,670 square metres including the podium.

�� 2 luxury hotels with a GFA of 76,506 square metres, which will consist of up to 450 rooms.

�� 5 retail plots with a GFA of 95,187 square metres with podium space and facilities including gym, spas, and shopping arcades.

�� 1 mixed development plot offering residential and office units, and 1 mixed development plot offering residential apartments and serviced hotel apartments.

City of Lights will offer a wide range of amenities and facilities to include more than 29,000 car park spaces, swimming pools, wading pools, children playgrounds, promenade, mosques, parks, marina facility, day care centre, as well as an amphitheatre.

There are currently 9 towers under construction in City of Lights, all of which have completed structural works along with other facility works, and are presently finishing facade installations in order to be handed over soon.

KEY INDUSTRY PLAYERS – MARKET VIEW

Anshu Shukla Commercial Director

Tamouh

*The content and information is provided on an “as is” basis and Tamouh has the right to change the content from time to time

with or without notice.

26

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | KEY INDUSTRY PLAYERS – MARKET VIEW

City of Lights Construction in progress (June 2014)

27

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | KEY INDUSTRY PLAYERS – MARKET VIEW

SUPPLY Speculative development slowdown signals office market approaching a turning point in the current cycle.

Q2 2014

�� A total of 19,000 sqm of office space was added to the market in Abu Dhabi during the last 3 months bringing the total stock to 3.21 sqm NLA

�� New additions include Abu Dhabi Plaza comprising a mixed-use development situated on Najda Street with 100 apartments and 15,296 sqm (NLA) of office space

�� In addition, a number of infill office developments on the Abu Dhabi Island have been completed this quarter, including Plot C 69 on Muroor Street at the junction with 15th Street

�� Q2 witnessed quality offices being leased to corporate tenants at a healthy pace, which in turn has led to a reduction in office vacancy rates for good quality towers with facilities, amenities and parking space

INVESTMENT ZONES – INCREASING NEW SUPPLY

�� Al Reem Island will see an increase in office stock being handed over in the second half of the year. This will allow investors and corporate tenants additional options for owning offices, especially as the potential net yields are above 8% (net)

�� The majority of the towers in Investment zones have multiple landlords, which will have an impact on interest from large corporate tenants looking to take multiple floors, as they would be required to have multiple lease agreements with different landlords

OUTLOOK

�� In contrast with 2014, 2015 is set to witness the handover of approximately 414,000 sqm of new offices, although this number is inflated by the 74 story ADNOC HQ.

�� The most significant speculative developments under construction and anticipated for delivery in 2015 include the Al Hilal Bank Tower on Maryha Island and Addax Tower within the City of Lights development on Reem Island.

�� Post 2015, with the exception of handover delays of existing projects , there are minimal new office developments in the pipeline. This signals that the market is approaching the end of 5 year speculative driven development cycle which should allow the market time to absorb the current supply and see growth in occupancy levels and values for Grade A offices over the course of the next 2 years

2009* 2010 2011 2012 2013 H12014

H22014

2015


ABU DHABI OFFICE SUPPLY (2009 - 2015)

0500

1,0001,500

2,0002,5003,0003,5004,000


155

1,8001,800 1,9552,495 2,872 3,121 3,206 3,257

541

377249 85 51

414


NLA

(in

00

0’s

Sqm

)


28

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | OFFICE SECTOR

2010 2011 2012 2013 2014 2015

ABU DHABI NEW OFFICE SUPPLY COMPOSITION

Speculative Owner Occupation / Pre-let

67

105

45

80

190

9

0

100

200

300

400

500

600

146

474

272203

56

223


2010 2011 2012 2013 2014 2015

ABU DHABI NEW OFFICE SUPPLY LOCATION

On-Island Off-Island Investment Area

0

100

200

300

400

500

600

64

275

62

80

8

62

216

29

125202 235 241

116

182

180

17

TOTAL NEW OFFICE SUPPLY

0 200 400 600 800 1000 1200

NLA (in 000’s sqm)

1,099

175

597

Source: UPC & MPM Properties Research

NLA

(in

00

0’s

Sqm

)N

LA (

in 0

00

’s S

qm)

29

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | OFFICE SECTOR

TAKE-UP & RENTS Grade A offices continue to see occupancy levels improve.

�� The last three months have witnessed healthy demand for Grade A offices, leading to improved occupancy levels. Sowwah Square offices are still on hold, which has benefited some other Grade A offices

�� 2014 witnessed no new major speculative developments being announced . This is a healthy sign for the office market and will lead to strengthening of office rents in the coming years

�� Government sector continues to dominate the office space take-up

�� Real growth in the sector will only be achieved as new jobs are created and new businesses open offices in Abu Dhabi

OUTLOOK

�� Given the relative low levels of new supply entering the market during 2014, combined with an improvement in corporate activity,

we expect to see the vacancy rate to fall during the course of the year within the Grade A developments, driven predominantly by a continuation of movement of existing companies upgrading to better quality offices

�� Grade B offices will continue to see high vacancy levels and weak demand which will see a widening in rental performance compared with Grade A offices

�� A key catalyst for attracting new entrants to the market in the coming months will be the Abu Dhabi Global Market Freezone on Maryah Island

Headline office rents have moved up slightly on average during the last 3 months across all grades.

Grade A Fitted Grade A S&C Gade B

HEADLINE OFFICE RENTS

0

500

1,000

1,500

2,000

1,7501,475

1,025Grade A Fitted Grade A S&C Gade B

HEADLINE OFFICE RENTS

0

500

1,000

1,500

2,000

1,7501,475

1,025

Rent

per

Sq.

m.

30

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | OFFICE SECTOR

�� Sales volumes have improved in Q2 2014 with healthy interest from investors and some owner occupiers, especially from GCC

�� Most transactions were for full floors

AVERAGE OFFICE SALES PRICE

0

300

600

900

1,200

1,500

Prestige Tower - MBZTamouh TowerAddax Office TowerSky Tower

1,0451,1751,4501,460

Sale

s Pr

ice

/ Sq

.ft.

31

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | OFFICE SECTOR

90% 897,000

9% 86,400

District Neighbourhood Regional Super Regional

SUPPLY Close to 1 million sqm of new retail space scheduled for delivery in the next 4 years.

�� There have been no major additions to the retail market during the last three months with total retail stock standing at 2.06 million sqm NLA, with approximately 50% of this comprising non mall space

�� The much anticipated Yas Mall, which will be the largest mall in Abu Dhabi at 235,000 sqm, is scheduled to open during the F1 weekend in November and is reportedly 90% leased with a number of new concepts coming to Abu Dhabi for the first time. Yas Mall is currently the only super regional mall under construction in Abu Dhabi and is expected to create the city’s first lifestyle destination, providing over 300 retail stores in addition to entertainment and leisure attractions

�� The main retail brand additions to the Abu Dhabi market in 2014 have been “House of Frasers”, F&F (Tesco’s affordable fashion brand), while major F&B additions have been BOA steakhouse at Eastern Mangroves, Zuma at Galleria on Al Mariyah Island and PF Chang’s at Abu Dhabi World Trade Center Mall

�� Kuwait’s National Real Estate Company has appointed the architects “RTKL Associates” for their Reem Mall on Al Reem Island. The mall when complete is expected to have over 450 stores and 85 restaurants. As per NREC, the mall is expected to start construction in 2015 and complete by 2018

42% 163,723

9% 33,000

49% 188,171

75% 494,994

2% 22,800

22% 147,000

RETAIL SUPPLY PRE-2010 NEW SUPPLY DELIVERED 2010-2013

RETAIL SUPPLY AS AT Q2 2014RETAIL MALLS DEVELOPMENT PIPELINE

The above charts show supply of malls only and exclude all street retail. Figures are NLA (sqm)


1% 7,000

63% 658,7175%

55,800

32% 335,171

2009* 2010 2011 2012 2013 H12014

H22014

2015 2016 2017/18


ABU DHABI RETAIL SUPPLY (2009 - 2017/18)

0

500

1,000

1,500

2,000

2,500

3,000

3,500


1,400 1,400

26

1,426

259 113185 82

262 66

662

1,685 1,798 1,982 2,065 2,327 2,327 2,393


NLA

(in

00

0’s

) pe

r Sq

m

32

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | RETAIL SECTOR

95% 938,400

2% 25,000

On-Island Off-Island Investment Area

TAKE-UP & RENTS

Vacancy Rate (Q2 2014)

�� Based on our survey of the Regional and District Malls we estimate there is approximately 97,670 sqm of retail space currently vacant and available for lease, representing an overall vacancy rate of approximately 9% amongst this sub-sector. The majority of available space is situated in the Off-Island malls, which have current vacancy levels ranging from 9-35% (improving from 30-40% 12 months ago).

�� A young population, strong brand association, solid household consumption and modern retail concepts coupled with a flourishing tourism sector continue to provide ideal conditions for retail growth in Abu Dhabi.

�� Yas Mall currently has approximately 10% vacancy rate and the mall is expected to be fully let in the coming months.

New Brands In Q2

The rents quoted above are base rents excluding any turnover provisions and service charges.

91% 349,894

35% 35,000

36% 227,741

56% 357,853

8% 54,200

Leopold’s of London Galleria

Wildfire Galleria

Godiva Galleria

Kenzo Galleria

Sushi Art Galleria

BOA Steakhouse Eastern Mangroves

P.F Chang’s WTC Mall

B&B Italia Al Ain Tower

SPACE TYPE AVERAGE RENT (AED) PA

Specialty Store 1,800-3,800 per sqm

Anchor Store (more than 1,000 sqm) 300-1,200 per sqm

F & B 3,500-5,500 per sqm

ATM’s 100,000-175,000

Kiosks 85,000-150,000

H. Street retail (Prime areas) 2,500 – 3,750 per sqm

H. Street retail 1,550-2,550 per sqm

PRE-2010 NEW SUPPLY ADDED POST 2010 RETAIL DEVELOPMENT PIPELINE RETAIL SUPPLY LOCATION AS AT Q2 2014

3% 27,000

57% 577,635

38% 392,853

5% 54,200

RETAIL SPACE CLASSIFICATION

33

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | RETAIL SECTOR

�� Growth in guest arrivals into Abu Dhabi (up by 34% in Q2 2014 vs. Q2 2013), driven by a significant uplift in MICE and business events (including a Chinese company event hosted in Abu Dhabi) has improved trading performance across the sector, despite the increase in supply

�� Five-star hotels continue to lead on revenue with average spend per guest at AED2,966 vs. the hotel establishment average spend per guest of AED1,890

�� 4,3 and 2 star hotels have experienced occupancy levels above 80% so far this year

0

100

200

300

400

500

600

700

800

Jan

-20

13

Feb

Mar

Ap

r

May

Ju

n

Ju

l

Au

g

Sep

Oct

No

v

Dec

Jan

-20

14

Feb

Mar

Ap

r

May

HOTEL PERFORMANCE SNAPSHOT

ARR RevPar Occupancy

66% 66%62%

49%

60%

68%

78%84%

72%76%

81% 80% 79%74%76%

73% 72%

321

474

359 345

274218

158

251

421

553

330379366 358

297

375

210

Source: TCA Abu Dhabi and MPM Properties Research

Q2 PERFORMANCE BY RATING

Q2 2014 VS. Q2 2013 (YTD)

HOTELS 5 STAR 4 STAR 3 STAR 2 STAR 1 STAR

Guests 545,050 395,490 254,310 20,725 56,397

Guest Nights 1,555,658 973,024 667,604 47,423 99,630

Avg. Length of Stay 2.85 2.46 2.33 2.29 1.77

Occupancy 72.4% 77.5% 81.4% 80% 75.3%

ARR 675 360 281 290 291

Revenues (Mil.) 489 279 229 232 219

Guests 34% increase

Guest Nights 26% increase

Avg Length of Stay 9% decrease

Occupancy 15% increase

Revenues (Mil.) 6% increase


34

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | HOSPITALITY SECTOR – TRADING PERFORMANCE

�� Hotel apartments continue to witness higher occupancy and average length of stay vs. hotels

�� Average guest spend was highest within the Deluxe Apartments at AED2,589 higher than four-star hotels and second only to 5 star hotels

�� Q2 witnessed an increase in all key parameters for hotel apartments, highlighting a healthy trend for the sub-sector

Jan

-20

13

Feb

Mar

Ap

r

May

Ju

n

Ju

l

Au

g

Sep

Oct

No

v

Dec

Jan

-20

14

Feb

Mar

Ap

r

May

HOTEL APARTMENTS PERFORMANCE SNAPSHOT

ARR RevPar Occupancy

289

325292 280

252 259233

277306

348303 310311

295 287303

257

Source: TCA

0

50

100

150

200

250

300

350

40085%

79% 80%75%

79%85%

88%92%

89% 90% 90%85% 86% 84%

90%86% 84%

Q2 2014 VS. Q2 2013 (YTD)

Q2 PERFORMANCE BY RATING

Guests 8% increase

Guest Nights 13% increase

Occupancy Levels 7% increase

Revenues (Mil.) 9% increase

Average Length of stay 5% increase

HOTELS DELUX SUPERIOR STANDARD

Guests 57,451 60,956 45,563

Guest Nights 457,671 381,583 192,802

Avg. Length of Stay 7.97 6.26 4.23

Occupancy 88% 84% 85%

Revenues (Mil.) 148,728,119 82,806,376 40,188,598

ARR 432 287 263

RevPar 380 241 224

35

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | HOSPITALITY SECTOR – TRADING PERFORMANCE

HOSPITALITY SECTOR – TRADING PERFORMANCE

2014 – SCHEDULED HOTEL COMPLETIONS

S.NO. ESTABLISHMENT NAME EXPECTED CLASS OPENING ROOMS

1 Southern Sun 4 star Q2 - 2014 156

2 Ramada Hotel 4 star Q2 - 2014 235

TOTAL 391

HOTEL ESTABLISHMENT PERFORMANCEHISTORICAL TRADING PERFORMANCE 2009-2014

ARR Occupancy

Source: TCA

0

200

400

600

800

1000

0%

20%

40%

60%

80%

100%

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

July

-11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

May

-14

SUPPLY

Ave

rage

roo

m r

ate

Occ

upan

cy

0

5000

10000

15000

20000

25000

30000

Pre-2009 2009 2010 2011 20132012 H12014

H22014

2015 2016+


ABU DHABI HOTEL ROOM SUPPLY (2009 - 2016+)


4,3911,427

2,012

7,148 7,148

11,539 12,966 14,97817,126 18,993 20,317 20,914

22,967

2,1481,867 1,324

5972,053

2,923


36

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | HOSPITALITY SECTOR – TRADING PERFORMANCE

Two new hotels and two new hotel apartments entered the market in Q2 2014 providing a total of 793 rooms. A further two hotel apartment developments (402 rooms) are scheduled for completion during 2014 taking the total supply in Abu Dhabi to 19,387 rooms by the end of the year.

There are almost 5,000 additional hotel rooms in the development pipeline, of which 2,053 are under construction and scheduled for completion in 2015. Over 90% of this new supply is targeting the 5 star sector of the market.

Al Reem Hotel Apartment Sun

Hotel- closed during Q2 (32 rooms)

Ramee Hotel Apartment – closed

during Q2 (71 rooms)

2014 – HOTEL APARTMENT SCHEDULED COMPLETIONS

GUEST ARRIVALS – TOP 5

GUEST ARRIVALS Q2 2014 YTD

S.NO. ESTABLISHMENT NAME EXPECTED CLASS OPENING ROOMS

1 Adagio Al Bustan Superior Q2 - 2014 282

2 Paragon Hotel Apt. Deluxe Q2 - 2014 120

3 Danat Residences Superior Q3 - 2014 189

4 Al Seef Resort - Jannah Deluxe Q3 - 2014 213

TOTAL 804

RANK NATIONALITY Q2 2014 YTD Q2 2013 YTD GROWTH RATE %

1 United Arab Emirates 473,670 365,214 30%

2 India 89,761 65,148 38%

3 United Kingdom 85,956 67,028 28%

4 Germany 59,821 55,773 7%

5 China 52,392 17,251 204%

United Arab Emirates 37.3%

Other GCC Countries 6.9%

Other Arab Countries 6.7%

Asia (Except Arab) 19.9%

Australia & Pacific 1.4%

Africa (Except Arab) 4.0%

Europe 18.3%

North & South America 5.5%

Source: TCA

37

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | HOSPITALITY SECTOR – TRADING PERFORMANCE

RESEARCH STUDY AREA

The geographical extent of the study area includes the Abu Dhabi Island, Investment Areas and the most populated Off-Island districts specifically Khalifa City A, Mohammed Bin Zayed City and Shakbout City.

RESIDENTIAL

New residential developments are classified as delivered and thus entered into the new supply category when they are made available for occupation. This is verified via a combination of site inspections and discussion with the developer and hence our supply numbers do take into consideration the phased release of large projects.

The ADIB Rental Index relates to the performance of the ADIB portfolio only and the data is derived exclusively from transactions completed by MPM Properties.

Other rental and sales trend analysis is based on transactional data derived from the MPM Properties Agency team and data sourced from developers and owners.

OFFICES

New office developments are classified as delivered and thus entered into the new supply category when they are available for tenant fit-outs.

Given the general lack of transparency in the local market rents quoted are headline rents, thus exclude any rent free period of other financial incentives that may have been negotiated between the parties. The rents quoted are also exclusive of service charges.

RETAIL

New retail developments are classified as delivered and thus entered into the new supply category when the first units are open and trading.

Our classification of malls is based on our own assessment having regard to size and the catchment area which the mall typically penetrates.

HOSPITALITY

New hotels are classified as delivered and thus entered into the new supply category when they are opened and trading. All trading performance data is provided by ADTCA.

FUTURE SUPPLY PROJECTIONS

Our future supply projections across all sectors are based on a combination of regular site inspections and discussions with developers.

DEFINITIONS & METHODOLOGY

BESPOKE CLIENT RESEARCH ADDING VALUE TO YOUR PROPERTY INTERESTS

The ADIB Real Estate Services team covers all sectors of the real estate market. We provide bespoke market research to our valued clients to meet their specific requirements.

We provide reports, information and presentations derived from primary market data that directly assist our clients to save or make money from real estate and shape strategies to enhance value.

38

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | DEFINITIONS & METHODOLOGY

PLEASE CONTACT US FOR FURTHER INFORMATION

PAUL MAISFIELD MRICS CEO – MPM [email protected]

JONATHAN BROWN MRICS Director of Valuation [email protected]

FRANK ODWYER Director of Property Management [email protected]

VAIBHAV SHARMA Head of Strategic Advisory & Research [email protected]

KHALED CHAHAL Head of Agency [email protected]

ABDULLA SAID AL KUWEITI Director of Business Development [email protected]

OFFICE CONTACT DETAILS MPM Properties Head Office 6th Floor, Al Wahda Tower P.O Box 114686 Abu Dhabi

Tel. 02 412 8914 Email. [email protected] www.mpmproperties.ae

DISCLAIMER:

The information contained in this report has been obtained

from and is based upon sources that ADIB Real Estate Services

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. ADIB Real Estate Services will not be held responsible

for any third-party contributions. All opinions and estimates

included in this report constitute ADIB Real Estate Services, 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 ADIB Real Estate Services’

control. For a full in-depth study of the market, please contact

ADIB Real Estate Services team.

39

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | CONTACT DETAILS

SUPPLY – PHOTO SCHEDULE

NEW SUPPLY - Q2 2014 ffvvc

40

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014 | SUPPLY – PHOTO SCHEDULE

RESIDENTIAL

OFFICE

RETAIL

HOTEL

1 THE ARC

1 MUROOR/15TH ST

2 CAPITAL MALL1 NATION GALLERIA

1 ADAGIO AL BUSTAN 2 SOUTHERN SUN HOTEL

3 RAMADA HOTEL

3 ABU DHABI PLAZA2 DEFENSE STREET

2 ABU DHABI PLAZA 4 B2 TOWER3 C59 - RAWDHAT

SAMPLE OF UPCOMING PROJECTS

41

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014 | SUPPLY – PHOTO SCHEDULE

RESIDENTIAL

RETAIL

HOTEL

3 YAS MALL

4 BLOOM CENTRAL MARRIOTT

5 FAIRMONT, M/ MALL

6 FOUR SEASONS, M/ISLAND

4 SHAMKHA MALL

5 THE DOMAIN WTC 6 THE VIEWS 1 & 2, SARAYA 7 MEENA PLAZA 8 HYDRA AVENUE

OFFICE

4 ADIC HQ RAHA BEACH 5 OMEGA TOWER 6 AL QUADRA KHALIFA PARK

7 AL JOHARA TOWER, SARAYA

Jubail Island

Al ReemIsland

Al MaryahIsland

Al Raha Beach

MasdarCity

Saadiyat Island

Yas Island

HydraVillage

Al Reef

B

D

E F

G H

K

I

J

A

C

Salam Street

Khaleej Al Arabi Street

Airport Rd

Airport Rd

E 20

E 20

E 22

E 30

Corn

iche

Rd

Electra St

Zayed The First S

t

E12

Al Saada Stre

et

25th S

t

Salam Street

Salam Street

Sheikh Khalifa Hway

Abu D

habi

- Dub

ai Rd

Abu Dhabi - Dubai Rd

E 10

Shei

kh M

akto

um B

in R

ashi

d Rd

E 11

E 11

E 11

E 10

33

2

7

5

3

5

4

5

6

6

7

814

2

1

2

3

1

4

6

4

2

1

Residential

Offices

Retail

Hotels

Residential

Offices

Retail

Hotels

Q2 2014 NEW SUPPLY UNDER CONSTRUCTION

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ2 2014

42

REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q2 2014

43

OFFICE CONTACT DETAILS MPM Properties Head Office 6th Floor, Al Wahda Tower P.O Box 114686 Abu Dhabi

Tel. 02 412 8914 Email. [email protected] www.mpmproperties.ae

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