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ABU DHABI REAL ESTATE MARKET OVERVIEW
Q3 2015
REAL ESTATE SERVICES
CONTENTSDemand Drivers 4
Macro Trends 6
Residential Sector 8
Project in Focus 16
Office Sector 18
Retail Sector 22
Hospitality Sector 24
Definitions & Methodology 28
Contact Information 29
Supply - Photo Gallery 30
Development Location Map 32
REPORT HIGHLIGHTS Residential
Property values in the residential market have remained stable in Q3, reflecting low transaction volumes in the secondary market.
The low transaction volumes are a product of three factors:-
1) Weaker investor sentiment due to the impact of lower oil revenues which has seen a period of price stagnation in Abu Dhabi and prices falling in Dubai.
2) A lack of availability of good stock, as owners remain unmotivated to sell in the current market, with many enjoying healthy rental yields.
3) The increase in off-plan investment opportunities offering attractive payment plan terms is diverting some liquidity into this segment of the market.
There is evidence that rents may be approaching their ceiling level at the top end of the market demonstrated by modest growth of only 1% in the last 3 months despite a low level of vacancy and new supply in the high-end/luxury sectors. Developments in this segment have experienced year on year growth of between 7 to 10% hence many tenants are still facing sizeable increases at lease renewal.
Office
The commercial office market remains subdued and has seen low leasing activity during the last quarter. Although demand has declined, particularly from the government sector, this has been balanced by a lack of new supply entering the market, which has resulted in marginal rental increases of between 1-3%.
There are a number of office developments which are close to entering the market, including the ADIB HQ Tower 2 situated on Airport Road, Maryha Tower on Maryha Island, developed by Al Hilal Bank and the Al Qudra HQ at Khalifa Park, which together will add approximately 60,000 sqm of net leasable space.
Retail Sector
The retail sector has witnessed no major supply entering the market in Q3 with the majority of new supply comprising ancillary “street retail” on Abu Dhabi Island and mainland. This in turn is allowing the retail malls to focus on increasing their foot-falls by attracting tourists and residents in an increasingly competitive environment.
Retail rents across Abu Dhabi malls have remained stable during Q3 2015, although some mall tenants are requesting rental reductions at lease renewal, driven falling revenues witnessed by small retail stores during Q3 2015.
Hospitality Sector
Growth in guest arrivals into Abu Dhabi (up by 22% in Q2 2015 vs. Q2 2014), driven mainly by growth in tourists from China (68%), US (30%), Philipines (29%) and KSA (27%).
The hospitality sector is gearing up for the opening of Lourve Abu Dhabi, which is expected to increase the number of tourist arrivals into Abu Dhabi.
One of the aims of this report is to aid with improving market transparency by basing our analysis wherever possible on primary transactional evidence derived from our own managed portfolio and from the analysis of our sales and home financing activities. We believe that this adds credibility to the analysis and we hope provides confidence in its reliability.
MPM PROPERTIES FACTS AND FIGURES FOREWORD ADIB Real Estate Services comprises a comprehensive real estate banking and advisory platform providing the full range of professional services from a single provider. Our services include:-
�� Real estate financing�� Strategic development advisory�� Investment advisory�� Asset management�� Project management
�� Valuation�� Agency�� Market research�� Property management�� Facilities management
RENTAL INDEX | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015
2
RENTAL INDEX | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015
3
DEMAND DRIVERS – Q3 2015
GOVERNMENT INITIATIVES �� In line with the directives of President His
Highness Sheikh Khalifa bin Zayed Al Nahyan and His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the UAE Armed Forces and Chairman of Abu Dhabi Executive Council, new housing loans worth AED2,404 billion for 1,202 beneficiaries have been approved in the Emirate of Abu Dhabi
�� According to the World Economic Forum’s Global Competitiveness Index, UAE has moved to 17th position from 37th position in 2007 as the most competitive nation in the world,
placing it firmly in the ranks of the world’s elite innovation-based economies
�� The UAE will introduce new labour reforms aimed at tightening oversight of employment agreements for the millions of temporary migrant workers who make up the bulk of the country’s workforce. The reforms are being implemented through three decrees that will take effect on January 1. Three new labour rules issued by the Ministry of Labour include ministry-approved contracts, conditions for terminating employees and labour permits to work for new employers
TOURISM INITIATIVES�� The Ministry of Interior has launched a 90 days visit visas
accessed, either via the ministry website www.moi.gov.ae or its smartphone app
�� 26 events spread across eight-months have been announced by The Abu Dhabi Tourism and Culture Authority around the capital, in the Liwa desert and in Al Ain. The Abu Dhabi Classics season will
run until May next year and includes performances by well-known names in western and eastern classical music under the theme Music and Poetry, exploring how the genres blend
�� Under the patronage of Sheikh Mansour bin Zayed, Deputy Prime Minister and Minister of Presidential Affairs, Abu Dhabi is to host Red Bull X-Fighters World Tour finale on October 30
KEY EVENTS�� Ramadan and Eid Festival
7th July – 28th July
�� Eid al-Adha Exhibition 10th September – 21st September
�� Abu Dhabi International Hunting and Equestrian Exhibition (ADIHEX) - 9th – 12th September
�� Abu Dhabi Summer Season 11th June – 5th September
�� Louvre Abu Dhabi Stories 21st June – 30th August at Manarat Al Saadiyat
OIL & GAS�� The Shah gas project, which is being developed
by Al Hosn company to tap sour gas in the Western region of Abu Dhabi has reached its full capacity. Al Hosn is a 60-40 joint venture between Abu Dhabi National Oil Company (Adnoc) and Occidental Petroleum (Oxy)
from the US with total investment estimated to be around $10 billion (Dh36.7 billion). The Shah gas project located about 210 kilometers south-west of Abu Dhabi is expected to contribute significantly to the energy needs of the UAE for over 30 years
REAL ESTATE AND CONSTRUCTION - CREATING JOBS�� Reem Mall, ($1 billion project) is on target to complete by mid-
2018 after Abu Dhabi’s Urban Planning Council (UPC) granted approval for its concept plan. The mall is being developed by Kuwait’s National Real Estate Company alongside the United Projects for Aviation Services Company (Upac). Upac, through its subsidiary Al Arfaj Real Estate, is investing up to $224 million in the project which will compose 2 million sq.ft. of space including 450 stores, and 85 food and beverage outlets
�� Bloom Properties, the Abu Dhabi-based developer, owned by the Abu Dhabi conglomerate National Holding, launched Soho Square,
comprising 10-storeys with 302 homes ranging from studios to three-bedroom apartments, town houses and penthouses as well as shops and offices next to New York University’s Saadiyat campus
�� Gulf Related is about to begin construction on Al Maryah Central, a 2.3 million square foot super-regional shopping center. Australian contractor Brookfield Multiplex was awarded a $425 million contract to build the Al Maryah Central mall in Abu Dhabi
FREEZONES SIGNING UP NEW TENANTS; FORMING KEY ALLIANCES
�� Abu Dhabi Ports has signed a standard Musataha agreement (SMA) with Al Gharbia Pipe Company to open a new pipe manufacturing facility at Khalifa Industrial Zone Abu Dhabi (Kizad). The agreement will see Al Gharbia Pipe Company invest a projected total of AED 1.1 billion, with their new facility requiring a plot size of 200,000 square metres. Al Gharbia Pipe Company, a joint venture between Senaat, one of the largest industrial holding companies in the UAE, and two of Japan’s leading steel firms, JFE Steel Corporation and Marubeni-Itochu Steel Inc. (MISI), expects the facility to be completed by March 2018. The plant will employ over 370 staff and is expected to produce 240,000 tons of steel pipe a year
�� Abu Dhabi Ports signed a standard Musataha agreement (SMA) with Al Mazroui International Cargo Company (MICCO) to establish a new Logistics Business Centre at Khalifa Industrial Zone Abu Dhabi (Kizad). MICCO’s new Centre will be built in three phases and will cater to MICCO’s temperature controlled storage facilities, bulk storage through open yards, distribution services, and a service centre for their trucking fleet. The first phase will see MICCO, a leading freight contracting company in the UAE and one of the oldest logistics service providers in Abu Dhabi, invest an initial AED 35 million. Their new facility, requiring a plot size of 30,000 square metres, is expected to be ready by Q4 2016 and fully operational by January 2017
4 5
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015 | DEMAND DRIVERS REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | DEMAND DRIVERS
ABU DHABI REAL GDP FORECAST 2014-2018
Source: DED
0%
1%
2%
3%
4%
5%
6%
2013 Avg. 2014-2018
5.2% 5.5%
MACRO TRENDS
REAL GDP GROWTH RATE 2014-2018
Source: DED
0% 3% 6% 9% 12% 15%
Wholesale and retail trade; repairof motor vehicles and motorcycles
Accommodation and foodservice activities
Manufacturing
Transportation and storageand communications
Financial and insurance activities
6.8%
10.0%
10.0%
11.1%
15.0%
Dubai realty index Abu Dhabi realty index
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
Jan
-14
Ju
l-0
7
Ju
l-0
8
Ju
l-0
9
Ju
l-10
Ju
l-11
Ju
l-12
Ju
l-13
Ju
l-14
Jan
-15
Sep
t-15
0
5,000
10,000
15,000
20,000
Abu Dhabi MurbanCrude Oil
Gold Abu Dhabi Stock Market Index
Dubai Stock Index
Jan
-11
Jan
-12
Jan
-13
Jan
-14
Jan
-15
Sep
t-15
0
50
100
150
200
250
300
350
New Business Licences Business Licence Renewals
10,000
5,000
15,000
20,000
Q
1 20
10
Q2 2
010
Q
3 2
010
Q
4 2
010
Q1
20
11
Q2 2
011
Q
3 2
011
Q
4 2
011
Q1
20
12
Q2 2
012
Q
3 2
012
Q
4 2
012
Q1
20
13
Q2 2
013
Q
3 2
013
Q
4 2
013
Q1
20
14
Q2 2
014
Q
3 2
014
Q
4 2
014
Q1
20
15Q
2 2
015
Shorooq Abdulla Al ZaabiHead, Development Indicators
& Future Studies Division
Abu Dhabi Department of Economic Development
CPI Rental Contribution to CPI
Jan
20
12
Ju
l 20
12
Jan
20
13
Ju
l 20
13
Jan
20
14
Ju
l 20
14
Jan
20
15
Ju
l 20
15A
ug
20
15
80
100
120
Source: DED
Source: DEDSource: DED
Source: SCAD and MPM Properties Research
Source: Bloomberg and MPM Properties Research
CPI vs RENTAL CONTRIBUTION TO CPI
REALTY STOCK INDEX ABU DHABI vs DUBAI
REAL GDP GROWTH RATE 2014-2018
ABU DHABI CITY - BUSINESS LICENCE NUMBERS
ABU DHABI REAL GDP FORECAST 2014-2018
STOCK MARKET vs OIL vs GOLD
50
60
70
80
Q2 2
015
Q1
20
15Q
4 2
014
Q3
20
14Q
2 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
100
150
200
Q1
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
Q3
20
14Q
4 2
014
Q1
20
15Q
2 2
015
CONSUMER CONFIDENCE INDEX
Source: DED Source: DED
BUSINESS CLIMATE INDEX
Q1
20
10
Q2
Q3
Q4
Q1
20
11Q
2Q
3Q
4Q
1 20
12 Q2
Q3
Q4
Q1
20
13 Q2
Q3
Q4
Q1
20
14 Q2
Q3
Q4
Q1
20
15 Q2
80
100
120
Decreases in both oil prices and the general index of Abu Dhabi’s stockmarket, affected the value of the Business Cycle index during the 4th quarter of 2014, signalling some uncertainty amongst those participants who were surveyed on the performance of the economy in 2015.
BUSINESS CYCLE INDEX
6 7
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015 | MACRO TRENDS REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | MACRO TRENDS
MARKET OVERVIEW Q3 2015
SUPPLY New supply
The most significant new supply that entered the rental market this quarter was the release of 900 apartments in Gate Towers, which had remained vacant since the project was handed over. Also on Reem Island, Sea View Tower which is situated on Shams Abu Dhabi was handed over in September, comprising 280 apartments which have all been leased to Etihad. A number of
small infill developments have completed in the last three months, including Plot C9 in Sector E-25 and Plot C149 in Sector E-19/2 on the main Abu Dhabi Island in addition to Plot C49 in Sector ME-9 in Mohammed Bin Zayed City, which together have added just over 100 apartments.
3,000
6,000
9,000
12,000
15,000
Investment AreaOn-Island Off-Island
02010 2011 2012 2013 2014 2015
Q1-Q32015 Q4 2016 2017
5,135
2,925
2,013
2,221
3,732
6752,863
3,212
5,945
2,411
3,970
4,691
2,371
1,613
4,604
1,015
1,953
2,215
396
140
379
3,755
391
3,077
5,371
632
1,845
3,769
Num
ber
of r
esid
enti
al u
nits
Pre2010*
2010 2011 2012 2013 2014 2015Q1-Q3
2015Q4
20172016
Total Supply
5.68%
187,473
3.54%
194,101
6.19%
206,121
5.37%
217,193
3.95%
225,781
2.30%
230,964
0.40%
231,879
3.11%
239,102
2.61%
245,348
0
50,000
100,000
150,000
200,000
250,0004.05%
177,400
*per UPC
Num
ber
of R
esid
enti
al U
nits
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | RESIDENTIAL SECTOR
THE ADIB RENTAL INDEX �� In the last 3 months MPM Properties have
renewed close to 2,700 tenancy contracts in Abu Dhabi on behalf of landlords, and granted over 252 new leases
�� ADIB Rental Index continues to show, that across its portfolio, the common rental change trend is 0 to +5% increase during the last 3 months. We expect the rents to continue growing as the market is witnessing limited residential supply entering in the prime areas of Abu Dhabi
�� 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%-7% of the portfolio) and relate predominantly to the bottom end of the rental market typically with rents below AED40,000 per annum. These exceptional increases have impacted the overall Q-on-Q average change for each zone
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 and locations both on the Abu Dhabi Island and the growing Off-Island areas.
�� The ADIB Rental Index has been compiled 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 located at the end of this report.
ZONE < 0% 0% to 4.99% 5% 5% to +9.99% 10% to +19.99% 10% to +19.99%
A 0% 71% 12% 9% 6% 2%
B 0% 71% 12% 9% 8% 1%
C 0% 44% 15% 25% 12% 4%
D 0% 54% 12% 18% 9% 7%
E 0% 75% 6% 3% 9% 6%
F 0% 54% 10% 15% 18% 3%
G 0% 57% 23% 11% 3% 6%
H 0% 63% 9% 13% 13% 3%
I 0% 54% 20% 26% 0% 0%
J 0% 60% 13% 20% 7% 0%
K 1% 58% 13% 22% 1% 5%
RESIDENTIAL SECTOR
Source: MPM Properties Research
Source: MPM Properties Research
ABU DHABI NEW HOUSING SUPPLY
ADIB INDEX
CUMULATIVE RESIDENTIAL SUPPLY
(see map at end of report)
8 9
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015 | RESIDENTIAL SECTOR
APARTMENT SALE PRICES Property values in the residential market have in overall terms remained stable in Q3, reflecting low transaction volumes in the secondary market. The only exception has been Al Reef Downtown where values have risen by up to 5% for some unit types, highlighting that investor demand is weighed towards the affordable end of the market driven by
attractive rental yields. The low transaction volumes are, in part, due to a lack of availability of good quality stock, as owners remain unmotivated to sell in the current market, with many enjoying healthy rental yields.
RESIDENTIAL SECTOR
0
500
1000
1500
2000
2500
Al R
eef
Do
wn
tow
n
Al G
had
eer
Cit
y o
fL
igh
ts
Mari
na
Sq
uare
Sh
am
s
Al Z
ein
a
Al M
un
eera
Gate
Dis
tric
t
Al B
an
dar
SB
R
St.
Reg
is
AE
D/s
q.ft.
0.0% 0.0% 0.0% -1.7% -1.7% 0.0% 0.0% 0.0% -3.4% -0.5% 5.3%Q-on-Q
-8.7% 11.2% -7.3% -6.6% -5.0% -2.9% -1.8% -8.6% -8.0% -5.0% 2.6%Y-on-Y
2,2
50
1,8
50
1,75
0
1,4
50
1,4
25
1,4
25
1,375
1,3
25
1,15
0
1,0
05
1,0
00
Source: MPM Properties Research
AVERAGE APARTMENT SALES PRICE AED/sq.ft. Q3 2015
RESIDENTIAL DEMANDMPM has witnessed a decline in sales enquiries during the last quarter and a corresponding fall in sales transactions closing in the secondary market. This could be attributed in part to the summer holiday period, which traditionally sees a decline in market activity, although sustained price stagnation and falling prices in Dubai is also having an impact on investor sentiment (both buyers and sellers) reducing transaction volumes. Moreover the increase in off-plan investment opportunities offering attractive
payment plan terms is also diverting some liquidity into this segment of the market.
Analysis of MPM sales leads shows demand is heavily focused towards properties priced at less than AED 2 million, comprising almost 60% of all our enquiries (39% of which are looking for properties priced less than AED 1.5 million). The most popular developments comprise Al Reef, Raha Beach and Reem Island.
An indicator that demand has weakened is the compression in interest rates which has been witnessed, with some banks reducing rates by 75 basis points as they chase market share in a bid to meet year end targets. It is too early to analyse the impact on the market at this stage.
In terms of the off-plan market, demand is driven predominantly by the reputation of the developer and the payment plan in the first instance and then by price, product quality and location.
Following a sustained period of inactivity in terms of new project launches during 2009-2013, over the last 18 months Abu Dhabi has seen 16 new developments launched to the market, comprising over 6000 units.
The first new projects launched in 2014 by Aldar and TDIC demonstrated there was very strong pent-
up demand for new prime located product from government backed developers and consequently projects sold out quickly. Whilst more recent off-plan developments released by various developers have on the whole witnessed good demand the volume of sales closed indicates a decline in demand in comparison to last year.
The principal reason for this is the change in market sentiment over the last 12 months which has seen a decline in investor confidence impacted by prices stagnating in Abu Dhabi and declining in Dubai combined with the fall in the oil price.
There is virtually no demand for developments being sold off-plan by less well known independent developers who may have to realign strategy and sell on post completion in order to achieve optimum value.
<1m
1m - <1.5m
1.5m - <2m
2m - <3m
3m - <4m
4m - <5m
5m+
12%
27%
18%
11%
15%
6%
11%
10 11
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015 | RESIDENTIAL SECTOR
APARTMENT RENTS Following a sustained period of growth over the last 18 months it appears that rents may be approaching their ceiling level at the top end of the market demonstrated by modest growth of only 1% in the last 3 months despite a lack of vacancy
and new supply in the high-end/luxury sectors. It should be noted that developments in this segment have experienced year on year growth of between 7 to 10% hence many tenants are still facing sizeable increases at lease renewal.
RENTAL DEMAND MPM has witnessed significant demand from both individuals and corporate tenants for apartments in Mussafah where demand currently outstrips supply thus providing land owners in this location with development opportunities providing potentially healthy returns.
MPM receives on average over 6,000 leasing enquiries every quarter from prospective tenants in Abu Dhabi. An analysis of these enquiries shows that demand is heavily focused at the affordable end of the market with 56% of all enquiries from tenants with a budget of less than AED 100,000 per annum.
125
175
225
160
57.
5
105
45
97.
5
85
75
77.
5
65
105
55
195
70
270
135
175
26
0
115
160 2
05
115
155
20
0
105
15018
0
97.
5 132.5
190
95
132.5
180
85 10
5 130
115
170
23
5
70 10
0 130
1 BRStudio 2 BR 3 BR
0
50
100
150
200
250
300
No
n-I
nvest
men
tZ
on
e G
rad
e B
No
n Invest
men
tP
rim
e Z
on
e
Al R
eef
Do
wn
tow
n
Sh
am
s
Mari
na
Sq
uare
Gate
Dis
tric
t
Al M
un
eera
Al Z
ein
a
Al B
an
dar
Al G
had
eer
St.
Reg
is
SB
R
-0.7% 0.0% 0.4% 0.0% 1.1% -0.3% -1.2% -4.4% 2.7% -4.6% -1.4%Q-on-Q
6%
0.0%
7% 3% 0% 8% 6% 10% 3% 6% 15% 7% 4%Y-on-Y
Source: MPM Properties Research
AVERAGE APARTMENT ANNUAL RENT Q3 2015
<50k
50k - <100k
100 - <150k
150k - <200
200k - <250k
250k+
4%
52%
22%
15%
4%3%
NEW LAW REGULATING THE ABU DHABI REAL ESTATE MARKET In June 2015 a new law was announced by the General Secretariat of the Executive Council which comes into force in January 2016.
In our view, the new law is a positive step towards attracting increased real estate investment in Abu Dhabi as it tackles many of the concerns raised by investors in the past. Some of the key provisions in the new law are outlined below:-
Regulating Real Estate Developers
& ProfessionalsReal estate developers and brokers, owners association (OA) managers, appraisers and surveyors may not engage in any activity before obtaining a licence from the Department of Municipal Affairs (DMA) and are not entitled to claim remuneration and fees if they are not licensed. Failure to comply with this requirement may lead to imprisonment and a fine between Dh50,000 and Dh200,000, or up to Dh2 million in the case of real estate developers.
Mortgage Enforcement
The law provides for more effective enforcement in the event a debtor defaults on mortgage payments. A bank can now enforce the mortgage immediately through the court after giving notice to the debtor, without having to obtain a court judgment that the debtor owes the debt.
Off-Plan Mortgage Financing
The law allows units sold off-plan to be mortgaged provided that the loan amount is paid into the relevant escrow account and the loan is allocated for payment of the purchase price. These new provisions should encourage banks to become
more actively engaged in this segment of the market
Protecting Investors
The law prohibits real estate companies from selling off-plan units unless the developer and the project have been registered with the DMA and the company has opened an escrow account for the project and obtained written permission from DMA to advertise and market it.
The law also protects investors by requiring developers to register units sold off-plan in the interim real estate register. In addition, it sets out how a breach of this requirement by developers is to be dealt with.
The law sets out clear guidelines for the DMA to follow in dealing with developers when there are delays in meeting project milestones, to ensure that investors’ rights are protected and there is no delay in legal proceedings.
Registration Fees
The law prohibits developers from collecting registration fees (usually 2% of the property price) from investors and only allows developers to charge administrative fees, which must first be approved by the DMA.
Formation of Owners Associations
The law includes provisions for setting up OAs that will be independent legal entities that hold title to the common areas and are responsible for its management in accordance with international standards.
RESIDENTIAL SECTOR
12 13
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | RESIDENTIAL MARKET PERFORMANCE REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | RESIDENTIAL MARKET PERFORMANCE
VILLA PERFORMANCE: SALES AND RENTS �� Al Zeina townhouses, Golf Gardens and Al
Reef villas continue to see healthy demand from investors and end users alike, leading to a positive increase in prices Q-on-Q. Properties under AED5 million witnessed higher transaction volume vs. properties over AED5 million
�� Aldar’s launch of West Yas was well received by the market and highlighted demand for mid-priced properties in Investment
zones that cater to investors and end users. Investors continue to prefer villas within gated communities as they are yielding healthy rental return and high occupancy
�� Saadiyat Beach townhouses, Golf Gardens, Bloom Gardens and villas within gated communities on Abu Dhabi Island continue to be popular tenant choices for families and senior management staff of Government entities and banks
RESIDENTIAL SECTOR
0
100
200
300
400
80 12
0150
125 16
0 190
140
105 12
0
275
23
0
370
33
0
28
0 320
220
220
25
5
30
0 35
0
35
0
26
0 30
0
190
30
5220
24
0
3 BR2 BR 4 BR 5 BR
Al M
ush
rif
Gard
en
s
Al B
ate
en
Gard
en
s
Blo
om
Gard
en
s
Al R
ah
aG
ard
en
s
Go
lfG
ard
en
s
SB
V(T
ow
nh
om
es)
Hyd
raV
illag
e
Al Z
ein
a
Al R
eef
Al G
had
eer
AED
/sq.
ft.
0
500
1000
1500
2,000
Blo
om
Gard
en
s
Al G
had
eer
Al R
ah
aG
ard
en
s
Go
lfG
ard
en
s
Hyd
raV
illag
e
Al Z
ein
a
Al R
eef
SB
V1,75
0
1,4
25
815975
1,0
50
1,0
05
1,15
0
620
0.0% 1.9%5.4% 0.0%0.0%4.5% 0.0%-1.7%Q-on-Q
0.0% -3.55%8.33% 3.33%-4.55%0.0% -2.43%-3.06%Y-on-Y
Source: MPM Properties Research
AVERAGE VILA SALES PRICE AED/sq.ft. Q3 2015
VILA AVERAGE ANNUAL RENTS Q3 2015
Source: MPM Properties Research
Main island KCA MBZ
Low AverageHigh
0
5
10
15
20
25
16.17
5.4
6
6.7
510.8
10.3
7
23
.0
6.5
6 14.7
8
14.0
VILLA VALUES – NON-INVESTMENT AREAS�� The analysis below is based on data gathered
from the transactions financed by ADIB, villas managed by MPM and data from agency (sales and leasing) team, for villas in non-investment zones and highlights the current prevailing prices and yields
�� The demand for villas and villa compounds was slow during Q3 2015, as multiple projects like Al Merief, Nareel plots and West Yas attracted
market demand. The market is currently witnessing mismatch in yield expectations between seller and buyer, which in turn is leading to a slow-down in transaction volumes
�� Demand for good quality villa compounds in Khalifa City “A” and Mushrif areas continues to be healthy at 8% gross yield, despite some sellers currently attempting to sell villas at 7% gross yields
0
5
10
15
20
25
Main island KCA MBZ Shakbout City
Low AverageHigh
20
.47
6.3 13
.38 2
2.0
7.4
5 14.7
2 21.0
7.3 14
.1
12.5
9.0
10.7
5
Main island KCA MBZ
Low AverageHigh
9.13
4.2 6.6
6
23
.0
4.7
13.8
6.8
6.5
6.6
5
0
5
10
15
20
25
6.0%
7.0%
8.0%
Main island KCA MBZ Shakbout City
AED
(M
illio
n)A
ED (
Mill
ion)
AED
(M
illio
n)
VILLA COMPOUND PRICES (Q3 2015)
5/6 BEDROOM VILLA PRICES (Q3 2015)
VILLA COMPOUND GROSS YIELDS (Q3 2015)
7/8 BEDROOM VILLA PRICES (Q3 2015)
Source: MPM Properties Research
Note: Data relates to compounds of 4 to 6 villas
14 15
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015 | RESIDENTIAL SECTOR REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | RESIDENTIAL MARKET PERFORMANCE
PROJECT IN FOCUS – MAYAN RESIDENCE
Yas Island benefits from a number of major development anchors both existing and planned that will drive demand and value creating both an attractive lifestyle destination and investment proposition.
YAS ISLAND
Mayan enjoys a prominent position on the world-renowned Yas Island, known for its destination-led lifestyle experience and the Formula One circuit which hosts the Abu Dhabi Grand Prix on an annual basis.
Yas Island, whose population is expected to grow significantly as projects both under development and planned come on stream, is already home to major retail attractions in the form of Yas Mall, IKEA, Geant and ACE Hardware.
Two theme parks are already in operation on Yas Island – Yas Water World and Ferrari World, with two more theme parks marked out for development on the island’s master plan.
Yas Island is home to numerous food and beverage and entertainment venues ranging from the Yas Island Yacht Club, to the Beach Club as well as concert venues.
MAYAN - OVERVIEW
Located in the Yas Beach area of Yas Island and adjacent to the destination’s Hotel District, Mayan is a low-rise master planned community. With no restrictions on purchaser nationality due to its Investment Zone status, Mayan has been designed to appeal to a broad base of investors and end users.
Mayan offers a range of 700 apartment choices from studios to 1,2,3 and 4 bed options as well as beach houses.
Mayan benefits from stunning golf course and sea views, in addition to a variety of high-end amenities, from luxury infinity pools overlooking the sea, gyms, steam rooms, saunas, and access to Yas Island’s members-only beach club. Residents of Mayan will benefit from private parking, an exclusive concierge service, CCTV monitored security and 24-hour maintenance.
ENTERTAINMENT
Ferrari World
Yas Water World
Marina Circuit
Warner BrosLIFESTYLE
Golf
Marina
Beach
Outdoor Sports
SHOPPING
Yas Mall
Ikea
AceFAMILY
Schools (u/c)
Dining
Parks
16 17
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015 | KEY INDUSTRY PLAYER - MARKET VIEW REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | KEY INDUSTRY PLAYER - MARKET VIEW
SUPPLY Q3 2015
�� The only major addition to the market in the last quarter is the office space currently being handed over at Addax Tower, where we estimate approximately 20,000 sqm (representing approximately 25% of the tower) is now available in the market for either rent or for sale
�� A number of small developments, predominantly situated off-island, have been completed this quarter which together have added a further 5,000 sqm of ancillary Grade C office space
FUTURE SUPPLY
�� There are a number of office developments which are close to entering the market, including the ADIB HQ Tower 2 situated on Airport Road, Maryah Tower on Maryah Island, developed by Al Hilal Bank and the Al Qudra HQ at Khalifa Park, which together will add approximately 60,000 sqm of net leasable space
�� Post 2015, with the exception of handover delays of existing projects , there are limited new office developments in the pipeline. The developments that are underway are predominantly owner-occupier developments like ADNOC HQ, ADIB HQ Tower 1, etc. The demand for “business park” with ample parking continues to be strong from the SME sector and this is an opportunity that needs to be tapped by developers and investors
20102009 2011 2012 2013 2014 2015Q1-Q3
2015Q4
2016 2017
Running Total New Supply Completed Scheduled New Supply
155
541
377249 99 72
67373 41
0
1,000
2,000
3,000
4,000
1,800 1,800 1,9552,495
2,872 3,121 3,220 3,292 3,359 3,733
MARKET OVERVIEW Q3 2015
On-Island Off-Island Investment Area
0 300 600 900 1200 1500
436164892
0
100
200
300
400
500
600
2010 2011 2012 2013 2014 2015Q1-Q3
2015Q4
2016 2017
Speculative Owner Occupation / Pre-Let
146
9474
67
272
105
203
45
81
1860
12
25
42
153
220
41
On-Island Off-Island Investment Area
0
100
200
300
400
500
600
125 202
64
275
235
62
80
24181
8
956
18
8
12
3
5329
2010 2011 2012 2013 2014 2015Q1-Q3
2015 Q4
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015 | OFFICE SECTOR REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | OFFICE SECTOR
NLA
(in
00
0’s
Sq.
m.)
NLA
(in
00
0’s
Sq.
m.)
NLA
(in
00
0’s
Sq.
m.)
NLA (in 000’s Sq.m.)
ABU DHABI OFFICE SUPPLY (2009-2017)
Source: MPM Properties Research
ABU DHABI OFFICE SUPPLY COMPOSITION
ABU DHABI NEW OFFICE SUPPLY - LOCATION
NEW SUPPLY BREAKDOWN - LOCATION
Source: MPM Properties Research
Source: MPM Properties Research
Source: MPM Properties Research
18 19
Q2 2015
Grade BGrade A S&CGrade A Fitted
1.3%
3.2%
6.1%
11.8%
10.3%
13.0%
Q-on-Q changeQ3 2015 % Y-on-Y change%
0
500
1,000
1,500
2,000
Rent
/ S
q.m
. (A
ED)
Sales Price / Sq.ft.
*as per UPC
Prestige TowerMBZ
Tamouh TowerAddaxThe WaveSky Tower0
300
600
900
1,200
1,500
1,4751,250
1,150 1,150 1,100
0.0% -4.2%-2.1% 0.0%0.0%Q-on-Q
1.0% -2.2%-15.0% 5.3%–Y-on-Y
Sale
s Pr
ice
/ Sq
.ft.
(A
ED)
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | OFFICE SECTOR
OFFICE RENTS �� The commercial office market remains subdued
and has seen low leasing activity during the last quarter. Although demand has declined, particularly from the government sector this has been balanced by a lack of new supply entering the market, which has resulted in marginal rental increases of between 1-3%. The lack of Grade A space available for immediate occupation is seeing rents appreciate in prime buildings which enjoy low vacancy rates
�� The lack of availability and leasing activity in the Grade A segment is having a positive impact on some Grade B office buildings where we have seen leasing transactions closing at headline rents of AED 1,325 per sqm representing growth of 8% in comparison with the previous quarter. We don’t expect to see this growth sustained given the new supply due to be delivered to the market over the next six months
OFFICE SALES �� Floors and units within Addax Tower on Reem
Island continue to be handed over to investors and hence progressively more space is becoming available in the secondary market with prices generally ranging from AED 1,050 to AED 1,200 per sqft, with some owners offering extended
payments plans. The marketability of this space is being negatively impacted by the parking ratio although we understand that Tamouh is looking to address this with the construction of a multi-storey parking structure next to the tower
OFFICE HEADLINE RENTS, Q-ON-Q% AND Y-ON-Y% CHANGE
Source: MPM Properties Research
AVERAGE OFFICE SALES PRICE
Source: MPM Properties Research
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | OFFICE SECTOR
OFFICE PROJECT IN FOCUS: ADIB HQ TOWER 2�� 21,869 sqm of net leasable area arranged over
ground and 12 upper floors
�� Shell & Core finish ready for tenant fit out works
�� 4 levels of basement parking providing 400 car parking spaces (1:50 sqm)
�� Additional parking available (subject to negotiation)
�� Efficient floor plates extending to 1638 sqm
Grade “A” Specification
�� Common atrium with Tower 1 (ADIB HQ) with coffee shop and retail units
�� 2700mm finished floor to ceiling height
�� Capacity for 200mm raised access floors
�� 8 high speed lifts dedicated to exclusively serve Tower 2 from B4 through to Level 12
�� Average wait time estimated at 10-15 seconds
�� LEED Gold for Building Design and Construction
�� All common areas are covered by CCTV, access control system, fire alarm and intrusion detection system
Location
The development is situated on Airport Road opposite the Hilton Hotel providing excellent connectivity to Downtown and the airport
20
MARKET OVERVIEW Q3 2015
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2009* 2010 2011 2012 2013 2014 2015Q1-Q3
2015Q4
2016 2017/19
Scheduled New Supply Running Total New Supply Completed
28
1,4281,4001,400
259113
185
342 45152
1
872
1,687 1,800 1,985 2,327 2,372 2,3732,524
*as per UPC
NLA
(in
00
0’s
) pe
r Sq
.m.
TAKE-UP & RENTS
The rents quoted above are base rents excluding any turnover provisions and service charges.
�� Retail rents across Abu Dhabi malls have remained stable during Q3 2015, although some mall tenants have started requesting for rental reductions / renewals at previous rents, driven by drop in revenues witnessed by small number of retail stores during Q3 2015. On the other hand high street retailers across Abu Dhabi’s major locations have accepted 5% rental increase on renewals as rents on high street catch-up with rents inside established malls
�� Occupancy across malls remains high within Abu Dhabi Island, with malls on Abu Dhabi mainland witnessing healthy take-up for vacant space albeit at attractive rents or with attractive tenant incentives
�� The majority of existing contracts are being renewed at turnover rent. In turn this will ensure greater involvement from mall owners to drive foot-falls and revenue to stores within their malls
SPACE TYPE AVERAGE RENT (AED) PA
Specialty Store 1,800-3,900 per sq.m.
Anchor Store (more than 1,000 sq.m.) 400-1,250 per sq.m.
F & B 3,500-5,750 per sq.m.
ATM’s 90,000-180,000
Kiosks 85,000-155,000
High street retail (Prime areas) 2,500 – 3,850 per sq.m.
High street retail (Non-prime areas) 1,550-2,850 per sq.m.
District Neighborhood Regional Super Regional
On-Island Off-Island Investment Area
763,72354%
1,365,000 97%
333,000 24%
35,000 3%
303,27722%
517,89453%147,000
15%
1,281,617 54%408,453
17%
232,256 10%
450,277 19%
920,000 90%
236,241 24%
75,4538%
436,75345%
232,256 24%
300,10931%
RETAIL SUPPLY PRE-2010
PRE-2010
NEW SUPPLY DELIVERED 2010-2015 Q3
NEW SUPPLY ADDED POST 2010
The above charts show supply of malls only and exclude all street retail. Figures are NLA (sq.m.)
RETAIL SUPPLY LOCATION AS AT Q3 2015
1,601,241 67%
471,75320%
300,10913%
RETAIL DEVELOPMENT PIPELINE
RETAIL SUPPLY AS AT Q3 2015
96,400 9%
7,300 1%
621,20061%
102,50010%
RETAIL DEVELOPMENT PIPELINE
299,00029%
ABU DHABI RETAIL SUPPLY (2009 - 2017/18)
Source: MPM Properties Research
RETAIL SPACE CLASSIFICATION
RETAIL SPACE LOCATION
SUPPLY Retail Sector Set to Grow Rapidly Over the Next Three to Four Years
Q3 2015
�� The retail sector has witnessed no major supply entering the market in Q3 with majority of the supply being driven by “street retail” on Abu Dhabi Island and mainland. This in turn is allowing the retail malls to focus on increasing their foot-falls by attracting tourists and residents
�� Apple Store has recently opened at Yas Mall and this is a major addition to the retail brands within Abu Dhabi and is expected to yield higher foot falls to the mall
FUTURE SUPPLY
�� The retail sector within Abu Dhabi is expected to see multiple community retails and convenience stores being built all across the city. This in turn is expected to increase the competition amongst supermarkets, while enhancing the lifestyle of residents with more retail options available at their door-step
�� Al Mariyah Central is on course for a Q1 2018 opening has Gulf Capital has secured a AED2.3billion funding and 1/3 rd of the mall has been pre-let with key anchors currently announced being Macy’s and Bloomingdales. The funding covers phase one of the project, which will involve 2.3 million of a total of 3.1 million square feet being developed. This will include a mall with more than 400 stores, 145 restaurants and cafes and a 20-screen cinema
22 23
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015 | RETAIL SECTOR REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | RETAIL SECTOR
�� Growth in guest arrivals into Abu Dhabi (up by 22% in Q2 2015 vs. Q2 2014), driven mainly by growth in tourists from China (68%), US (30%), Philipines (29%) and KSA (27%)
�� Five star hotels continue to witness the highest spend / guest at AED2,601 and was second only to Deluxe hotel apartments
�� 4 and 3 star hotels have experienced occupancy levels above 80% so far this year with 5 star properties witnessing 75% occupancy YTD this year
ARR RevPar Occupancy
0
100
200
300
400
500
600
700
800 90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Jan
-13
Feb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oct
No
vD
ec
Jan
-14
Feb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oct
No
vD
ec
Jan
-15
Feb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Guests 20% increase
Guest Nights 15% increase
Occupancy 6% increase
Revenues (Mil.) 14% increase
Avg Length of Stay 4% decrease
MARKET OVERVIEW Q3 2015
�� Hotel apartments continue to outperform hotels with higher occupancy and average length of stay
�� Average guest spend at Deluxe apartments was the highest across hotel establishments, greater than five star hotels as well
�� Q3 witnessed an increase in all key parameters for hotel apartments, highlighting the strength of this segment within the hospitality sector
ARR RevPar Occupancy
100%90%80%70%60%50%40%30%20%10%0%
Jan
-13
Feb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oct
No
vD
ec
Jan
-14
Feb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oct
No
vD
ec
Jan
-15
Feb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
0
100
200
300
400
500
Guests 5% increase
Guest Nights 13% increase
Occupancy Levels 8% increase
Revenues (Mil.) 9% increase
Average Length of stay 7% increase
HOTELS 5 STAR 4 STAR 3 STAR 2 STAR 1 STAR
Guests 1,172,450 894,135 656,865 45,067 87,648
Guest Nights 3,573,210 2,497,105 1,912,751 124,381 211,341
Avg. Length of Stay 3.05 2.79 2.91 2.76 2.41
ARR 745 407 359 325 274
Occupancy 75% 82% 80% 78% 77%
RevPar 558.75 333.74 287.2 253.5 210.98
Revenues 3,049,900,000 940,380,000 639,100,000 48,020,000 70,700,000
HOTEL APARTMENTS DELUX SUPERIOR STANDARD
Guests 92,435 94,161 65,822
Guest Nights 760,762 607,209 295,815
Avg. Length of Stay 8.23 6.45 4.49
ARR 448 295 302
Occupancy 85% 86% 89%
RevPar 380.8 253.7 268.78
Revenues 244,821,691 126,815,770 64,005,852
HOTEL PERFORMANCE SNAPSHOT
Q3 PERFORMANCE BY RATING
HOTEL MAIN INDICATORS (YTD)
Source: TCA Abu Dhabi and MPM Properties Research
HOTEL APARTMENTS PERFORMANCE SNAPSHOT
Q3 HOTEL APARTMENT PERFORMANCE BY RATING
HOTEL APARTMENTS MAIN INDICATORS (YTD)
Source: TCA Abu Dhabi and MPM Properties Research
24 25
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015 | HOSPITALITY SECTOR – TRADING PERFORMANCE REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | HOSPITALITY SECTOR – TRADING PERFORMANCE
HOSPITALITY SECTOR – TRADING PERFORMANCE
ARR RevPAR Occupancy
100%
90%
80%
70%
60%
50%
40%
30%
20%0
100
200
300
400
500
600
700
800
Jan
-13
Feb
Mar
Ap
r
May
Ju
n
Ju
l
Au
g
Sep
Oct
No
v
Dec
Jan
-14
Feb
Mar
Ap
r
May
Ju
n
Ju
l
Au
g
Sep
Oct
No
v
Dec
Jan
-15
Feb
Mar
Ap
r
May
Ju
n
Ju
l
Au
g
Sep
SUPPLY
Ave
rage
roo
m r
ate
Num
ber
of r
oom
s
Occ
upan
cy
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Pre 2009
2009 2010 2011 20132012 2014 Q1-Q32015
Q42015
2016 2017+
Scheduled New Supply Running Total New Supply Completed
5,3742,397
2,6462,653
2,3122,805
1,483 5742,386
2,703
8,278 8,27813,652 16,049 18,695 21,348
23,66026,465 27,948 28,522
30,908
Q3 2015 saw Jannah Place on Airport Road entering the market with 62 keys. The property is deluxe hotel apartments offering short and long term stay options.
The hospitality sector is gearing up for the opening of Lourve Abu Dhabi, which is expected to increase the number of tourist arrivals into Abu Dhabi.
Q3 2015 – HOTEL APARTMENT SCHEDULED COMPLETIONS
GUEST ARRIVALS – TOP 5
GUEST ARRIVALS Q3 2015 YTD
S.NO. ESTABLISHMENT NAME EXPECTED CLASS OPENING ROOMS
1 Jannah Place Deluxe Q3 - 2015 62
TOTAL 62
RANK NATIONALITY 2015 YTD 2014 YTD GROWTH RATE %
1 United Arab Emirates 902,533 755,150 20%
2 India 173,649 142,613 22%
3 United Kingdom 142,134 122,893 16%
4 China 125,678 74,636 68%
5 USA 98,975 76,096 30%
United Arab Emirates 39%
Other GCC Countries 8%
Other Arab Countries 10%
Asia (Except Arab) 19%
Australia & Pacific 2%
Africa (Except Arab) 1%
Europe 16%
North & South America 5%
Source: TCA Abu Dhabi and MPM Properties Research
HOTEL ESTABLISHMENT PERFORMANCEHISTORICAL TRADING PERFORMANCE 2010-2015
Source: TCA Abu Dhabi and MPM Properties Research
ABU DHABI HOTEL ROOM SUPPLY (2009 - 2016+)
Source: MPM Properties Research
26 27
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015 | HOSPITALITY SECTOR – TRADING PERFORMANCE REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | HOSPITALITY SECTOR – TRADING PERFORMANCE
KHALED AL SOLEH BSC MRICS Head of Valuation – Abu Dhabi T: +971 (0)2 610 0085 M: +971 (0)50 722 9718 [email protected]
A collaborative team providing our integrated services
MOHAMED AL ZOUBI Head of Development Advisory BSc Civil Engineering T: +971 (0)2 610 0564 M: +971 (0)50 310 3570 [email protected]
KHALED CHAHAL Director of Agency – Abu Dhabi T: +971 (0)2 412 8402 M: +971 (0)50 110 2929 [email protected]
JASON FIELDEN BSC (HONS) MRICS Valuation Manager - Abu Dhabi T: +971 (0)2 510 0653 M: +971 (0)56 244 7696 [email protected]
PAUL MAISFIELD BSC (HONS) MRICS CEO T: +971 (0)2 610 0545 M: +971 (0)50 660 9437 [email protected]
YOUSEF AL ZAROONI Regional Head – Al Ain T: +971 (0)3 708 8636 M: +971 (0)50 600 1002 [email protected]
ABDULLAH SAID AL KUWEITI Business Development Director T: +971 (0)2 610 1554 M: +971 (0)50 623 5854 [email protected]
SAMUEL MORRIS BSC (HONS) FRICSDirector of Valuation & Regional Head - Dubai T: +971 (0)4 371 9466 M: +971 (0)50 107 1704 [email protected]
WAHIDA KARAMA Head of Property Operations T: +971 (02) 610 0435 M: +971 (0)50 765 7679 [email protected]
FRANK O’DWYER MBA (Hons); BEng.COO T: +971 (0)2 610 0402 M: +971 (0)50 812 1070 [email protected]
DOMINIC BARLOW Head of Retail, Hospitality & Leisure T: +971 (0)2 510 0655 M: +971 (0)56 288 1458 [email protected]
JUBRAN AL HASHMI Head of Property Services T: +971 (0)2 610 0232 M: +971 (0)50 122 0041 [email protected]
ALI ABDULLAH ABDUL RAHMAN Acting Regional Head – Northern Emirates T: 971 (0)6 597 2514 M: +971 (0)50 656 2486 [email protected]
VAIBHAV SHARMA MCOM; MDBA Director of Strategic Advisory and Research T: +971 (0)2 412 8914 M: +971 (0)50 660 9295 [email protected]
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 or 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
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 Abu
Dhabi 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.
BESPOKE CLIENT RESEARCH ADDING VALUE TO YOUR PROPERTY INTERESTSThe 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.
28 29
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015 | DEFINITIONS & METHODOLOGY REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015
SUPPLY - PHOTO GALLERY
SAMPLE OF NEW & UPCOMING SUPPLYNEW SUPPLY (Q3 2015)
INVESTMENT AREA - UPCOMING SUPPLY
2 HYDRA AVENUE REEM ISLAND
6 JANNAH PLACE ABU DHABI
3 ALI & SONS C40 RAWDHAT
7 C9, E-25, AL NAHYAN CAMP
4 BAWABAT AL SHARQ APARTMENTS
8 C86, E-11 TCA
9 C149, E-19/2 TCA
NON INVESTMENT AREA - UPCOMING SUPPLY
20 LEAF TOWER REEM ISLAND
24 BLOOM CENTRAL AIRPORT ROAD
36 HILTON AL FORSAN
27 C38 - GSCS TOWER DANET ABU DHABI
28 C40 - UNB TOWER DANET ABU DHABI
30 JOWARAH TOWER SARAYA
29 THE VIEWS 1 & 2 SARAYA
31 MINA TOWER SARAYA
32 SARAYA
25 EMI STATE REALTY HAMDAN STREET
26 FOUNDATION PROPERTIES AIRPORT ROAD
10 FOUR SEASONS AL MARYAH ISLAND
11 HORIZON TOWERS REEM ISLAND
14 SEASIDE TOWER REEM ISLAND
15 THE KITE RESIDENCES REEM ISLAND
16 THE SHAMS TOWER REEM ISLAND
17 YASMINA RESIDENCES REEM ISLAND
18 M TOWER REEM ISLAND
19 SKY GARDENS REEM ISLAND
21 ADTC PHASE 3
33 SARAYA
22 AL JAZEERA TOWER CORNICHE
34 C74, C75 & C76 RAWDHAT
23 AWQAF BUILDING KHALIDIYAH
35 C41 RAWDHAT
1 ADDAX TOWER REEM ISLAND
5 C49, ME-9, MBZ
12 SHEIKH OMAR REEM ISLAND
13 UNB TOWER 1 & 2 REEM ISLAND
30 31
REAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015 | SUPPLY - PHOTO GALLERYREAL ESTATE SERVICES | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015 | SUPPLY - PHOTO GALLERY
Residential
Offices
Retail
Hotels
Residential
Offices
Retail
Hotels
Q2 2014 NEW SUPPLY UNDER CONSTRUCTION
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
3
7
96
8
10
1 1811 2
1213
1415
1617
19
20
21
22
2324
26
25
27 28
35 34
2930
3132
33
36
4
5
New Supply
Investment
Non-investment
Q3 NEW & UPCOMING SUPPLY
ADIB RENTAL INDEX ZONE
COMMON TREND (Q3 2015) (ANNUAL %
RENTAL INCREASE)
Q-Q CHANGE OVERALL AVERAGE
Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014
Zone A 0 to 4.99% 3.05% 4.58% 3.71% 8.05% 5.01% 2.37% 4.05%
Zone B 0 to 4.99% 2.60% 5.08% 6.94% 7.75% 10.56% 3.86% 6.33%
Zone C 0 to 4.99% 5.63% 7.46% 9.25% 9.79% 12.34% 10.26% 5.06%
Zone D 0 to 4.99% 6.48% 7.06% 8.51% 10.31% 10.26% 9.07% 6.18%
Zone E 0 to 4.99% 3.76% 4.02% 7.54% 5.09% 10.20% 5.32% 4.49%
Zone F 0 to 4.99% 4.77% 3.17% 4.01% 6.58% 7.63% 3.25% 2.41%
Zone G 0 to 4.99% 4.42% 2.34% 2.20% 2.59% 2.69% 2.42% 2.92%
Zone H 0 to 4.99% 3.68% 5.58% 3.46% 1.46% 3.42% 5.31% 2.44%
Zone I 0 to 4.99% 3.08% 3.41% 1.86% 5.48% 1.14% 1.33% 1.21%
Zone J 0 to 4.99% 3.32% 5.78% 0.96% 4.04% 3.06% 1.55% 1.64%
Zone K 0 to 4.99% 5.30% 5.89% 2.88% 4.31% 4.18% 3.51% 3.65%
RENTAL INDEX | ABU DHABI REAL ESTATE MARKET OVERVIEWQ3 2015
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RENTAL INDEX | ABU DHABI REAL ESTATE MARKET OVERVIEW Q3 2015
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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
PAUL MAISFIELD BSC (HONS) MRICS CEO T: +971 (0)2 610 0545 M: +971 (0)50 660 9437 [email protected]
VAIBHAV SHARMA MCOM; MDBA Director of Strategic Advisory and Research T: +971 (0)2 412 8914 M: +971 (0)50 660 9295 [email protected]
