DUBAI MARKET UPDATE Monday 14 December 2015, Capital Club Dubai

Matthew Green, Head of Research & Consultancy

OFFICE MARKET

3

DUBAI OFFICE MARKET (2007 VS. 2015)

Pre-leasing Consolidation

Flight to Quality New Development

2015 2007

Limited Vacancy

Strata

Ris

ing

Ren

tals

1-year Leases

Sin

gle

Ow

ned

L

on

g L

eases

Landlord’s

Market

4

OFFICE STOCK GROWTH (2007 – Q4 2015)

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8.5 MILLION m2

3.0

Q4 2015 2007

MILLION m2

EXISTING STOCK

5

PRIME CBD OFFICE RENTAL RATES

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0% YEAR-ON-YEAR

PRIME CBD LOCATIONS

RE

NT

S

-40%

-30%

-20%

-10%

0%

10%

20%

30%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015

An

nu

al

Ch

an

ge

(%

)

Pri

me

Ren

ts (

AE

D/s

qm

/an

nu

m)

6

SECONDARY OFFICE RENTAL RATES

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‘Edit Data’ – an

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-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

200

400

600

800

1,000

1,200

1,400

Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015

An

nu

al C

ha

nge

(%

)

Se

co

nd

ary

Ren

ts (

AE

D/s

qm

/an

nu

m)

0% YEAR-ON-YEAR

SECONDARY CBD LOCATIONS

RE

NT

S

7

FUTURE OFFICE SUPPLY (2016 – 2018)

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STEPS

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‘Edit Data’ – an

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1.1 MILLION m2

2016 - 2018

0 100,000 200,000 300,000 400,000 500,000 600,000

2016

2017

2018

RESIDENTIAL MARKET

9

RESIDENTIAL MARKET (2007 VS. 2015)

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‘Edit Data’ – an

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open Smaller Pipeline

Maturing Market

Affordable

Housing

Flight to

Affordability

2015 2007

Rising Values

Significant

Supply

Ris

ing

Valu

es

New Masterplans

Landlord’s

Market

Cu

rren

cie

s

10

RENTAL RATES

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‘Edit Data’ – an

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Secondary

vs. Prime

APARTMENTS

0% YEAR-ON-YEAR 1% QTR-ON-QTR

VILLAS

-4% YEAR-ON-YEAR

-1% QTR-ON-QTR

11

RESIDENTIAL SALES MARKET

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UNIT TRANSACTIONS

33% YEAR-ON-YEAR* 2015* UNIT SALES OF AED18.45B

2014* UNIT SALES OF AED32.54B

UNIT SALES

12

SALES RATES

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APARTMENTS

-16% YEAR-ON-YEAR

VILLAS

-14% YEAR-ON-YEAR

Mortgages

-3% QTR-ON-QTR

-5% QTR-ON-QTR

13

FUTURE RESIDENTIAL SUPPLY (2016 – 2018)

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48,000 UNITS 2016 - 2018

FUTURE SUPPLY

HOSPITALITY MARKET

15

HOSPITALITY / TOURISM MARKET (2007 VS. 2015)

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‘Edit Data’ – an

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open Theme Parks

Mergers

Expo Effect

3-Star / 4-Star

2015 2007

New Source

Markets

5-Star

Ris

ing

ADR’s

Retail Tourism

High Occupancy

Declin

ing

ADR’s

16

HOTEL ROOM SUPPLY

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1 Star 7% 2 Star

8%

3 Star 14%

4 Star 30%

5 Star 41%

35,000 keys

75,000 keys

17

HOTEL ROOM SUPPLY BY LOCATION

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‘Edit Data’ – an

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0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Nu

mb

er o

f R

oo

ms

& F

lats

18

DUBAI HOTEL OCCUPANCY (2014 VS. 2015 YTD)

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‘Edit Data’ – an

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open 0

10

20

30

40

50

60

70

80

90

100

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Occu

pan

cy %

2015 2014

2015 YTD – 77%

2014 YTD – 78%

19

DUBAI HOTEL ADR’S (2014 VS. 2015 YTD)

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‘Edit Data’ – an

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0

200

400

600

800

1,000

1,200

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

AD

R (

AE

D/r

oo

m/n

igh

t)

2015 2014

2015 YTD – AED784

2014 YTD – AED844

20

FUTURE HOSPITALITY SUPPLY

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‘Edit Data’ – an

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FUTURE SUPPLY

22,000 ROOMS

2015 - 2017

0

2,000

4,000

6,000

8,000

10,000

12,000

2016 2017 2018

Fu

ture

Su

pp

ly (

Ho

tel

Ro

om

s/F

lats

) Keys Flats Total

RETAIL MARKET

22

RETAIL MARKET(2007 VS. 2015)

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‘Edit Data’ – an

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Food &

Beverage

Expansion

New Brands

Community Malls

2015 2007

Cannibalisation

Destination

Malls

Ris

ing

Ren

ts

Luxury Brands

High Occupancy

23

RETAIL STOCK GROWTH

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‘Edit Data’ – an

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0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Reta

il S

up

ply

(sq

m/G

LA

)

Stock New Supply Low Supply

24

FUTURE RETAIL SUPPLY (2016 – 2018)

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FUTURE SUPPLY

556,000m2

2016 - 2018

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000

2016

2017

2018

25

“DEFLATIONARY PRESSURES”

OUTLOOK

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Affordable

Housing

Currencies

New Sources

Theme Parks

Exp

o 2

02

0 Interest Rates

Supply

“FRAGMENTED MARKETPLACE”

“MATURING MARKET”

T +971 4 437 7200

Matthew.green@cbre.com

For more information regarding this presentation please contact: Matthew Green Head of Research & Consultancy