GCC Real Estate Quarterlycontent.argaam.com.s3-external-3.amazonaws.com/564...remaining strong while that for villas declining during the quarter. Recent trend showed that ... segments

Global Research

Sector - Real Estate

December 2013

GCC Real Estate Quarterly – 3Q13

UAE and Saudi remain upbeat in 3Q13

Robust economic performance and improving sentiments drive markets

UAE real estate market to surge in preparation for World Expo 2020

Bahrain

Bahrain’s real estate market remained tepid during 3Q13 due to the impact of the holy month of Ramadan. The commercial segment continued to suffer from declining demand as a result of oversupply of stock. The residential market remained mixed with demand for apartments remaining strong while that for villas declining during the quarter. Recent trend showed that buyers are more interested in completed infrastructure projects.

Kuwait

Overall traded value of real estate properties grew 79.9%YoY to KWD970.4mn in 3Q13, mainly supported by increased government spending, favorable policies and rising market confidence. However, the market witnessed a 4.1%QoQ fall in value of transactions, which could be attributed to the effect of the summer holidays.

Oman

The real estate market continued its recovery in 3Q13, primarily driven by the residential and retail segments. The segments witnessed higher demand during the quarter, driven by improved economic performance and rising consumer confidence. The office market continued to display signs of stabilization, with prices remaining unchanged. Qatar

Qatar’s real estate market remained upbeat in 2Q13. The office rental market witnessed rise in rentals across most areas, with demand remaining strong for spaces less than 500sqm. The residential market also performed robustly, with rentals rising 5-10%YoY while occupancy rates remained around 100%. Similarly, residential sales witnessed strong activity, reflected in a rise in number of applications of mortgage valuations.

Saudi Arabia

Saudi Arabia’s real estate market continued to improve in 3Q13. Housing and hospitality segments across Jeddah and Riyadh remained buoyant, driven by strong government expenditure. However, Riyadh’s office market continued to suffer from an oversupply of stock leading to decline in rents. Going forward, we expect the housing and hospitality segments to maintain their uptrend. However, rising supply of new stock remains a concern for the office market.

UAE

UAE’s real estate market remained buoyant in 3Q13, with strong growth in rentals and sales prices across the markets of Dubai and Abu Dhabi. Prices increased 18%YoY in Dubai’s residential sales market, while Abu Dhabi’s market saw prices rise 5%QoQ. In the hospitality segment, Dubai’s occupancy levels increased 2 percentage points to 79% in 3Q13, while those of Abu Dhabi rose 6 percentage points to 64%. Office rentals rose up to 3%QoQ in Dubai, while Abu Dhabi saw rates stabilizing during the quarter. Strong economic fundamentals and improving market sentiments continue to drive the real estate market in the country. In addition, Dubai winning the bid to host the World Expo 2020 is expected to provide a fresh impetus to the sector.

GC

C R

eal E

sta

te 3

Q13

Faisal Hasan, CFA

Head of Research [email protected] Tel: (965) 2295-1270 Hettish Karmani

Manager Research [email protected] Tel: (965) 2295-1281 Global Investment House www.globalinv.net

Global Research - GCC GCC Real Estate Quarterly

December - 2013 2

UAE Real Estate Sector

Latest Developments

In the latest Knight Frank Global Development Insight survey, the UAE has ranked the eight-most sought-after

market for real estate buyers.

Dubai Land Department launched a new online real estate portal, eMart, for the auction, sale, and rental of

properties as well as an exchange centre to facilitate private and public real estate information.

The UAE Central Bank has issued new rules governing bank lending to property buyers. The new rules would

limit home loans for expatriates to 75% of a property’s value for a first investment of less than AED5mn

(USD1.36mn). UAE nationals would be allowed to borrow up to 80%. For more expensive homes, loans for

expatriates would be restricted to 65% of the value and 70% for nationals.

Aldar Properties’ net profit almost doubled to AED407.5mn in 3Q13 compared with AED205.7mn a year ago.

The company also announced that it has arranged for AED4bn to refinance its existing debt.

Union Properties’ reported profits rose to AED171.9mn in 3Q13 vis-à-vis AED49.6mn million a year ago.

Emaar posted another quarter of robust results in 3Q13, with net profit rising 50%YoY to AED581mn, thereby

taking 9M13 net profit to AED1,812mn (up 13%YoY).

Market Performance

The UAE’s market continued to witness a stable-to-rising trend during 3Q13. Average rent for Grade A office space

in Abu Dhabi remained unchanged at AED1,540/m2, with vacancy rates hovering at around 38%. Demand continues

to be driven mostly by government-backed organizations. Dubai’s office market continued to improve, with rental

prices growing up to 3%QoQ; however, the growth was restricted by increased supply of new space. During the

quarter, rental prices in Dubai ranged from AED1,830/m2 to AED2,610/m

2, while vacancy rates declined marginally

to 30%. Demand for high-quality stock continues to remain strong. The addition of new stock continues to be a

concern for the segment.

The residential sales market maintained its uptrend in 3Q13, driven by robust economic fundamentals and

improving market sentiments. Rental and sales prices increased across most segments in Dubai and Abu Dhabi. In

3Q13, more than 3,400 residential units (mainly apartments) were added to the Dubai market. The REIDIN

Residential Sale Index indicated an improvement of 18%YoY in Dubai’s market, while the REIDIN Rental Indices

registered a 15%YoY rise in rents for villas and apartments. Almost 2,700 residential units were added to the Abu

Dhabi market in 3Q13. The average sales price for properties in Investment Areas rose 5%QoQ to AED12,100/m2.

However, the improvement remained restricted to prime properties in Investment Areas.

The hospitality segment posted another quarter of strong performance in 3Q13. RevPAR and occupancy levels rose

in the Abu Dhabi and Dubai markets. The Abu Dhabi market added 300 branded rooms during 2Q13, while Dubai

witnessed the openings of Sofitel, Anantara, and The Conrad Dubai. Occupancy level in Abu Dhabi rose to 64% in

YTD August from 58% during the same period in 2012. RevPAR grew 9%YoY; however, average daily rates (ADR)

fell 2%YoY due to discounts offered. Occupancy rates in Dubai improved to 79% in YTD August from 77% during

the same period in 2012. ADR rose 5%YoY to AED235, while RevPAR grew 7.5%YoY to USD185.

Going forward, UAE’s real estate market is expected to surge on account of Dubai winning to the bid to host the

World Expo 2020.


December – 2013 3

Avg. Dubai Office Rent (AED/sqm) Avg. Abu Dhabi Grade A Office Rent (AED/sqm)

Source: Industry Sources & Global Research Source: Industry Sources & Global Research

Dubai Res. Selling Prices (AED/sqm) Abu Dhabi Res. Selling Prices (AED/sqm)

Source: ASTECO Source: ASTECO

Dubai Hotel Performance (YTD August) Abu Dhabi Hotel Performance (YTD August)

Source: Jones Lang LaSalle Source: Jones Lang LaSalle

64%

66%

68%

70%

72%

74%

76%

78%

80%

50

100

150

200

250

2010 2011 2012 2013

ADR (USD) Occupancy (%)

0%

16%

32%

48%

64%

80%

200

300

400

500

600

700

800

2010 2011 2012 2013

ADR (AED) Occupancy (%)

1,036 1,036 1,040 1,118

1,334 1,361

400

600

800

1,000

1,200

1,400

1,600

2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

AE

D/S

qm

1,600

1,540 1,540 1,540 1,540 1,540

1,510

1,520

1,530

1,540

1,550

1,560

1,570

1,580

1,590

1,600

1,610

2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

AE

D/S

qm

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

4Q12 1Q13 2Q13 3Q13

AE

D 0

00/a

n

Apartment Villa

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

4Q12 1Q13 2Q13 3Q13

AE

D 0

00/a

n

Apartment


December – 2013 4

Segments Outlook

Office - Rental

During 3Q13, stock totaling 45,000 sqm was added to Dubai, but none was added to Abu Dhabi.

Vacancy rates in 3Q13 fell to 30% in Dubai and remained stable at around 38% in Abu Dhabi.

Monthly rental rates ranged between AED1,830 and AED2,610 per sqm in Dubai and AED1,200 and AED1,540 per sqm in Abu Dhabi.

Rental rates for quality office spaces is expected to rise, while that for lower grade office stock would continue to face pressure; vacancy rates are expected to remain stable in the coming quarter.

Residential - Rental

Monthly rental rates for villas and apartments in Dubai surged 15%YoY.

Monthly rental rates for 2bedroom apartments in Abu Dhabi rose 8%YoY.

Demand for prime quality properties would continue to rise, thus pushing rental rates higher; however, the rest of the market would continue to face pressure, with addition of new stock.

Residential - Sales

Average sale prices of properties rose 18%YoY and 5%QoQ in Dubai and Abu Dhabi, respectively.

Sale prices are expected to rise, but the increase would be restricted to prime and newly developed properties.

Retail - Rental

Monthly rental rates remained steady in the range of AED970-5,700 per sqm in Dubai and between AED500-4,500 per sqm in Abu Dhabi.

Activity is expected to rebound post the summer holidays and lead to higher rental rates.

Hospitality

Abu Dhabi added 300 new rooms.

The occupancy rate was 79% in Dubai and 64% in Abu Dhabi.

ADR increased 5%YoY in Dubai, but declined 2%YoY in Abu Dhabi.

RevPAR grew 7.5%YoY in Dubai and 9%YoY in Abu Dhabi.

Increase in number of visitors is expected to lead to higher occupancy and ADR levels in Dubai; Abu Dhabi is expected to witness continued downward pressure due to increasing supply in 2013.


December – 2013 5

Qatar Real Estate Sector

Latest Developments

Capstone Property Services Qatar has been appointed to facilitate the renting, leasing, and management of

residential units at VB22, Viva Bahriya, at The Pearl Qatar.

Hill International, a leading construction management company, received the contract to offer construction

management services for the new National Museum of Qatar. The four-year contract, awarded by Qatar

Petroleum, is worth about QR82.7mn, the statement said.

Ezdan Holding Group completed the first phase of Ezdan City in Wakair area, housing more than 1,300

housing units for corporate sector.

Barwa Real Estate made a net profit of QAR467.5mn in 9M13, down from QAR779.1mn in the corresponding

prior-year period.

Market Performance

The office rental market grew in 3Q13, with rentals rising across some major areas on a YoY basis. Demand for

office space less than 500sqm continues to remain strong, while supply of the same remains restricted.

Furthermore, demand for high quality properties remained on an uptrend during the quarter. On the other hand,

secondary/low quality space continues to face pressure, as vacancy rates remain high.

The residential rental market posted a strong quarter, with rents rising 5–10% on YoY basis and occupancy rates

remaining around 100%. Demand for one- and two-bedroom apartments was the highest, while that for villas within

compounds also remained strong. Quality properties continue to enjoy strong demand, especially in the Pearl Qatar.

With limited new addition in the Pearl Qatar area, rental rates are expected to rise in the next quarter.

In line with the residential rental market, the sales market performed robustly during 3Q13. Although transaction

volumes remained mostly unchanged from 2Q13, the number of applications for mortgage valuations went up.

Sales prices have also increased during the quarter, primarily in the areas of Pearl Qatar and Viva Bahriya.

Average 3BR Villa Rental Rates Average Office Rental Rates

Source: ASTECO & Global Research Source: ASTECO & Global Research

5,000

9,000

13,000

17,000

21,000

25,000

QA

R/m

on

th

2Q13 3Q13

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

West Bay A Ring

Road

C Ring

Road

D Ring

Road

Old Doha Airport

Road

QA

R/s

qm

/pa

2Q13 3Q13


December – 2013 6

Segments Outlook

Office - Rental

Monthly rental rates rose around 2%QoQ

Demand for smaller spaces and quality properties continues to remain high, while demand for low quality properties remains dull. Addition of new stock in the coming quarter could put pressure on rental growth.


Monthly rental rates for apartments: QAR3,500–16,500 for one- and two-bedroom

apartments; and Up to QAR19,000 for three-bedroom apartments

Undersupply remains the key demand driver, leading to higher rental rates. With limited addition of new stock in the near term, rental rates are likely to rise in the coming quarter.

Residential - Sales

Transaction value remained stable in 3Q13.

Average apartment sales prices remained within the range of QAR11,000–17,500 per sqm

Given the expected supply of new stock, 2013 is likely to remain muted; however, some pockets, especially Pearl Qatar, would witness an uptrend due to the limited supply of new stock.


December – 2013 7

Bahrain Real Estate Sector

Latest Developments

Bahrain launched a USD2bn social housing finance scheme for five years in an attempt to reduce waiting lists,

giving an option to eligible applicants to buy off-plan from approved private developers.

Work on the USD1bn (BHD 378mn) Bahrain Financial Harbor project, which was started a decade ago, is

expected to resume soon.

Thirty two sea-facing villas, part of the Seavillas project being built on Dilmunia, the man-made island off the

Bahrain coast, were sold out in three days.

The USD2.5bn project of Bahrain Bay recently indicated it plans to complete half of its project by 2014.

Market Performance

Bahrain’s real estate market remained stagnant in 3Q13 owing to weak activity during the summer holidays and the

holy month of Ramadan. In particular, activity in the commercial segment slowed down, as locations with poor

parking and access facilities continued to suffer from declining demand, further worsened by supply of new stock

over the past one year. The rental market remains highly price-sensitive, leading to low rental rates and high

vacancy rates. However, specific areas, such as the Seef district, have seen a spike in demand for smaller (sub 100

sqm) spaces (wholly or partly fitted out), leading to higher rental rates.

The residential market’s performance was mixed during 3Q13, with demand for villas trending downward and that

for apartments remaining strong. Demand for villas, mainly in the north-west region of Bahrain, weakened due to

restricted affordability and availability of consumers, as Bahraini companies continue shifting toward offering (more

economical) all-inclusive contracts to employees. In contrast, the apartments market has witnessed strong demand,

especially from the non-family segment, which helped absorb the recent new supply of stock. As a result, rental

rates have remained steady during the quarter. The latest trend also reveals that buyers are increasingly interested

in projects with completed infrastructure and services.

Office Market Rental Rates Residential Market Rental Rates

Source: CBRE, *Estimated Source: CBRE, *Estimated

7.7

7.8

7.9

8.0

8.1

8.2

8.3

8.4

8.5

8.6

2Q11 2Q12 2Q13 3Q13*

BH

D/s

qm

/pm

Office Rent Seef (fitted-out space)

550

570

590

610

630

650

2Q11 2Q12 2Q13 3Q13*

BH

D/U

nit/m

onth

2 Bedroom Apartment Juffair


December – 2013 8

Segments Outlook

Office

Prime office monthly rent in the Seef area remained unchanged at BHD8 per sqm in 3Q13.

With the current oversupply in the market, demand is expected to continue falling, while occupancy rates continue to rise; however, demand for small spaces is expected to continue growing.


Monthly rents for two-bedroom apartments at Juffair stood at BHD600 per unit in 3Q13.

The apartment market is expected to witness a marginal increase in rental rates due to growing demand from expatriates.

Industrial - Rental

Rentals rose, but the range remained unchanged at BHD2–3.5 per sqm.

Prices are expected to trend up due to current undersupply in the market.


December – 2013 9

Kuwait Real Estate Sector

Latest Developments

Kuwait-based real estate firm Al Masaken International Real Estate Development Co has indicated its plan

execute new projects in the UAE and London.

Salhia Real Estate’s net profit increased 3.6%YoY to KWD1.8mn in 3Q13, but tumbled 12.6% on QoQ basis.

Mabanee’s net profit surged 49%YoY to KWD10.7mn in 3Q13, but plunged 19% on QoQ basis.

Market Performance

The overall value of transactions soared 79.9%YoY to KWD970.4mn in 3Q13, while transaction volume rose

36.2%YoY. The overall rise is ascribed to improving fundamentals of the real estate sector. The local government

continues to support the sector in the form of higher expenditure as well as implementation of development plans

and favorable policies. In addition, improving consumer sentiment, rising population and income as well as higher

lending activity continue to propel the sector’s growth. However, on QoQ basis, the value of transactions fell 4.1%,

whereas transaction volume declined 3.0%. The drop can be ascribed to the seasonal impact of the holy month of

Ramadan.

The residential segment remained the biggest contributor (50.1%) to overall transactions by value in 3Q13, up from

47.7% in 2Q13. In 3Q13, the number of transactions in the residential segment surged 23.1%YoY, while the value

of transactions increased 53.0%YoY.

The investment segment remained the second largest contributor (36.2%) to overall transactions by value, up from

33.5% in 2Q13. During the quarter, the value of transactions in the segment grew 77.2%YoY, while the volume of

transactions rose 65.2%YoY.

The commercial segment contributed 13.7% to overall transactions by value. The value of transactions surged

331.1%YoY, while the volume of transactions increased 628.6%YoY.

Average residential land prices Breakdown of transactions by segement (3Q13)

Source: Industry Sources Source: Ministry of Justice

300

500

700

900

Capital Hawalli Farwaniyah Ahmadi Jahraa

KW

D/s

qm

1Q13 2Q13

Residential, 50.1%Investment,

36.2%

Commercial, 13.7%


December – 2013 10

Segments Outlook

Land Sales

Average land sales price increased 2.4%QoQ to KWD716/sqm in 2Q13.

Prices are expected to have increased in 3Q13; however rising prices could hurt demand in the coming quarters.

Residential – Rental

Occupancy rates were stable at 90–95% during 2Q13.

Average apartment rents remained stable on QoQ basis.

The market is expected to have remained stable during 3Q13, owing the seasonal impact of the summer holidays.

Commercial – Land Sales

Average t value per transaction more than double to KWD6.8mn.

The price is expected to have remained stable in 3Q13. Oversupply continues to be a concern for the segment.



Oman Real Estate Sector

Latest Developments

Oman’s Special Economic Zone Authority Duqm invited pre-qualification bids from local contractors for the

construction of 150 housing units in the wilayat of Duqm.

Muscat Municipality announced that the construction of 190 houses at Al Hisn Heights in Yeti village is on

progress and nearing completion.

Oman’s Housing Ministry has awarded projects worth OMR491,265 to construct new housing units in various

parts of the country.

Market Performance

Oman’s office market continues to display further signs of stabilization, with rates remaining unchanged in 3Q13.

Nevertheless, oversupply of mid- to low-quality properties continued during the quarter; this is expected to drag

down rental rates for such properties in the coming quarter. However, demand for high quality office space

remained high, mainly led by small and fully furnished spaces (within 100–250sqm) in prime areas. As a result, the

market continues to see projects targeted toward meeting the rising demand for quality office space. Consequently,

rates for prime quality spaces are expected to rise gradually.

The residential market witnessed improved demand in 3Q13 due to stronger economic performance and rising

consumer confidence in the country. This is clearly reflected in the rise in transaction volume and gains in rental

rates on YoY basis. Furthermore, cheaper mortgage options and access to Islamic finance for buying properties

have aided in generating new interest from consumers.

The retail market continued its recovery in 3Q13, mainly due to an overall improvement in the economy. As a result,

markets continue to witness fresh interest among retailers. Oman Shopping Mall came out with an expansion plan

in the previous quarter, while this quarter saw Dubai-based Al-Futtaim strike a deal with Omani authorities to build a

retail shopping mall in Muscat, supposedly the largest in the country.



Segments Outlook

Office - Rental

Monthly office rents are expected to have remained stable around OMR6–8 per sqm.

Rental rates for high quality properties is expected to rise due to increasing demand, while those for lower grade stock are expected to fall

Residential – Rental

Monthly rents for two-bedroom apartments are expected to have remained at OMR400–800 per sqm.

Monthly rents for four-bedroom villas are expected to have remained around OMR1,000–1,600 per sqm.

Rentals are expected to rise in 4Q13, with the end of the summer holidays in 3Q13.



Saudi Arabia Real Estate Sector

Latest Developments

Saudi Arabia’s Real Estate Development Fund announced that it has approved 10,015 loans worth around

SAR5bn to construct more than 12,000 new housing units.

Saudi Arabia’s Arriyadh Development Authority has announced plans of setting up world-class labor housing

units in Riyadh.

The government has announced plans to spend SAR3bn to acquire land in Riyadh to build the city’s metro

rail system.

The Riyadh Development Higher Commission approved the development plan of the Saudi capital city’s

downtown into a historic, administrative, economic and cultural area.

KSA’s finance ministry approved 1,311 construction projects worth a total of SAR87.1bn during 1H13.

King Abdullah Economic City awarded a contract worth SAR85mn to Red Sea Housing Services to set up its

plant within the industrial zone in Rabigh.

Market Performance

The office rental market continued its mixed performance starting 1Q13 through 3Q13; Jeddah’s market remained

upbeat, while Riyadh’s market remained dull. Average prime office rent in Jeddah was steady at SAR1,500/sqm/pa,

whereas it grew 3-4% on YoY basis during the quarter. Stability in rents has been aided by a continuous decline in

vacancy rates throughout 2013. Jeddah’s office market continues to witness strong interest from the government

and private sectors; this is likely to drag down vacancy rates further. Conversely, in Riyadh’s market, prime rents

declined 1–1.5%QoQ and 4–5%YoY to SAR1,820/sqm/pa. The current oversupply situation continues to lead to

higher vacancy rates in the local market. Overall, the major concern for both markets remains the upcoming supply

of new stock that could hurt prices and lead to higher vacancy rates.

The residential sales market in Saudi Arabia continued its uptrend in 3Q13. In Jeddah, villa prices increased around

2–3%QoQ to almost SAR4,690/sqm; the Western districts continued to enjoy highest prices of about

SAR6,600/sqm. Meanwhile, apartment prices gained around 1%QoQ to SAR4,190/sqm. On the other hand,

Riyadh’s market saw prices of villas and apartments growing during 2Q13. Average villa price rose around 2%QoQ

to SAR4,380/sqm, whereas average price for apartments grew almost 3–4%QoQ to SAR2,950/sqm. Meanwhile, the

market continued to see new supply coming from individual and small-scale projects, and we expect the trend to

continue.

Similar to the sales market, the residential rental market maintained its robust performance. The market in Riyadh

witnessed 5–6%QoQ growth in villa rents and 3–4%QoQ surge in apartment rents. Jeddah’s market saw villa rents

rising almost 2–3%QoQ, whereas apartment rents remained mostly stable.

In the hospitality segment, Jeddah maintained strong performance, while Riyadh displayed signs of stability. In

Jeddah, ADR jumped almost 8–9%YoY to USD239, with occupancy levels remaining stable at 81%. In Riyadh, ADR

remained stable at around USD256, while occupancy improved to 58% from 57% a year earlier.



Jeddah office supply (in '000 sqm) Riyadh office supply (in '000 sqm)

Source: Jones Lang LaSalle Source: Jones Lang LaSalle

Jeddah average villa selling prices (SAR/sqm) Riyadh average villa selling prices (SAR/sqm)

Source: Jones Lang LaSalle, *Estimated Source: Jones Lang LaSalle, *Estimated

Jeddah hotel performance (YTD September) Riyadh hotel performance (YTD September)

Source: Jones Lang LaSalle, *Estimated Source: Jones Lang LaSalle, *Estimated

623 661 764

842 882

103

78 40 11

-

100

200

300

400

500

600

700

800

900

1,000

2012 2013 2014 2015 2016

Completed Future supply

4,500 4,500 4,5004,600 4650 4690

3,000

3,500

4,000

4,500

5,000

2Q12 3Q12 4Q12 1Q13 2Q13* 3Q13*

1,897 1,959 2,526

3,066 3,361

568

539

296 265

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2012 2013 2014 2015 2016

Completed Future supply

3,900

4,1124,200 4,250 4300 4380

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2Q12 3Q12 4Q12 1Q13 2Q13* 3Q13*

72%

72%

65%

70%

81% 81%

60%

65%

70%

75%

80%

85%

100

150

200

250

2008 2009 2010 2011 2012 2013*

ADR (USD) - LHS Occupancy (%) - RHS

74%

62%

59%64%

57%58%

50%

55%

60%

65%

70%

75%

150

200

250

300

2008 2009 2010 2011 2012 2013*

ADR (USD) - LHS Occupancy (%) - RHS



Segments Outlook

Office - Rental

Monthly rental rates rose 3-4%YoY in Jeddah and fell 4-5%YoY in Riyadh

Continued government spending is expected to drive demand higher in Jeddah, leading to higher rents and lower vacancy rates; however, the new incoming supply of stock is expected to negatively impact the markets of Jeddah and Riyadh in the medium term


Monthly rental rates for villas rose 5-6%QoQ in Riyadh and 2-3% in Jeddah

Monthly rental rates for apartments increased 3-4%QoQ in Riyadh and remained stable in Jeddah

Rising demand for quality properties is expected lead to higher rental rates in the coming quarters.

Residential - Sales

Average sales prices grew in the range of 1–4%QoQ across areas in Jeddah and Riyadh

Rising expatriate population will continue to drive demand for quality properties, leading to higher prices for apartments and villas

Hospitality

Occupancy rate is estimated at 81% in Jeddah and 58% in Riyadh

ADR increased 8-9% in Jeddah, whereas it remained stable in Riyadh

Delay in projects is expected to prevent supply of new stock in the market, thus boosting the hospitality segment in Jeddah and Riyadh; Jeddah would continue to witness uptrend, whereas Riyadh is expected to bottom in the near term



Market Cap. Current

Price Absolute Performance (%)

52 Week

Performance

(LC)

USD mn LC mn LC 1M 3M 12M High Low

UAE

Rak Properties 376 1,380 0.690 (5.6) 19.3 74.4 0.8 0.4

Union Properties 917 3,367 1.000 (2.2) 72.6 148.1 1.0 0.4

Deyaar Holding 1,141 4,189 0.725 (3.4) 47.9 117.1 0.8 0.3

Aldar Properties 5,288 19,420 2.470 (11.5) (2.9) 91.2 3.0 1.3

Emaar Properties 10,713 39,348 6.460 3.6 9.6 70.3 6.5 3.6

Kuwait

Injazzat Real Estate 117 33 96.0 (6.7) (2.0) 22.8 116.0 77.0

Abyaar Real Estate 231 65 59.0 5.4 11.3 47.5 78.0 37.5

Al Mazaya Holding 248 70 108.0 (1.8) - 42.9 150.0 71.0

National Real Estate 460 130 152.0 (3.8) (8.3) 22.5 194.3 114.3

Comm. Real Estate 572 162 95.0 2.2 2.2 30.1 110.0 70.0

United Real Estate 529 150 126.0 6.7 14.3 6.7 138.0 100.0

Salhia Real Estate 689 195 380.0 2.6 11.4 9.9 405.0 300.0

Mabanee 2,837 802 1,140.0 (6.6) 1.8 (0.5) 1,240.0 1,054.5

Saudi Arabia

Saudi Real Estate 1,062 3,984 33.2 5.3 13.9 36.7 38.0 27.8

Taiba Holding 1,672 6,270 41.8 (2.8) 20.6 83.5 47.1 23.0

Makkah Construction 2,802 10,507 63.8 (5.2) (3.8) 62.0 77.0 39.8

Emaar Economic City 2,788 10,455 12.3 1.2 19.9 60.4 12.8 8.0

Dar Al Arkan 2,865 10,746 10.0 (2.5) 5.3 29.4 11.1 7.9

Qatar

United Development 2,158 7,857 23.3 6.3 9.3 36.0 24.6 16.6

Barwa Real Estate 3,185 11,596 29.8 12.5 23.1 7.3 30.9 22.8

Ezdan Real Estate 12,692 46,206 17.4 1.9 (0.1) (6.2) 18.4 14.3

Bahrain

Seef Properties 189 71 0.2 2.0 20.0 23.0 0.2 0.1

Oman

Sahara Hospitality 37 14 2.5 N/A N/A N/A 2.5 2.5

All current prices are in local currency based on December 02, 2013 close unless otherwise mentioned.

Source: Reuters & Global Research



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