Q1 2018
Dubai Market Report
FOREWORD Cavendish Maxwell is a highly respected independent firm of chartered surveyors and property consultants, focusing on property services throughout the Middle East and Africa. Established in 2008, Cavendish Maxwell is now one of the most influential property consultancies in the region. As a fully qualified member firm of the Royal Institution of Chartered Surveyors (RICS), and with extensive knowledge of the region, Cavendish Maxwell has the necessary experience, expertise and insight to deliver property advice of the highest standard. Our reports are used for loan security, audit, insurance reinstatement, dispute resolution, risk management, debt recovery, performance analysis, project financing, development strategy and government initiative implementation. We provide a comprehensive range of property services across all our departments, each of which is headed by highly skilled, experienced and fully qualified RICS chartered surveyors. Our various teams provide valuation, agency, advisory, management, capital investment, research and building consultancy services across all property types and sectors. Our Q1 2018 report provides a summary of the Dubai residential market as well as a sector focus on the commercial property market. Price movement, rent and yield statistics, residential transactions and upcoming supply of residential properties are provided through Property Monitor, a real estate intelligence platform, powered by Cavendish Maxwell. The report also incorporates the Property Monitor Residential Survey, conducted among partner agents operating within Dubai. The survey showcases how new enquiries, leasing activity and transactions, among other metrics, changed over the previous quarter. It also provides an outlook on the following quarter and predictions by professionals, which are studied against real performance.
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Q1 2018
Dubai Market Report
CONTENTS 4
House Price Timeline
6
Price Performance
8
Rent Performance
10
2018 Upcoming Supply Map
12
Transferred Sales Overview
13
Property Monitor Residential Survey
14
Sector Focus - Industrial and Warehousing
18
Methodology
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Q1 2018
Dubai Market Report
HOUSE PRICE
In Q1 2018, villas/townhouses have traded at around AED 2.7 million and apartment transactions have averaged AED 1.2 million.
TIMELINE 4.0M
3.5M
Dubai House Price Timeline
Sales Price (AED) from the period January 2008 to March 2018
3.0M
Average Sales Price AED
2.5M
2.0M
1.5M
1.0
0.5M
UAE real estate Lehman Brothers boom collapse
Q3-2012
Q2-2012
Q1-2012
Q4-2011
Q3-2011
Q2-2011
Q1-2011
Q4-2010
Q3-2010
Q2-2010
Q1-2010
Q4-2009
Q3-2009
Q2-2009
Bond issuance Abu Dhabi’s $10 by the Dubai billion loan to Dubai Central Bank Q1-2009
Q4-2008
Rebound growth for the general market - oil prices above $100
debt restructuring
Oil price collapse at $32/barrel Q3-2008
Q2-2008
Q1-2008
Oil price peak at $145/barrel
Early sign of Nakheel and DWC announcing plans for trouble
Note: Dubai House Price Timeline tracks residential property transactions from Dubai Land Department (off-plan and secondary)
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Q1 2018
Dubai Market Report
Transacted prices for villas/townhouses have settled above the 2017 average during Q1 2018, which is mainly due to limited lower priced inventory entering the market this year compared to the launches in the first half of 2017. Meanwhile, trading prices for apartments continue to shift towards the lower end of the price band, averaging AED 1.2 million in Q1 2018. The middle-income population (AED 15,000 to 25,000 per month income bracket) has been the key target segment for the majority of ‘affordable housing’ apartment launches by developers in recent months. The majority of this new inventory offers smaller unit sizes to keep prices attractive, along with providing incentives, such as Dubai Land Department (DLD) fee waivers and payment plans with limited commitment (20-30%) during pre-construction period and extended post-handover payment options.
Average Sales Price Q1 2018
AED 2.7 Million
AED 1.2 Million
VILLAS/TOWNHOUSES
APARTMENTS
Russian currency crisis
OPEC limits crude output
Q 1-2018
Q4-2017
Q3-2017
Q2-2017
Q1-2017
Affordable housing arrived Q4-2016
Q3-2016
Q2-2016
Brexit
Q1-2016
Q4-2015
Q3-2015
Oil price deregulation Q2-2015
Oil Price collapse at $47/barrel Q1-2015
Q3-2014
Q2-2014
New market peak
Q1-2014
Q4-2013
Q3-2013
Q2-2013
Q1-2013
Q4-2012
Expo 2020 announcement
Q4-2014
Central Bank mortgage cap
Source: Property Monitor to derive monthly and quarterly average transacted prices for apartments and villas/townhouses.
© Property Monitor 2018 | propertymonitor.me
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Q1 2018
Dubai Market Report
PRICE
PERFORMANCE
According to the Property Monitor Index, apartment and villa/townhouse prices have registered 12 month declines of 2% on average.
Apartment Change in Price (%) -0.3
International City (Clusters) -0.1
Discovery Gardens Jumeirah Village Circle
-2.4
-0.3 -0.3
-1.3
-0.1
IMPZ
-1.4
-0.6
Dubai Silicon Oasis Al Furjan
-0.1
Dubai Sports City
-0.1
-2.4 -1.7
-0.8 -0.7
Jumeirah Village Triangle
-2.4
-0.3
Jumeirah Lakes Towers
-1.3
-0.1
The Greens
12 month % change Q1 2017 - Q1 2018
-0.9
-0.2
Uptown Motor City
-1.7
-0.3
Business Bay
-1.7
-0.2
Dubai Marina The Views
-0.3
Jumeirah Beach Residence
-0.3
DIFC
-0.2
Palm Jumeirah
-0.2
-1.0 -1.6 -2.5 -1.5 -1.5
-0.3
Downtown Burj Khalifa
QoQ% change Q4 2017 - Q1 2018
0
-2.3 -0.5%
-1.0%
-1.5%
-2.0%
-2.5%
-3.0%
-3.5%
-4.0%
Average Price per Sq ft (AED)
Jumeirah Lakes Towers
Palm Jumierah
1,204
2,175 sq ft
Jumeirah Beach Residence 1,639
Dubai Marina
The Greens
1,631
Business Bay
1,480
Downtown Burj Khalifa
2,394
1,328
Discovery Garden
DIFC
The Views
817
1,796
1,566
Al Furjan 904
Jumeirah Village Triangle
1,085
Uptown Motor City
848
IMPZ
International City (Clusters)
841
604
Dubai Sports City 957
Jumeirah Village Circle
819
Dubai Silicon Oasis 860
Source: Property Monitor 6
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Q1 2018
Dubai Market Report
Price movement in the last 12 months has varied not only between communities but also among different buildings within the same community, thus reflecting greater differentiation in how available properties are now trading. This differentiation is expected to continue as buyers have an increasing supply base to choose from and property fundamentals such as developer track record, proximity to social and public infrastructure, ease of access, maintenance, among other factors will drive price movement.
Villa/Townhouse Change in Price (%) -0.6
Al Furjan Villas
-2.2
-1.0
Cedre Villas Silicon Oasis
-0.4
Jumeirah Village Triangle
-1.2
-0.4
Green Community Motor City -0.1
The Springs
12 month % change Q1 2017 - Q1 2018
-1.3
-0.4
-0.7
Jumeirah Park
-1.6
-0.3
Arabian Ranches
-1.4
-0.7
Victory Heights
-1.7
-0.6
The Meadows
-1.5
-0.7
The Lakes
-0.2
Jumeirah Golf Estates
-1.3
-0.8 -0.8
Jumeirah Islands
-3.0
-0.8
Garden Homes Palm Jumeirah 0.0%
QoQ% change Q4 2017 - Q1 2018
-2.2
-0.5%
-1.0%
-1.5%
-1.9 -2.0%
-2.5%
-3.0%
-3.5%
-4.0%
Average Price per Sq ft (AED) Garden Homes Palm Jumeirah
2,653
Jumeirah Park
1,060
Jumeirah Islands
1,488
The Lakes 1,368
Al Furjan Villas
The Meadows
837
1,334
Jumeirah Village Triangle 939
Green Community Motor City
The Springs
978
1,035
Arabian Ranches 1,188
Cedre Villas Silicon Oasis 910
Jumeirah Golf Estates
1,203
* Average price per sq ft as of March 2018 Š Property Monitor 2018 | propertymonitor.me
Victory Heights
1,195
Source: Property Monitor 7
Q1 2018
Dubai Market Report
RENT
PERFORMANCE
Rent declines for residential properties in Dubai have been more pronounced than sales price declines in Q1 2018.
Declines were more pronounced in Business Bay, Discovery Gardens, International City (Clusters), Jumeirah Golf Estates, The Springs and Al Furjan Villas averaging 12 month declines of more than 5%. Rent declines are expected to continue during the second quarter of 2018, with new handovers planned in both freehold and leasehold communities across Dubai. The pressure on housing allowances has also impacted rental market performance and the pool of tenants at the higher end of the spectrum continues to shrink. It has been a tenant-led market and the increasing stock levels each quarter have provided ample opportunities for negotiation on base rents as well as payment terms such as number of cheques. Declines will be more pronounced in areas with increasing supply and those located away from central business districts and public infrastructure. Additionally, building maintenance and quality remain significant drivers of occupancy levels, thus impacting net realised yields on investment properties.
AED 59,575 AED 79,000
AED 66,420
AED 121,277
AED 73,941
AED 92,370 AED 126,737
AED 120,469 AED 133,465
The Greens -4.6
Jumeirah Beach Residence -3.1
Annual Rent by Bedroom Level Apartment
Villa/Townhouse
Studio Rent
3 BR Rent
1 BR Rent
4 BR Rent
2 BR Rent
5 BR Rent
12 month % change
12 month % change
Source: Property Monitor
AED 277,201
AED 72,024 AED 99,704
Jumeirah Lakes Towers -3.7
-4.3 Jumeirah Island
AED 274,804
-4.0 The Meadows
AED 271,544
AED 156,840
AED 356,800
Discovery Garden -5.2
AED 176,344
-5.8 The Springs
AED 60,402
AED 40,700
-4.9 Jumeirah
AED 81,893
Park
AED 103,597
AED 157,443 AED 197,600
Al Furjan Villas -6.4 8
AED 218,760
The Lakes -2.8
Dubai Marina -3.1
AED 55,000
AED 182,358
AED 403,416
AED 134,078
* Data as of March 2018
-3.3 The Views
AED 182,442
AED 249,600 AED 266,550
AED 184,608 AED 226,739 AED 240,488
AED 314,520
Jumeirah Golf -5.0 Estates
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Q1 2018
Dubai Market Report
-3.5 DIFC AED 74,000 AED 102,835 AED 176,333
-4.0 Downtown Burj Khalifa AED 84,271
Business Bay -5.0
AED 111,337 AED 151,919
International City -5.0
AED 74,005
AED 32,046
AED 85,000
AED 41,925
AED 130,500
AED 56,880
Rental Cheques For Apartments and Villas/ Townhouses AED 191,400 AED 293,186
AED 45,848
AED 187,318
AED 71,437
AED 253,540
AED 116,188
AED 292,800
Arabian Ranches -3.9
According to the Property Monitor’s database of rental contracts, the majority of the rental agreements for residential properties in Q1 2018 were in one cheque (50% of total), followed by 24% rent payments made through four cheques. The top areas where four cheques were prominent during Q1 2018 include Mirdif, Emirates Living, Arabian Ranches, Jumeirah Village Triangle and Jumeirah Park. The trend has reversed since Q1 2017 where the majority of rent contracts (43% of total) were four cheque payments. This is mainly because some tenants are negotiating larger discounts on base rents and agreeing to make one cheque payments instead of multiple payments.
-3.6 Dubai Sports City -3.2 Motor City -3.3 Victory Heights
AED 55,300 AED 77,256 AED 114,480
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Q1 2018
Dubai Market Report
2018 UPCOMING
SUPPLY MAP
Approximately 3,800 residential units have been handed over across Dubai in Q1 2018.
83%
APARTMENTS
17%
VILLAS/TOWNHOUSES
The majority of handovers during the first quarter of 2018 were in International City, Jumeirah Village Circle and Dubai Studio City, with more than 250 units being handed over in each location. More than 92% of the handed over units were apartments. For the remainder of the year, the majority of upcoming supply is concentrated in Business Bay, Jumeirah Village Circle and Town Square, all of which have more than 2,000 units scheduled for handover before the year end. Of the total scheduled handovers due for the remaining three quarters, approximately 46% of the upcoming supply is expected to be handed over during Q2. Increasing handovers will continue to impact rents in most locations across Dubai as tenants have more choice. This will also impact occupancies in existing stock and should be factored into net yield estimations for the forthcoming period.
Palm Jumeirah
Dubai Marina
PROPERTY MONITOR
Al Sufouh
Jumeirah Lakes Towers
SUPPLY TRACKER Supply scheduled to be completed by end of 2018
Al Furjan 0 - 200
200 - 400
400 - 600
1,000 - 1,500
1,500 - 2,000
2,000+
Al
The Hills
600 - 1,000
Jumeira Village Jumeirah Circle Village Du Triangle Spo IMPZ
Ci
Jumeirah Golf Estates
Source: Property Monitor
Dubai Investments Park Dubai South 10
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Q1 2018
Dubai Market Report
Deira
Mirdif
Jumeirah
Downtown Burj Khalifa
The Lagoons
Business Bay
Meydan City
International City
Nad Al Sheba
Mohammed bin Rashid City
Barsha
ah e e
ubai orts ity
Dubai Land
Dubai Science Park Motor City
Dubai Silicon Oasis
Arabian Ranches
Damac Mudon Hills
Town Reem Square Mira
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Akoya Oxygen
11
Q1 2018
Dubai Market Report
TRANSFERRED SALES
Transferred Sales Q1 2018
OVERVIEW
5,698
Off-plan transfers accounted for 61% of the total transfers in Q1 2018.
622
APARTMENTS
VILLAS/TOWNHOUSES
Business Bay, Mohammed Bin Rashid City and Jumeirah Village Circle dominated the off-plan transfers tally during the first quarter of the year. Meanwhile, traditional favourites including Dubai Marina and International City led the secondary market apartment transfers, along with Dubai Sports City, which accounted for 13% of the total apartment resale transfers during Q1 2018. Secondary market transfers among villas/townhouses surpassed the off-plan transfers in this category in Q1 2018, led by Emirates Living and Arabian Ranches, which together accounted for more than 42% of the total villa/townhouse secondary market transfers registered during the first quarter.
Top Five Locations for Apartment Transfers in Q1 2018 Off-plan Transfers
Secondary Market Transfers
700 616
600
573
257 212
200
300
0
216
Dubai Marina
Al Furjan
0 Jumeirah Village Circle
100
Mohammed Bin Rashid City
274
200
100
Business Bay
311
120
115
Palm Jumeirah
300
400
Jumeirah Lakes Towers
424
400
International City
No. of Transfers
500
The Lagoons
No. of Transfers
500
Dubai Sports City
600
700
Source: Property Monitor
Top Five Locations for Villa/Townhouse Transfers in Q1 2018 Off-plan Transfers 100
80
80
70
70
60 50 40 33
30
60
59
50
46
40 30
20
20
27
20 12
10
10
22
10
Jumeirah Village Circle
Reem (Mira)
Town Square
Arabian Ranches
Emirates Living
Villanova
Reem (Mira)
Serena
Town Square
0 Mohammed Bin Rashid City
0
12
Secondary Market Transfers
90
87
No. of Transfers
No. of Transfers
90
100
100
Source: Property Monitor Š Cavendish Maxwell 2018 | cavendishmaxwell.com
Q1 2018
Dubai Market Report
SURVEY
RESULTS
Looking Back – Q1 2018
Predictions
Reality
The majority of agents surveyed had predicted apartment and villa/ townhouse prices to decrease by up to 5% in Q1 2018.
vs
The majority of agents had predicted that apartment and villa/
townhouse rents would decrease by up to 5% in Q1 2018.
The majority of agents had predicted new buyer enquiries, seller instructions and agreed sales would increase in Q1 2018.
Apartment and villa/townhouse prices have remained largely stable in Q1 2018 with a 12 month decline of 2% on average. Apartment and villa/townhouse rents declined by 1% QoQ though 12 month decline is around 4% on average. According to data from real estate agencies, transaction levels for Q1 2018 are higher than Q4 2017.
Q2 2018 Transaction Outlook
Looking Forward – Q2 2018 Q2 2018 Price Outlook Apartments Percentage of agents who predict apartment prices will:
Villas/Townhouses Percentage of agents who predict villa/ townhouse prices will:
4.3% 1.6%
6.5%
0.5%
Percentage of agents who predict new buyer enquiries will: 22.2% 35.4%
26.6% 30.5%
23.9%
23.4%
42.4% Decrease
Increase
Remain the same
Percentage of agents who predict new seller instructions will:
Increase by more than 5%
Increase by up to 5%
Not change
Decrease by up to 5%
15.7%
28.8%
38.6%
44.0%
Decrease by more than 5%
Source: Property Monitor and Residential Survey
Q2 2018 Rent Outlook Apartments Percentage of agents who predict apartment rents will:
Villas/Townhouses Percentage of agents who predict villa/ townhouse rents will:
4.3% 0%
3.8% 0.5% 26.1% 28.3%
21.7%
23.4%
55.6% Decrease
Increase
Remain the same
Percentage of agents who predict agreed sales will: 25.3% 35.9%
46.2% Increase by more than 5%
Increase by up to 5%
45.7% Not change
Source: Property Monitor and Residential Survey © Property Monitor 2018 | propertymonitor.me
Decrease by up to 5%
38.9%
Decrease by more than 5% Decrease
Increase
Remain the same
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Q1 2018
Dubai Market Report
SECTOR FOCUS
INDUSTRIAL AND WAREHOUSING 2017 witnessed a continuation of trends from the previous 18 months with a difficult and competitive market place. Enquiry levels picked up as the year progressed and rallied strongly in the final quarter, after a quiet summer period. The vast majority of enquiries were for the small to mid-sized sector of the market with requirements for 50,000 sq ft or less accounting for 79% of demand*. There were also a number of significant occupier requirements above this level, including the big box market of more than 100,000 sq ft*. Many of these requirements have remained unsatisfied due to the lack of good quality stock available in the market, which has led to more occupiers exploring the Build to Suit (BTS) route, therefore delaying take up. There has been an increase in vacancy levels with many occupiers feeling financial pressure due to the current economic climate. Some businesses within certain industries, such as oil, gas and commodities, are now looking to rationalise their real estate holdings in a bid to reduce overheads and are therefore looking to either sell facilities which are considered excess to requirement or downsize operations. This is a trend which is even more apparent in the Free Zones where businesses are also facing increases in their land rents at rent review or lease renewal. In addition to this there are a number of speculative developers bringing new supply to the market leading to an unprecedented level of disposal instructions. The key driving forces in the market throughout 2016-2017 were from the logistics and distribution sectors and the traders of fast moving consumer goods (FMCG) and we expect this trend to continue throughout the course of 2018. This demand is not being met by the specification of existing warehouses, whereby occupiers in such industries prefer more modern European specification distribution warehouses which are not as readily available in the region. However we are seeing a shift in developers being more conscious towards the needs of the end users reflected in the new products they are bringing to the market in locations such as in Jebel Ali Free Zone and National Industries Park. Among the influential factors of 2017 affecting take up levels was the disparity between landlord/seller pricing expectations and what the market is willing to pay; often with asking prices 25-30% above market levels. We did witness deals concluding where landlords and sellers were able to realign expectations with the market which is encouraging. However, in still too many cases, there was little room for negotiation, with some landlords and sellers unwilling to change their pricing aspirations which have likely resulted in their properties continuing to sit vacant. When paired with increasing holding costs in the form of land rent and maintenance, this could be a costly and risky strategy. Occupiers remained cautious of the market since the drop in the oil price in 2014, however there was an improvement at the end of 2017 as oil prices recovered above the US $60 mark. Although there has been wider geopolitical instability from events such as the Brexit referendum, the uncertainty attached to a Trump Administration and more locally the break down in relations between Qatar and the rest of the GCC, occupiers are starting to factor in and account for external market forces within their decision making strategies similarly to more developed markets. 5% International Media Production Zone
8% 100,000+ 5% 75,001 - 100,000
16% 0 - 5,000
8% 50,001 - 75,000
1% Dubai South
2% Jebel Ali Industrial
38% Jebel Ali Free Zone
6% Ras Al Khor
11% Other
30% General Trading
2% Commodities 2% Oil and Gas 6% Services
ENQUIRY SIZE REQUIREMENTS (SQ FT)
ENQUIRY LOCATION REQUIREMENTS
ENQUIRY SECTOR REQUIREMENTS
6% Cold Strore
20% 5,001 - 10,000
22% 25,001 - 50,000
9% L&D 9% Food Production
21% 10,001 - 25,000
28% Al Quoz
19% Dubai Industrial Park
9% Engineering
16% Manufacture
Source: Cavendish Maxwell Research
*This excludes buildings which are incomplete and specialist units such as fitted cold stores. *The figures reported are exclusive of master authority sub-leasing fees which vary between 15 - 30%
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Q1 2018
Dubai Market Report
MARKET CHALLENGES
AND OPPORTUNITIES 1 2 3 4 5 6
There is opportunity for developers/land owners to build European style warehouses especially in Non-Free Zone locations. Buyers/tenants are being more cautious and carrying out further due diligence on their available options prior to making real estate related decisions. This is prolonging the timeframe to conclude a transaction but is also characteristic of a more mature and stable market. There remains an imbalance between landlord/seller expectations and the market prices which is stalling the market. If landlords are willing to be flexible, it is likely they could attract and secure occupiers to their warehouses. The introduction of VAT which applies to the sale and lease transactions of commercial property, in addition to increasing regulations, will cause a period of readjustment in the market conditions. Some businesses within the oil, gas and commodities sectors struggle, often looking to rationalise real estate holdings in a bid to reduce operational costs. However, it is likely that the increase in oil price toward the US $70 a barrel mark will positively impact these sectors and encourage more activity and/or investment. Onerous ground lease terms and significant increases in ground rents, are pinching occupiers bottom lines at a time when there has been much contraction across a range of industries. Master industrial authorities should keep a watchful eye on such strategies to ensure they don’t lose tenants.
INDUSTRIAL
INVESTMENT 1 2 3 4 5 6 7 8 9
There has been an increase in requirements from investors looking for institutional grade assets with long term income. Prime yields now stand a little under 8.5% which is a high yield compared to European markets. New funds entering the market are both listed and non-listed, as well as increased activity from high net worth individuals. There is a misalignment in seller and buyers pricing aspirations. Yields sought by sellers are too low and not reflective of the market, either because of the poor quality of the underlying asset, lack of growth potential or security of income. Problems remain with land tenure; almost all warehouse and industrial land is leasehold. The biggest restraint restricting investment flow is short land leases and land lease rents. The rise in the underlying ground rents have resulted in investors seeking higher gross occupational rents, but with occupiers unable to pay these, it is often a case that transactions will not be financially viable. There are very few investment grade commercial options available to investors which might suggest why yields across asset sectors do not fluctuate significantly as one would expect. Occupiers with obsolete buildings, or those unwilling to sign long term occupational leases or with weaker balance sheets, can expect double digit yields. Given the weight of money chasing transactions, international or strong regional tenants who can sign long leases could potentially achieve yields of less than 8%. Going into 2018, prime yields are expected to remain stable with more opportunities for sale and leaseback deals as end users seek to free up liquidity which is otherwise tied up in real estate.
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15
Q1 2018
Dubai Market Report
INDUSTRIAL PROPERTY
SUPPLY (PER SQ FT) Jebel Ali Free Zone
Dubai Investments Park
Al Quoz
National Industries Park
Dubai Industrial Park
Source: Cavendish Maxwell Research
ASKING SALE PRICES Jebel Ali Free Zone 248.5
Average price AED / sq ft
Dubai Investments Park
Locations
359.5
Al Quoz
391.5
National Industries Park
231
Dubai Industrial Park
273 0
(AED per sq ft)
100
200
(AED per sq ft)
300
400
500
(AED per sq ft)
600
700
Source: Cavendish Maxwell Research
ASKING LEASE PRICES Jebel Ali Free Zone
Locations
Dubai Investments Park
Average price AED / sq ft
27.5
33
Al Quoz
35
National Industries Park 30
Dubai Industrial Park
27 0
(AED per sq ft)
16
10
(AED per sq ft)
20
30
(AED per sq ft)
40
50
60
70
Source: Cavendish Maxwell Research
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Q1 2018
Dubai Market Report
2018 MARKET
OUTLOOK Whilst we expect transaction levels to remain below 2015 take up, strong enquiry levels since the start of 2018 suggest there will be a modest increase from 2017. Nevertheless, it is anticipated that occupiers will continue to carry out greater due diligence and analysis, which will impact decision making times and there will be a continuing differentiation in pricing expectations between sellers and buyers. There will continue to be many properties sitting stagnant on the market however if landlords and sellers are willing to adjust to the current market levels, then they should secure occupiers and buyers. We anticipate an increase in the level of occupiers looking to relocate to other emirates in a bid to reduce occupational costs incurred where they are more responsive to the challenges facing many businesses. However, the additional benefits of working within Dubai such as a better legislative and legal framework, more developed infrastructure, working in closer conjunction with suppliers and consumers and easier access to a greater labour force will continue to outweigh any occupational cost savings which may be achievable in other emirates. Due to the low levels of good quality supply in the wellestablished areas such as Dubai Investments Park and Al Quoz, which have no development land remaining, it is likely that interest in the areas around Al Maktoum International Airport, such as Dubai South and Dubai Industrial Park will increase as occupiers are forced to look at alternative locations to find suitable properties. Prices in free zones are expected to decline as increased supply and high vacancy levels, coupled with rising land rents, continue to compress capital values. Nevertheless, with an increase in the oil price, Expo 2020, further capital investment in the expansion of Jebel Ali Port on the horizon and the overall maturing of the market, the general sentiment is more positive than it has been for the past couple of years.
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17
Q1 2018
Dubai Market Report
METHODOLOGY Sale prices and rents are derived from Property Monitor (www.propertymonitor. me), a real estate intelligence platform established by Cavendish Maxwell in 2014. Property Monitor provides real-time, market-wide transactional data and trends. Working with governments, agencies, banks, developers and corporate investors, it provides deeper insight into real estate advisory, investment, and lending activities. The average sales price per sq ft is based on the Property Monitor Index which incorporates signed contracts, registered transactions, valuations and listings verified by Cavendish Maxwell’s market leading valuation department. Property Monitor Residential Survey is a quarterly study of agent opinion designed to identify residential market sentiment. This research highlights how new enquiries, leasing activity and transactions, among other metrics, changed from quarter to quarter with agent predictions compared to actual real market performance. Supply projections for residential projects are based on the Property Monitor Supply Tracker which tracks supply in real time, regular tracking of construction projects, new launches and delays. This is achieved through site inspections as well as regular feedback from developers, contractors, Cavendish Maxwell’s building consultancy team and related government entities. Indices and average prices are produced using Property Monitor Index, which was introduced in January 2014. The data is drawn from various data sources. Some figures are recalibrated each month and the data is continuously updated from government entities, which may result in revisions to historical data.
KEY
SERVICES Market Research
Asset Management
Due Diligence for Land Acquisition
Property Data
Highest and Best Use Studies
Buyer Profiling
Feasibility Studies
Advisory Services
Joint Venture Structuring
Site Analysis
40
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Education Advisory and Valuation 18
© Cavendish Maxwell 2018 | cavendishmaxwell.com
Q1 2018
Dubai Market Report
PEOPLE Jay Grant MSc IRRV (Hons)
Nigel Armstrong FMAAT
E: jay.grant@cavendishmaxwell.com
E: nigel.armstrong@cavendishmaxwell.com
Founder and Chairman
Miles Phillips BSc (Hons) MRICS Senior Partner
E: miles.phillips@cavendishmaxwell.com
Manika Dhama BA (Hons), MBA
Chief Executive Officer
Sofia Underabi MRICS AAPI Partner Head of Residential Valuation
E: sofia.underabi@cavendishmaxwell.com
Andrew Love MA (Hons) MRICS
Senior Consultant Strategic Consulting and Research
Partner Head of Investment and Commercial Agency
E: manika.dhama@cavendishmaxwell.com
E: andrew.love@cavendishmaxwell.com
Paul McCambridge
James Cresswell BA (Hons) MSc MRICS
Head of Sales Property Monitor
Partner Head of Commercial Valuation
E: paul.mccambridge@propertymonitor.ae
E: james.cresswell@cavendishmaxwell.com
Š Property Monitor 2018 | propertymonitor.me
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