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JLL_Dubai Real Estate Market Overview - Q2 2013 - IIR Middle East

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<strong>Dubai</strong> <strong>Real</strong> <strong>Estate</strong> <strong>Market</strong> <strong>Overview</strong><br />

<strong>Q2</strong> <strong>2013</strong>


Macroeconomic overview<br />

Indicator 2011 2012 (e) <strong>2013</strong> (f)<br />

United Arab Emirates<br />

Population (millions) 7.89 8.11 8.21<br />

<strong>Real</strong> GDP Growth (Y-o-Y) 4.2% 4.2% 3.3%<br />

Consumer Price Index (% change) 0.9% 0.7% 1.8%<br />

<strong>Dubai</strong><br />

Population (millions) 2.0 2.1 2.2<br />

<strong>Real</strong> GDP Growth (Y-o-Y) 3.6% 4.4% 4.0%<br />

Inflation (% Change) 0.5% -1.7% n/a<br />

Sources: IHS Global Insights (June <strong>2013</strong>); <strong>Dubai</strong> Statistics Center <strong>2013</strong><br />

e: estimated f:forecasted<br />

2


<strong>Market</strong> highlights – <strong>Q2</strong> <strong>2013</strong><br />

The <strong>Dubai</strong> real estate market continues to improve with all sectors in a recovery phase. While for the office<br />

sector, the strong performance remains concentrated in the best quality projects in prime locations, the<br />

residential and retail markets are witnessing a more broad-based recovery. The hotel sector has maintained its<br />

strong growth while industrial continues to expand.<br />

• The <strong>Dubai</strong> economy continues to expand and the Gross Domestic<br />

Product recorded a 4.4% growth in 2012 as per the <strong>Dubai</strong> Statistics<br />

Centre. The expansion was mainly supported by the strong performance<br />

of sectors such as hospitality (17% growth in 2012), manufacturing<br />

(13%) as well as transport, storage and communication (7%).<br />

• The business outlook of <strong>Dubai</strong> continues to be strong with the<br />

Department of Economic Development’s Business Confidence Index<br />

(BCI), standing at 113 points during the first quarter of <strong>2013</strong>. Confidence<br />

is still rising and businesses continue to be upbeat as the survey showed<br />

91% of firms reporting either improvement or stability in business<br />

conditions.<br />

• The real estate investment market remains active with increased<br />

volumes of commercial and residential transactions as investment<br />

sentiment in <strong>Dubai</strong> continues to improve. We continue to notice interest<br />

in single-owned well let buildings from investors from the GCC, who are<br />

attracted by the “safe haven” status of <strong>Dubai</strong>, its legal system and the<br />

overall recovery in the market. There are also increasing investments<br />

from Chinese organizations in the <strong>Dubai</strong> real estate market.<br />

• The office market continues in its recovery path with rental growth<br />

recorded mainly in the prime locations and new high quality buildings.<br />

The “flight to quality” remains a main trend in the market, especially as<br />

the new areas like Business Bay and JLT have been improving.<br />

• The residential market is now experiencing a broad-based recovery,<br />

with prices and rental values picking up in the secondary and more<br />

affordable locations, while the primary areas are now witnessing slower<br />

paces of growth. Projects in newly developed areas are still lagging<br />

behind and will need more time before picking up.<br />

• The retail market continues to improve and remains dominated by the<br />

best performing super-regional malls (eg: <strong>Dubai</strong> Mall, Mall of the<br />

Emirates). As retail space is becoming more difficult to find in those<br />

large centres, the near future may see an increase in demand for retail<br />

space in secondary malls.<br />

• The hotel sector maintained its strong performance, supported by a<br />

growing number of tourist arrivals in <strong>Dubai</strong>. Year-to-date (YTD)<br />

occupancy rates have reached 85% while YTD Average Daily Rates<br />

(ADRs) are at USD 267. This hotel sector is expected to continue to<br />

perform well throughout <strong>2013</strong> and beyond.<br />

• The industrial market continues to perform well overall. Demand has<br />

started to shift to the newer areas in the south of <strong>Dubai</strong>, which are<br />

witnessing strong growth and are benefiting from well developed<br />

infrastructure, good connectivity, proximity to major infrastructure<br />

projects, in addition to better quality products.<br />

3


Talking points – <strong>Q2</strong> <strong>2013</strong><br />

• <strong>Dubai</strong> is now home to the world’s most<br />

sustainable building, The Change Initiative.<br />

The building has secured the highest LEED<br />

Platinum rating, achieving 107 points out of<br />

110. Jones Lang La Salle used the venue to<br />

launch its first MENA sustainability report in<br />

June.<br />

• A successful <strong>Dubai</strong> Expo bid could result in<br />

over 25 million visitors to <strong>Dubai</strong> between<br />

October 2020 and April 2021 and will give a<br />

strong boost to the economy, creating an<br />

estimated 277,000 additional jobs. The bid<br />

result will be announced in November. <strong>Dubai</strong><br />

is competing against Izmir (Turkey), Sao<br />

Paolo (Brazil), and Yekaterinburg (Russia).<br />

• RERA reaffirmed that no project in <strong>Dubai</strong> is<br />

to be launched without developers giving a<br />

20% construction guarantee as collateral<br />

and making 100% land payment. The move<br />

aims to limit the dependency of developers<br />

on investors off plan sales proceeds money.<br />

• As per the <strong>Dubai</strong> Land Department, real<br />

estate transactions in <strong>Dubai</strong> were up 63%<br />

Y-o-Y in Q1-<strong>2013</strong> and reached AED 44<br />

billion, highlighting a growing confidence<br />

from investors in the <strong>Dubai</strong> market.<br />

• The AED 1 billion Cayan Tower, better<br />

known as the “twisted tower”, was launched<br />

in June <strong>2013</strong>. The tower is 310 meters high,<br />

comprises 75 storeys and is the tallest<br />

twisted tower in the world.<br />

• Emaar Properties and Meraas Holding<br />

announced a joint venture to develop<br />

“<strong>Dubai</strong> Hills <strong>Estate</strong>”, the first phase of the<br />

Mohammad Bin Rashid City (MBR City).<br />

The master plan will span over 11 million<br />

sq m and will include residential units<br />

overlooking a golf course, a commercial<br />

centre, hotels and serviced apartments,<br />

educational institutions, healthcare facilities<br />

and various leisure amenities.<br />

• Damac announced its largest project todate,<br />

“Akoya by Damac”. The 28 million<br />

sq ft development will feature a golf course,<br />

luxurious residential units, a spa, boutique<br />

hotels, schools, retail units, leisure and<br />

entertainment offerings as well as a sports<br />

complex.<br />

• <strong>Dubai</strong> Sustainable City is expected to<br />

deliver its first batch of 100 villas and<br />

townhouses, ranging in size from 3,100 sq ft<br />

to 4,200 sq ft, by the end of 2014.<br />

• <strong>Dubai</strong> International Airport is the world’s<br />

second airport for international passengers.<br />

The Airport recorded 5,218,832 passengers<br />

in May, up 18.9% y-o-y and 16.8% year-to-<br />

May. <strong>Dubai</strong> International is expected to<br />

overtake London Heathrow as the world's<br />

busiest international airport by 2015.<br />

• According to a report by MasterCard, <strong>Dubai</strong><br />

will attract 9.89 million international visitors<br />

in <strong>2013</strong> to become the world’s seventh most<br />

popular destination. The report also predicts<br />

<strong>Dubai</strong> to be among the top three<br />

destinations by 2017, ahead of Singapore,<br />

New York and Paris.<br />

• <strong>Dubai</strong> Department of Tourism and<br />

Commerce <strong>Market</strong>ing (DTCM) unveiled its<br />

“Tourism Vision 2020” plan, which aims to<br />

increase the economic contribution of the<br />

tourism sector by drawing more than 20<br />

million visitors per year and AED 300 billion<br />

in annual revenues by 2020.<br />

• A number of existing shopping malls are<br />

currently undergoing expansion. Festival<br />

City opened eight new stores, while Ibn<br />

Battuta Mall is adding 28,000 sq m (17,000<br />

sq m is leasing space) and Dragon Mart will<br />

complete its expansion by 2014.<br />

4


<strong>Dubai</strong> prime rental clock<br />

<strong>Q2</strong> 2012 <strong>Q2</strong> <strong>2013</strong><br />

Rental Growth<br />

Slowing<br />

Rents<br />

Falling<br />

Rental Growth<br />

Slowing<br />

Rents<br />

Falling<br />

Rental Growth<br />

Accelerating<br />

Rents<br />

Bottoming Out<br />

Residential<br />

Hotel*<br />

Rental Growth<br />

Accelerating<br />

Rents<br />

Bottoming Out<br />

Hotel*<br />

Residential<br />

Retail<br />

Office<br />

Retail<br />

Office<br />

*Hotel clock reflects the movement of RevPAR.<br />

Note: The property clock illustrates where Jones Lang LaSalle estimates each prime market is within its individual rental cycle as at end of the relevant quarter.<br />

Source: Jones Lang LaSalle<br />

5


<strong>Dubai</strong> office market overview


Total Stock (million sq m)<br />

Office supply<br />

• At the end of <strong>Q2</strong> <strong>2013</strong>, the total office stock within areas monitored<br />

by <strong>JLL</strong> stood at approximately 7.2 million sq m.<br />

• Around 312,000 sq m of office space has been delivered in the first<br />

half of <strong>2013</strong>, more than twice the space delivered in H1-2012.<br />

• In <strong>Q2</strong> <strong>2013</strong>, some 161,000 sq m of office supply was added to the<br />

market. Major completions include Burj Daman in DIFC, Jumeirah<br />

Business Centre 4 in JLT, Aspin Tower on SZR, as well as Blue Bay<br />

and The Oberoi Centre in Business Bay.<br />

• Single ownership buildings continue to account for the majority of the<br />

existing office stock (approximately 56%) while the remaining<br />

projects fall under strata ownership (approximately 44%). Strata<br />

locations such as JLT, Business Bay or TECOM C remain less<br />

popular amongst occupiers.<br />

<strong>Dubai</strong> Office Stock (2010 – 2015)<br />

9<br />

8<br />

7<br />

6<br />

5<br />

4<br />

3<br />

2<br />

1<br />

0<br />

5.3<br />

Source: Jones Lang LaSalle, <strong>Q2</strong> <strong>2013</strong><br />

0.6<br />

0.7<br />

6.3 6.9 7.2 7.8<br />

0.1<br />

8.5<br />

2010 2011 2012 <strong>2013</strong> 2014 2015<br />

Completed Stock<br />

Future Supply<br />

• An additional 587,000 sq m could enter the market in the second half<br />

of <strong>2013</strong> according to developers. In reality, and as seen in the<br />

previous quarters, some of the proposed space might be delayed or<br />

put on hold. Developers, whose projects are almost completed,<br />

might choose to wait given the oversupply situation in the market<br />

while “on hold” projects at early stages of construction and in remote<br />

or heavily supplied areas might not be delivered.<br />

• The majority of upcoming office space in <strong>2013</strong>-2015 will be in<br />

Business Bay (56% of total upcoming supply). Other locations that<br />

will see new office supply are DIFC (10%), JLT (10%), <strong>Dubai</strong> World<br />

Central (7%) and <strong>Dubai</strong> Investment Park (5%).<br />

Breakdown of Expected Completions by Sub <strong>Market</strong><br />

(<strong>2013</strong>-2015)<br />

Source: Jones Lang LaSalle, <strong>Q2</strong> <strong>2013</strong><br />

7


Major office completions - 2012/<strong>2013</strong><br />

CBD<br />

DIFC<br />

Burj<br />

Daman<br />

SZR<br />

Aspin Tower<br />

Business Bay<br />

Grosvenor<br />

Business Tower,<br />

Iranian Business<br />

Tower<br />

JLT<br />

Amesco Tower<br />

Business Bay<br />

The Burlington,<br />

Bay Gate<br />

Silicon Oasis<br />

S.I.T Tower<br />

Completed<br />

Under Construction<br />

JLT<br />

JBC 4<br />

8


Office demand<br />

• With market confidence and optimism improving, demand for office<br />

space is picking up.<br />

• Activity remains focused on prime buildings in the top locations, while<br />

demand for dated and poor quality space continues to be weak. The<br />

market continues to see a “flight to quality” as occupiers are relocating<br />

from the old areas to the newer areas of <strong>Dubai</strong>.<br />

• Jones Lang LaSalle is aware of approximately 104,000 sq m of current<br />

demand for office space.<br />

• Energy and technology firms accounted for 32% of total active tenant<br />

demand in June <strong>2013</strong>, followed by financial services (22%), and<br />

telecoms (15%). Most demand continues to result from existing<br />

tenants with few new entrants to the market.<br />

Distribution of Current Tenant Demand<br />

• Demand continues to be driven by portfolio optimisation, especially<br />

among global occupiers. However, the emphasis is now shifting from<br />

reducing the floor space to a more efficient use of the space available.<br />

• Landlords have become firmer on rents in the most prime locations but<br />

remain flexible elsewhere, offering rent-free periods to attract tenants<br />

to fill unoccupied buildings.<br />

• Vacancy rates within the CBD remained unchanged at 31% in <strong>Q2</strong> as<br />

the take up was counterbalanced with the new supply entering the<br />

market.<br />

Examples of recent deals<br />

Industry<br />

Area Acquired<br />

(sq m)<br />

Location<br />

Comment<br />

<strong>Real</strong> <strong>Estate</strong> 2,500 Downtown Expansion<br />

Energy 1,400 Downtown Relocation/ Expansion<br />

IT 930 Downtown Relocation/ Expansion<br />

Energy 5,575 Business Bay Relocation / expansion<br />

Services 5,575 DIFC Relocation<br />

Consumer 2,000 JLT Expansion from TECOM<br />

Chemicals 1,700<br />

Source: Jones Lang LaSalle, <strong>Q2</strong> <strong>2013</strong><br />

The Galleries,<br />

Jebel Ali<br />

Expansion from JAFZA<br />

9


<strong>Q2</strong> 2009<br />

Q3 2009<br />

Q4 2009<br />

Q1 2010<br />

<strong>Q2</strong> 2010<br />

Q3 2010<br />

Q4 2010<br />

Q1 2011<br />

<strong>Q2</strong> 2011<br />

Q3 2011<br />

Q4 2011<br />

Q1 2012<br />

<strong>Q2</strong> 2012<br />

Q3 2012<br />

Q4 2012<br />

Q1 <strong>2013</strong><br />

<strong>Q2</strong> <strong>2013</strong><br />

Rental performance<br />

• As confidence in the market keeps strengthening, office leasing<br />

activity in <strong>Dubai</strong> has been increasing, even though it remains more<br />

noticeable in best quality buildings and the prime locations. Average<br />

headline quoting rents in quality office buildings in selected areas<br />

have seen a rise of 8% Q-o-Q.<br />

• The top open-market rent (prime rent*) improved to AED 2,600 per<br />

sq m in the DIFC while it increased to AED 1,722 per sq m elsewhere<br />

in the CBD. Outside the CBD, prime rent reached AED 1,685 per sq m<br />

in <strong>Q2</strong> <strong>2013</strong>.<br />

• The prime well-established locations such as TECOM A&B, SZR and<br />

Burj Downtown continued to see rental growth in <strong>Q2</strong> <strong>2013</strong>.<br />

• Activity in Business Bay continues to increase as the area offers more<br />

space availability and the surrounding infrastructure has been now<br />

completed. Activity in JLT has also been improving and the area is<br />

capitalizing on its free zone status to attract occupiers looking to be<br />

100<br />

80<br />

60<br />

40<br />

20<br />

0<br />

Index of Average Office Rents<br />

based in offshore zones, while Jebel Ali is becoming increasingly<br />

popular due to the amount of available office space in the area.<br />

• “Flight to quality” remains a trend, with occupiers still relocating out of<br />

the older areas to buildings in newer areas such as Business Bay,<br />

Downtown, JLT or Jebel Ali.<br />

• With large occupiers (mainly those in search of 5,000 sq m of space or<br />

more) being unable to find the right space for their requirements, more<br />

“built-to-suit” deals are being offered to tenants.<br />

• Overall, the office market continues to improve, even though the<br />

growth remains concentrated within the highest quality buildings and<br />

the prime and newer locations.<br />

<strong>Dubai</strong> Prime Office Rents (Q1 2012 – <strong>Q2</strong> <strong>2013</strong>)<br />

Note: The average office rents are based on a basket of quality office buildings across <strong>Dubai</strong><br />

Source: Jones Lang LaSalle, <strong>Q2</strong> <strong>2013</strong><br />

* See Definition & Methodology for definition of Prime rents.<br />

10


Office market summary<br />

Indicator Level Comment / Outlook<br />

Current Office Stock<br />

Future Supply<br />

(<strong>2013</strong> – 2015)<br />

7.2 million sq m<br />

1.4 million sq m<br />

Includes all grades. As per the Jones Lang LaSalle quarterly survey of<br />

20 sub-markets, starting from 2009.<br />

Assuming that all pipeline supply tracked by Jones Lang LaSalle will<br />

complete.<br />

CBD Single<br />

Ownership Vacancy<br />

31%<br />

CBD vacancy levels remained flat.The take up of office<br />

space continues to be counterbalanced by the new supply<br />

entering the market.<br />

Prime CBD Rental<br />

(excl. DIFC)<br />

Prime City-wide<br />

Rental (excl. CBD)<br />

AED 1,720 / sq m<br />

AED 1,685 / sq m<br />

With confidence and optimism returning to the market, prime<br />

rents have been improving. Demand remains driven by<br />

consolidation and upgrades rather than new entrants.<br />

Prime Capital Value<br />

AED 16,125 / sq m<br />

Prime Capital Value refers to the market price for the best<br />

office space (excluding DIFC). Prime Capital Values<br />

increased in <strong>Q2</strong> <strong>2013</strong>, reflecting the increase in prime rents.<br />

11


<strong>Dubai</strong> residential market overview


Number of Units (in 000's)<br />

Residential supply<br />

• The total residential stock in areas monitored by <strong>JLL</strong> stood at around<br />

360,000 units as of June <strong>2013</strong>, with around 3,400 residential units,<br />

mostly apartments, being handed over in <strong>Q2</strong> <strong>2013</strong>.<br />

• The main completion of the last quarter was the much awaited Cayan<br />

Tower (also known as the Infinity Tower or Twisted Tower) in <strong>Dubai</strong><br />

Marina, adding some 456 units to the residential market.<br />

• Other delivered projects include the Phase I of Anantara Residences<br />

on Palm Jumeirah, 29 Boulevard Towers 1 & 2 and the Standpoint<br />

Towers 1 &2 in Downtown, The Residences at Business Central by<br />

Damac in Business Bay, in addition to three buildings by Ishraqah in<br />

Jumeirah Village, Elite 4 in Sports City and the Acacia Villas on Al<br />

Soufouh.<br />

<strong>Dubai</strong> Residential Stock (2010 – 2015)<br />

450<br />

400<br />

350<br />

300<br />

250<br />

200<br />

150<br />

100<br />

50<br />

0<br />

327 342 354 360 379 396<br />

19<br />

17 2<br />

2010 2011 2012 <strong>2013</strong> 2014 2015<br />

• A further 18,600 residential units are expected to come to the market<br />

before the end of the year. In reality, it is likely that much of this<br />

supply will not be delivered by its scheduled date as some<br />

developers, especially the ones with projects in areas with a large<br />

upcoming supply, remain reluctant to launch some of their units.<br />

• By 2015, around 38,000 additional residential units are expected to<br />

be added to the market.<br />

• Most of the upcoming residential supply will be located outside of<br />

Central <strong>Dubai</strong> in areas to the South and <strong>East</strong> of the city. The largest<br />

proportion of future stock from <strong>2013</strong> to 2015 will be delivered in the<br />

submarkets of <strong>Dubai</strong>land (5,800 units); <strong>Dubai</strong> Sports City (4,000<br />

units); Business Bay (3,600 units); <strong>Dubai</strong> Marina (2,800 units); and<br />

Jumeirah Village (2,500 units).<br />

Breakdown of Expected Future Completions<br />

Completed Stock<br />

Future Supply<br />

Source: Jones Lang LaSalle, <strong>Q2</strong> <strong>2013</strong> Source: Jones Lang LaSalle, <strong>Q2</strong> <strong>2013</strong><br />

13


Major residential completions - 2012/<strong>2013</strong><br />

Palm Jumeirah<br />

Anantara Residences<br />

Downtown <strong>Dubai</strong><br />

29 Boulevard,<br />

Standpoint<br />

<strong>Dubai</strong> Marina<br />

23 Marina,<br />

Bay Central,<br />

Cayan Tower<br />

<strong>Dubai</strong> Marina<br />

Marsa Tower,<br />

Marina Wharf II<br />

Jumeirah Village<br />

Autumn Apartments,<br />

Summer Apartments<br />

Silicon Oasis<br />

Silicon Gate 1,<br />

City Oasis<br />

<strong>Dubai</strong>land<br />

Platinum 1 & 2<br />

Completed<br />

Under Construction<br />

14


January 2003 = 100<br />

Jan 2008<br />

Mar 2008<br />

May 2008<br />

Jul 2008<br />

Sep 2008<br />

Nov 2008<br />

Jan 2009<br />

Mar 2009<br />

May 2009<br />

Jul 2009<br />

Sep 2009<br />

Nov 2009<br />

Jan 2010<br />

Mar 2010<br />

May 2010<br />

Jul 2010<br />

Sep 2010<br />

Nov 2010<br />

Jan 2011<br />

Mar 2011<br />

May 2011<br />

Jul 2011<br />

Sep 2011<br />

Nov 2011<br />

Jan 2012<br />

Mar 2012<br />

May 2012<br />

Jul 2012<br />

Sep 2012<br />

Nov 2012<br />

Jan <strong>2013</strong><br />

Mar <strong>2013</strong><br />

May <strong>2013</strong><br />

January 2009 = 100<br />

Jan 2009<br />

Mar 2009<br />

May 2009<br />

Jul 2009<br />

Sep 2009<br />

Nov 2009<br />

Jan 2010<br />

Mar 2010<br />

May 2010<br />

Jul 2010<br />

Sep 2010<br />

Nov 2010<br />

Jan 2011<br />

Mar 2011<br />

May 2011<br />

Jul 2011<br />

Sep 2011<br />

Nov 2011<br />

Jan 2012<br />

Mar 2012<br />

May 2012<br />

Jul 2012<br />

Sep 2012<br />

Nov 2012<br />

Jan <strong>2013</strong><br />

Mar <strong>2013</strong><br />

May <strong>2013</strong><br />

Residential performance<br />

600<br />

500<br />

400<br />

300<br />

200<br />

100<br />

0<br />

• The residential market maintained its positive performance in <strong>Q2</strong><br />

<strong>2013</strong>, backed by strong economic fundamentals and a return of<br />

confidence in the <strong>Dubai</strong> market, although the growth in prices and<br />

rents might be easing due to high levels of future supply, tenants<br />

relocating to cheaper locations, limited debt availability and more<br />

mature market regulations.<br />

• The REIDIN Residential Sale Index improved by 16% Y-o-Y, but only<br />

3% Q-o-Q. The apartment sector outperformed the villa market with<br />

the apartment sale price index increasing 17% Y-o-Y and the villa<br />

sale price index rising 12% Y-o-Y. However, they both remain below<br />

their peak values in Q3 2008 with villas 17% less than its peak and<br />

the apartment index 19% less than in Q3 2008.<br />

<strong>Dubai</strong> Residential Property Sale Indices<br />

• The REIDIN Rent Index increased by 12% Y-o-Y and 3% Q-o-Q. The<br />

villa rent index went up by 13% Y-o-Y and achieved its peak value in<br />

May <strong>2013</strong>, while the apartment rental index improved 12% Y-o-Y but<br />

remains 24% lower than in January 2009 (when the index<br />

commenced). Following the recent rise in rental values, some tenants<br />

have started to consider the most affordable secondary locations, a<br />

move that resulted in a slower rental growth in some well established<br />

areas.<br />

• Overall, the residential market appears to be experiencing a broadbased<br />

recovery in <strong>2013</strong> as prices and rents start to pick up in the<br />

affordable and secondary locations, sometimes at a higher pace than<br />

in the higher end areas.<br />

120<br />

100<br />

80<br />

60<br />

40<br />

20<br />

0<br />

<strong>Dubai</strong> Residential Property Rent Indices<br />

Residential General Residential Apartment Residential Villa<br />

Residential General Residential Apartment Residential Villa<br />

Note: REIDIN.com RPPIs use monthly sample of offered/asked listing price data and land registry price data (transaction data). <strong>Dubai</strong> sales/ rent index series are calculated monthly<br />

and cover 7 city-wide, 8 main districts and 4 major communities/ projects.<br />

Source: REIDIN, <strong>Q2</strong> <strong>2013</strong><br />

15


Residential market summary<br />

Indicator Level Comment/Outlook<br />

Current Residential Stock 360,000<br />

Future Supply (<strong>2013</strong> – 2015) 38,000<br />

Apartment Rent<br />

Apartment Sale Price<br />

Villa Rent<br />

Villa Sale Price<br />

Around 3,370 units were added to <strong>Dubai</strong>’s residential stock inventory<br />

in <strong>Q2</strong> <strong>2013</strong>.<br />

Assuming that all supply tracked by Jones Lang LaSalle will<br />

complete. In reality, some of the proposed projects may be delayed<br />

beyond their scheduled date.<br />

Asking rents went up by 12% Y-o-Y The recovery is being more<br />

broad-based in <strong>2013</strong> with rental values are growing at a slower pace<br />

in general.<br />

Asking apartment sale prices went up by 17% Y-o-Y. Sale prices,<br />

especially in the well established areas, are growing at a slower pace.<br />

Villa rents have increased by 13% Y-o-Y. Asking rents for villas in the<br />

secondary more affordable locations have been increasing, even<br />

faster than in the well established areas.<br />

Asking prices for villas have increased by 12% Y-o-Y but overall the<br />

growth is at decelerating rate.<br />

Note: Direction arrows are based on the performance of the REIDIN monthly index.<br />

16


<strong>Dubai</strong> retail market overview


GLA in '000s sq m<br />

Retail mall supply<br />

• With no new major completions, the total stock of mall based retail<br />

space in <strong>Dubai</strong> remains unchanged at around 2.8 million sq m in <strong>Q2</strong><br />

<strong>2013</strong>, while the much awaited opening of Phase I of The Avenue by<br />

Meraas has now been postponed to Q3 <strong>2013</strong>.<br />

• In the second half of the year, we expect the delivery of 48,000 sq m of<br />

retail space, including the 35,000 sq m phase 2 of Al Ghurair Centre,<br />

and the 13,000 sq m Phase I of The Avenue.<br />

• Other proposed retail projects for 2014 and 2015 include The Beach<br />

by Meraas, Phase II of Dragon Mart, Discovery Gardens Retail Center,<br />

The Outlet Village in Al Barsha, Jumeirah Park Community Center all<br />

due for opening in 2014 while the <strong>Dubai</strong> Pearl Shopping Mall and the<br />

Agora Mall in Jumeirah are both scheduled for 2015.<br />

• The Nakheel Mall and the Pointe Mall, both located on The Palm<br />

Jumeirah, have been re-launched and construction is expected to start<br />

very soon.<br />

<strong>Dubai</strong> Retail Stock (2010 – 2015)<br />

3,200<br />

3,000<br />

2,800<br />

2,600<br />

2,400<br />

2,200<br />

2,648<br />

48<br />

144<br />

2,774 2,816 2,816 2,864<br />

179<br />

3,008<br />

2010 2011 2012 <strong>2013</strong> 2014 2015<br />

Completed<br />

Source: Jones Lang LaSalle, <strong>Q2</strong> <strong>2013</strong><br />

Future Supply<br />

• A number of large-scale shopping centres have also been announced<br />

but not yet under construction. These include the 200,000 sq m Phase<br />

II of the Avenue, the 400,000 sq m Phoenix Mall in International City,<br />

Bawadi Mall in <strong>Dubai</strong>land, and Phase II of <strong>Dubai</strong> Outlet Mall. Other<br />

projects that have commenced construction remain on hold (eg: Mall<br />

of Arabia).<br />

• A clear trend in the market remains the expansion plans of some of<br />

the existing super regional centres such as The <strong>Dubai</strong> Mall (93,000<br />

sq m of expansion announced), Al Ghurair Centre (35,000 sq m of<br />

expansion), <strong>Dubai</strong> Outlet Mall (65,000 sq m of additional space), Ibn<br />

Battuta Mall and Festival City.<br />

• Large Super Regional Centres continue to dominate the <strong>Dubai</strong> market<br />

and constitute 66% of mall based retail space. Despite the upcoming<br />

entry of a number of smaller community centres, this share is<br />

expected to be maintained in the coming years.<br />

Breakdown of GLA Retail Space by Type of Mall<br />

Source: Jones Lang LaSalle, <strong>Q2</strong> <strong>2013</strong><br />

18


Expected major retail projects<br />

Deira<br />

Al Ghurair Centre -<br />

Phase 2<br />

Al Wasl<br />

The Avenue<br />

Downtown <strong>Dubai</strong><br />

<strong>Dubai</strong> Mall - Phase 2<br />

International City<br />

Dragon Mart -<br />

Phase 2<br />

TECOM<br />

<strong>Dubai</strong> Pearl Mall<br />

Al Barsha<br />

Outlet Village<br />

JBR<br />

The Beach<br />

Under Construction<br />

19


AED sq m<br />

Q1 2009<br />

<strong>Q2</strong> 2009<br />

Q3 2009<br />

Q4 2009<br />

Q1 2010<br />

<strong>Q2</strong> 2010<br />

Q3 2010<br />

Q4 2010<br />

Q1 2011<br />

<strong>Q2</strong> 2011<br />

Q3 2011<br />

Q4 2011<br />

Q1 2012<br />

<strong>Q2</strong> 2012<br />

Q3 2012<br />

Q4 2012<br />

Q1 <strong>2013</strong><br />

<strong>Q2</strong> <strong>2013</strong><br />

Rental performance – Estimated Rental Value (ERV)<br />

• The retail market continues to perform well, supported by the solid<br />

economic fundamentals of <strong>Dubai</strong>, the strong inflow of tourists and the<br />

increase in the number of residents.<br />

• The top open market net rent for a notional standard shop in prime<br />

super regional centres has remained flat in <strong>Q2</strong> <strong>2013</strong> at around AED<br />

5,700 per sq m. The Primary Super Regional malls such as <strong>Dubai</strong><br />

Mall and Mall of the Emirates continue to dominate the market in<br />

terms of footfall, sales volumes, rental values and occupancy rates.<br />

• With demand for retail growing and consumer spending improving,<br />

some older malls, such as Deira City Centre or Bur Juman, have<br />

started revamping their facilities in an attempt to position themselves<br />

as modern destinations that can compete with the large newer<br />

AED / sq m <strong>Q2</strong> <strong>2013</strong><br />

Primary<br />

Secondary<br />

Super Regional 4,300-5,700 1,000-2,400<br />

Regional 1,350-2,700 970-1,900<br />

Community 1,300-2,400 1,100-1,350<br />

Neighbourhood 2,450-2,700 1,100<br />

Convenience 1,500-1,900 1,300-1,400<br />

Note: Based on a basket of malls of different size. (See definitions for further details)<br />

shopping centres such as <strong>Dubai</strong> Mall.<br />

• As the resident population in <strong>Dubai</strong> is growing, community and<br />

neighbourhood malls have been performing well, catering to the<br />

needs of their surrounding communities. In general, those small-scale<br />

centres accommodate the demand of households and comprise<br />

retailers such as home furniture shops, electronics, groceries and<br />

services (e.g. doctors’ clinics).<br />

• Overall, the retail market in <strong>Dubai</strong> continues to improve. The large<br />

primary centres remain very popular and are filling up quickly. With<br />

those centres becoming saturated, secondary malls might start to see<br />

some benefit in the coming months as retailers are unable to secure<br />

prime locations in the primary super regional centres.<br />

6000<br />

<strong>Dubai</strong> Retail Rents (Q1 2009 – <strong>Q2</strong> <strong>2013</strong>)<br />

5000<br />

4000<br />

3000<br />

2000<br />

1000<br />

0<br />

Primary<br />

Secondary<br />

Note: Chart shows mid-point ERV for an in-line store in a basket of Primary and Secondary<br />

Super Regional shopping malls. The rent quoted reflects a notional “standard” line store unit of<br />

100 sq m.<br />

Source: Jones Lang LaSalle, <strong>Q2</strong> <strong>2013</strong><br />

20


Retail sector summary<br />

Indicator Level Comment / Outlook<br />

Current Retail Space (GLA) 2,815,000 sq m No major retail completions in <strong>Q2</strong> <strong>2013</strong>.<br />

Future Supply (<strong>2013</strong> – 2015)<br />

Average Retail Rents in<br />

Primary Malls<br />

Average Retail Rents in<br />

Secondary Malls<br />

Average Regional Mall<br />

Vacancy<br />

371,000 sq m<br />

AED 5,000 / sq m<br />

AED 1,725 / sq m<br />

13%<br />

The main upcoming retail completions for H2 <strong>2013</strong> are likely to<br />

be Phase I of the Avenue by Meraas and Phase II of Al<br />

Ghurair City. Other large-scale retail projects to be delivered<br />

thereafter include The Beach Mall, The Dragon Mart<br />

expansion, the <strong>Dubai</strong> Pearl Shopping Mall and the Nakheel<br />

Mall on Palm Jumeirah.<br />

Rents of prime units in better performing centers have<br />

remained unchanged in <strong>Q2</strong> <strong>2013</strong>. Average rents in<br />

secondary malls started to improve as retail space is<br />

becoming hard to find in the primary malls.<br />

Citywide retail vacancy has remained unchanged at<br />

13% as the strong occupancy levels in the better<br />

performing super regional and regional centres<br />

continue to counterbalance the higher vacancy levels<br />

in tier-two malls.<br />

21


<strong>Dubai</strong> hotel market overview


No. of Rooms<br />

Hotel supply<br />

• The second quarter of <strong>2013</strong> witnessed only one major opening in<br />

the branded hotel segment, The Oberoi hotel in Business Bay.<br />

The hotel marks the entry of The Oberoi Group in the UAE.<br />

• Major openings scheduled throughout <strong>2013</strong> include the Conrad on<br />

Sheikh Zayed Road, Sofitel on The Palm, Novotel Al Barsha and<br />

Anantara Royal Amwaj on Palm Jumeirah.<br />

• During the second quarter of <strong>2013</strong>, several hotel developments<br />

were announced such as the first Wyndham property in <strong>Dubai</strong><br />

Marina, Viceroy Resort on the trunk of Palm Jumeirah and the Taj<br />

Arabia project in <strong>Dubai</strong>land. These new projects represent the<br />

entry of new brands and operators into the <strong>Dubai</strong> hospitality<br />

market.<br />

• <strong>Dubai</strong> Department of Tourism and Commerce <strong>Market</strong>ing (DTCM)<br />

announced recently the Vision 2020 for the tourism sector with an<br />

ambitious objective of achieving 20 million tourists by 2020. The<br />

hospitality supply and tourism projects planned for the next 7 – 8<br />

years are expected to be aligned to this goal.<br />

• In order to meet the “20 million tourists by 2020” target and the<br />

expected growing demand, developers will need to accelerate with<br />

their hotel projects.<br />

• Beyond 2015, we expect more projects to come in the new<br />

available areas, such as in Business Bay, which represents an<br />

extension to the almost saturated Downtown or in <strong>Dubai</strong> World<br />

Central.<br />

• There is no doubt that a winning bid for <strong>Dubai</strong> at Expo 2020 will<br />

give a strong kick to the tourism sector and will accelerate the<br />

demand for additional hospitality projects. More hotels could be<br />

planned at <strong>Dubai</strong> World Central, around the Expo site, in the Jebel<br />

Ali area or next to the Convention Center.<br />

• Because of the increasing pressure to deliver more hotel projects<br />

in <strong>Dubai</strong>, we have started to notice the conversion of some<br />

commercial office buildings into hotels and serviced apartments.<br />

But the possibility to do so remains constrained by the nature of<br />

the buildings and how easy it is to convert certain office space.<br />

70,000<br />

65,000<br />

60,000<br />

55,000<br />

50,000<br />

45,000<br />

40,000<br />

35,000<br />

<strong>Dubai</strong> Hotel Stock (2012 – 2015)<br />

4,100<br />

57,345 58,100<br />

3,800<br />

62,200<br />

3,000<br />

66,000<br />

2012 <strong>2013</strong>F 2014F 2015F<br />

Current Supply<br />

Source: Jones Lang LaSalle, <strong>Q2</strong> <strong>2013</strong><br />

Future Additions<br />

23


Expected major hotels completions – <strong>2013</strong>/2014<br />

Conrad<br />

559 Rooms<br />

Oberoi<br />

252 Rooms<br />

Sofitel<br />

543 Rooms<br />

JW Marriott Marquis<br />

(First Phase)<br />

804 Rooms<br />

Novotel<br />

466 Rooms<br />

Anantara<br />

293 Rooms<br />

Completed<br />

Under Construction<br />

24


ADR (USD)<br />

Occupancy(%)<br />

Hotel performance<br />

• <strong>Dubai</strong> received over 10 million tourists during 2012 , a record for the<br />

Emirate and a 9% increase over 2011. The positive upward trend in<br />

tourist arrivals has continued into <strong>2013</strong> and is reflected in the improved<br />

hotel performances across the city.<br />

• The airport arrivals have registered a 16.8% increase in the January-<br />

May <strong>2013</strong> period over the same period in 2012 supporting the demand<br />

curve. Earlier this year, <strong>Dubai</strong> Airport became the second busiest<br />

airport in the world, maintaining its growth story.<br />

• While historically the summer months represent a slow season for the<br />

tourism industry, this summer could represent an exception for <strong>Dubai</strong><br />

as the number of visitors is expected to remain strong by benefiting<br />

from unstable situations in other traditional summer destinations in the<br />

region.<br />

280<br />

240<br />

200<br />

160<br />

120<br />

<strong>Dubai</strong> Hotel Performance (YT May 2010 - <strong>2013</strong>)<br />

88%<br />

84%<br />

80%<br />

76%<br />

72%<br />

• Occupancy rates as at YT May <strong>2013</strong> have increased by 2 percentage<br />

points over the same period in 2012, reaching 85% on a city-wide<br />

basis.<br />

• Average Daily Rates have witnessed an 5% improvement reaching<br />

USD 267 in YT May <strong>2013</strong> as compared to same period in 2012.<br />

• As a result RevPAR levels showed an impressive 7.5% growth<br />

reaching USD 228 in YT May <strong>2013</strong> over the same period in 2012.<br />

80<br />

2010 YTD 2011 YTD 2012 YTD <strong>2013</strong> YTD<br />

ADR<br />

Occupancy<br />

Source: STR Global<br />

68%<br />

25


Hotel market summary<br />

Indicator Level Comment / Outlook<br />

Current Hotel Supply<br />

58,100 rooms<br />

The second quarter of <strong>2013</strong> witnessed the addition of The Oberoi<br />

Business Bay with 250 guestrooms.<br />

Future Supply (<strong>2013</strong> - 2015)<br />

10,900 rooms<br />

Major openings scheduled for <strong>2013</strong> include the Conrad Sheikh<br />

Zayed Road, Novotel Al Barsha, Sofitel Palm Jumeirah and<br />

Anantara Royal Amwaj amongst others.<br />

<strong>2013</strong> YTD Occupancy 85%<br />

Increase in YTD levels of occupancy with resurgence witnessed<br />

across all sub-markets.<br />

<strong>2013</strong> YTD ADR USD 267<br />

Average rates maintained their strong growth, already witnessed<br />

during 2012. As a result of resurgence in occupancy and<br />

stabilization in ADRs; RevPAR levels have a notable increase by<br />

7.5% on a city-wide average basis.<br />

26


<strong>Dubai</strong> industrial market overview


Industrial supply<br />

• In comparison to other countries in the <strong>Middle</strong> <strong>East</strong> and North Africa<br />

MENA region, the industrial market in <strong>Dubai</strong> is regarded as resilient<br />

and stable.<br />

• In <strong>Dubai</strong>, the industrial market is dominated mainly by light industries<br />

and logistics.<br />

• Jones Lang LaSalle estimates the industrial stock in <strong>Dubai</strong> to stand at<br />

approximately 66 million sq m of built space, representing around 20%<br />

of the total industrial land, with JAFZA North believed to have the<br />

largest stock in <strong>Dubai</strong>.<br />

• <strong>Dubai</strong> Industrial City (DIC) is the largest industrial project to-date and<br />

is spread across 52 million sq m (560 million sq ft) of land.<br />

• There have been large amounts of land earmarked for industrial uses<br />

in the new industrial areas allowing for expansion into the foreseeable<br />

future.<br />

<strong>Dubai</strong>’s Main Industrial Areas<br />

Traditional/Onshore areas Freezone Areas New Onshore Areas<br />

Examples: Al Quoz, Ras Al<br />

Khor; Al Qusais; Umm<br />

Ramool; Al Khabaisi<br />

Oldest areas, Well established<br />

and close to commercial areas<br />

within the city. Fully occupied<br />

and with stock of inferior<br />

quality<br />

Source: Jones Lang LaSalle, <strong>Q2</strong> <strong>2013</strong><br />

Examples: JAFZA, DAFZA;<br />

parts of <strong>Dubai</strong> World<br />

Central<br />

Operate under a free zone<br />

status. High quality<br />

products. Sophisticated<br />

and advanced<br />

infrastructure<br />

Good connectivity<br />

Examples: <strong>Dubai</strong><br />

Industrial City, <strong>Dubai</strong><br />

Investment Park<br />

<strong>Dubai</strong>’s newest<br />

industrial areas. Offer<br />

large space available<br />

for global occupiers.<br />

• The old areas such Ras Al Khor or Al Qusais do not have large plots of<br />

land, and land availability is scarce.<br />

• JAFZA North is considered to have the largest amount of industrial<br />

stock, estimated at 21,375,000 sq m of GFA, as it is home to major<br />

international companies.<br />

• The industrial sector in <strong>Dubai</strong> benefits from being less exposed to<br />

oversupply than other segments and is therefore projected to be one of<br />

the best performing sectors in the short-to-medium term.<br />

Recent Industrial Transactions<br />

Company Industry Location Area Date<br />

Arabian<br />

Automotive DIC Extra 139,000 June <strong>2013</strong><br />

Automobiles<br />

sq m<br />

DHL Logistics Meydan 17,200 sq m To open in<br />

Q3 2014<br />

CWT-SML Logistics DWC 12,500 sq m March <strong>2013</strong><br />

Othman Mohamed<br />

Sharif, Al Barakh<br />

Dates Factory,<br />

Interpro Wood<br />

Construction;<br />

Food; Wood<br />

DIC<br />

465,000 sq m<br />

land plots<br />

2012<br />

NMC Healthcare Pharmaceuticals DIP n/a October<br />

2012<br />

Nestle FMCG DWC 175,000 sq m<br />

land plot<br />

July 2012<br />

R&M Telecom DAFZA n/a July 2012<br />

28


Industrial demand<br />

• The increase in demand for industrial space in <strong>Dubai</strong> is supported by the<br />

growth of key sectors such as infrastructure, transportation and aviation.<br />

• Investments in infrastructure targeted mainly the Jebel Ali Free Zone, the<br />

Al-Maktoum International Airport and the expansion of <strong>Dubai</strong> Airport.<br />

• <strong>Dubai</strong> is now home to the 8th largest cargo airport in the world in <strong>Dubai</strong><br />

International Airport and Jebel Ali is the biggest port in the <strong>Middle</strong> <strong>East</strong>.<br />

• The growth of the industrial sector in <strong>Dubai</strong> is furthermore illustrated by the<br />

following figures:<br />

• Jebel Ali sea port opened its third terminal that will increase its capacity<br />

to 19 million TEU’s* a year, by 2014.<br />

• DAFZA reported a 26% increase in revenue in 2012, in addition to a 37%<br />

growth in the number of construction and engineering companies and a<br />

25% increase in the number of registered UK companies. DAFZA hosts<br />

1,600 companies.<br />

• <strong>Dubai</strong> Industrial City reported a growth of over 80% in the number of<br />

registered companies and an 82% warehouse occupancy rate in 2012.<br />

DIC now hosts 471 companies, up from 259 in 2011.<br />

• JAFZA has seen an increase of 26% in the number of companies in<br />

2012, bringing the total number of companies in JAFZA to over 6,900.<br />

• Abu Dhabi Islamic Bank (ADIB) announced it will provide AED 500<br />

million for the expansion of DAFZA’s facilities.<br />

• <strong>Dubai</strong> Industrial City has selected Rajihi Construction to work on<br />

infrastructure development projects valued at AED 100 million.<br />

• JAFZA signed a memorandum of understanding with selected Korean<br />

banks to increase bilateral investment between the UAE and Korea.<br />

JAFZA is home to 74 Korean companies, including Samsung, LG and<br />

Daewoo.<br />

• Most of the current enquiries involve the expansion or consolidation of<br />

companies already located in <strong>Dubai</strong>. However, as global economic<br />

conditions improve this trend is expected to change with increased interest<br />

from new entrants.<br />

• Occupier demand falls into two categories: smaller tenants prefer to rent or<br />

buy existing facilities, while large global corporates prefer to acquire land<br />

plots on which to develop their own facilities, as they cannot find high quality<br />

speculatively built premises.<br />

• As the volume of freight through both Jebel Ali port and the new Al Maktoum<br />

International Airport at <strong>Dubai</strong> World Centre continues to increase, there is<br />

likely to be continued demand for warehousing and logistics space in the<br />

major industrial locations to the south of <strong>Dubai</strong>.<br />

Area<br />

Land Area<br />

(sq m)<br />

Number of<br />

Companies<br />

(2012)<br />

Growth during 2012<br />

DAFZA 2,000,000 1,600 37% growth in<br />

registered companies<br />

JAFZA<br />

JAFZA North:<br />

45,000,000<br />

JAFZA South:<br />

35,000,000<br />

6,918 26% growth in<br />

registered companies<br />

<strong>Dubai</strong> Industrial City 52,000,000 471 82% growth in<br />

registered companies<br />

<strong>Dubai</strong> Investment<br />

Park<br />

Approximate figures<br />

Source: Jones Lang LaSalle, Q1 <strong>2013</strong><br />

* TEU: Twenty-Foot Equivalent Unit<br />

16,500,000 2,162 n/a<br />

29


Main industrial areas<br />

DIC<br />

DWC<br />

DIP<br />

Jebel Ali Industrial JAFZA Extension Umm Ramool<br />

JAFZA North<br />

Al Qouz<br />

DAFZA<br />

Technopark<br />

Ras Al Khor<br />

Al Qusais<br />

30


Industrial performance<br />

• Rental rates in completed industrial units in <strong>Dubai</strong> currently vary<br />

significantly from one area to another, with no real standardization of<br />

logistics facilities.<br />

• The average rent across onshore areas is around AED 350 per<br />

sq m. The older areas command average rents of 300-550 per<br />

sq m, due to their proximity to local markets, despite the poor quality<br />

of their stock and the relatively underdeveloped infrastructure<br />

systems. Completed units in newer but more peripheral locations<br />

(such as DIC and DIP) offer somewhat lower average rents.<br />

• The free zone areas of Jebel Ali and <strong>Dubai</strong> Airport command a higher<br />

average of between AED 350 – 800 per sq m for completed<br />

warehousing units<br />

• Currently quality does not seem to be driving price. Price remains<br />

determined by critical mass, clustering and location as companies<br />

prefer being positioned close to the CBD.<br />

• Demand is starting to shift towards those areas offering better quality<br />

products, well developed infrastructure and access to ports and/or<br />

airports (e.g. DIC, DIP, JAFZA). Al Maktoum International Airport will<br />

start transforming into an integrated logistics platform over time,<br />

increasing the attraction of industrial areas to the south of <strong>Dubai</strong>.<br />

• The industrial market has been much less cyclical than other sectors<br />

over recent years and continues to be dominated by long term<br />

commitments to single tenants.<br />

Warehouse rents<br />

Area<br />

Older Onshore Areas<br />

Newer Onshore areas (excl.<br />

Freezone areas)<br />

Freezone areas<br />

Land lease sales<br />

Area<br />

Unit Lease<br />

AED / sq m / p.a.<br />

Lease term<br />

300-550 Annual<br />

200-350 3-5-10 years (DIC)<br />

1 year (DIP)<br />

350-800<br />

(DAFZA rates 600-800)<br />

1- 2 years<br />

Land Lease<br />

AED / sq m / p.a<br />

Older Onshore Areas 50-80<br />

Newer Onshore areas (excl.<br />

Free Zone areas)<br />

Free Zone areas<br />

30-50<br />

20-80 (JAFZA)<br />

40-100 (DAFZA)<br />

31


Definitions and methodology<br />

Office:<br />

• The supply data is based on our quarterly survey of 20<br />

sub markets, starting from 2009.<br />

• Completed building refers to a building that is handed over for<br />

immediate occupation.<br />

• Central Business District includes DIFC, DTCD, Sheikh Zayed<br />

Road, Burj Khalifa Downtown. Free Zone areas include Jumeirah<br />

Lake Towers, DIFC, TECOM, <strong>Dubai</strong> Silicon Oasis, DWC, <strong>Dubai</strong><br />

Outsource Zone and IMPZ.<br />

• Prime Office Rent represents the top open-market rent (open<br />

market refers to a new leasing – not to a sitting tenant) that could be<br />

expected for a notional office unit of the highest quality and<br />

specification in the best location in a market, as at the survey date.<br />

Data relates to headline rents, exclusive of incentives.<br />

• Prime Capital Value represents the top open-market capital value<br />

that could be expected for a notional office building of the highest<br />

quality and specification in the best location on the survey date.<br />

• Prime capital values are a calculation, derived from prime rents and<br />

yields:<br />

Capital Value = (Prime Annual Rent / Prime Yield From) * 100<br />

Residential:<br />

• The supply and stock data is based on our quarterly survey of 37<br />

sub markets, starting from 2009. This data excludes labour<br />

accommodation and local Emirati housing supply.<br />

• Completed building refers to a building that is handed over for<br />

immediate occupation.<br />

• Residential performance data is based on the REIDIN monthly<br />

index. REIDIN.com <strong>Dubai</strong> Residential Property Price Indices<br />

(RPPIs) use monthly sample of offered/asked listing price data and<br />

land registry price data (transaction data). Index series are set at<br />

100 starting at the beginning of each data set.<br />

32


Definitions and methodology<br />

Retail:<br />

• Classification of Retail Centres is based upon the ULI definition and<br />

based on their GLA:<br />

• Super Regional Malls have a GLA of above 90,000 sq m<br />

• Regional Malls have a GLA of 30,000 - 90,000 sq m<br />

• Community Malls have a GLA of 10,000 - 30,000 sq m<br />

• Neighbourhood Malls have a GLA of 3,000 - 10,000 sq m<br />

• Convenience Malls have a GLA of less than 3,000 sq m<br />

• Primary Malls are the good performing malls with high levels of<br />

turnover. Secondary Malls are the average performing malls with<br />

lower levels of turnover.<br />

• Prime Rent Shopping Centre represents the top open market net<br />

rent that could be expected for a notional standard in line unit shop<br />

of 100 sq m situated in a specified shopping centre as at the survey<br />

date.<br />

Hotels:<br />

• Hotel room supply is based on existing supply figures provided by<br />

DTCM as well as future hotel development data tracked by<br />

Jones Lang LaSalle Hotels. Room supply includes all graded supply<br />

and excludes serviced apartments.<br />

• STR performance data is based on monthly survey conducted by<br />

STR Global on a sample of more than 32,000 rooms across <strong>Dubai</strong>.<br />

Industrial:<br />

• Industrial Stock is calculated on the basis of applying a site<br />

coverage to the total developed industrial land.<br />

• Industrial rental values are based on average asking rents across<br />

14 major industrial areas in <strong>Dubai</strong>.<br />

33


Contacts:<br />

Robin Pugh<br />

Head of Agency<br />

MENA<br />

robin.pugh@jll.com<br />

Gabriel Matar<br />

Director, MEA<br />

Hotels & Hospitality Group<br />

gabriel.matar@jll.com<br />

Andrew Williamson<br />

Head of Retail<br />

MENA<br />

andrew.williamson@jll.com<br />

Michael Heitmann<br />

National Director, Industrial<br />

MENA<br />

michael.heitmann@jll.com<br />

Craig Plumb<br />

Head of Research<br />

MENA<br />

craig.plumb@jll.com<br />

Cynthia Nasseh<br />

Senior Research Analyst<br />

MENA<br />

cynthia.nasseh@jll.com<br />

@<strong>JLL</strong>News youtube.com/joneslanglasalle linkedin.com/company/jones-lang-lasalle joneslanglasalleblog.com/EMEAResearch<br />

www.jll–mena.com<br />

COPYRIGHT © JONES LANG LASALLE IP, INC. <strong>2013</strong><br />

This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior<br />

written consent of Jones Lang LaSalle IP, Inc. The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is<br />

made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them. Jones Lang LaSalle does not accept<br />

any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.

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