Observer Q1 2016
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Chestertons MENA<br />
OBSERVER<br />
<strong>Q1</strong><br />
D U B A I<br />
<strong>2016</strong>
Report Highlights<br />
The Chestertons MENA OBSERVER | <strong>Q1</strong> <strong>2016</strong><br />
Prices: Villa segment witnessed a 1% decline in sales prices, whereas the apartments<br />
recorded a mere 0.7% decline<br />
Rental: The first quarter of the year witnessed a relatively flat market in terms of<br />
rental movements across the city. Some location such as silicon oasis recorded<br />
increase in rentals<br />
Yields: With a relatively flat quarter, the rental yields have not witnessed a major<br />
movement. Secondary locations continue to enjoy higher yields<br />
Transactions: <strong>Q1</strong> <strong>2016</strong> recorded transactions worth AED 27 Billion, up by 11% from<br />
the previous quarter. Mortgage jumped by more than 50%, while sales transactions<br />
declined by approximately 19%<br />
Outlook: We expect the market to remain sluggish during Q2 <strong>2016</strong> due to<br />
combination of factors including lower oil prices, dollar appreciation and economic<br />
uncertainties.<br />
Residential Market Movement – <strong>Q1</strong> <strong>2016</strong><br />
Price Change Rental Change Transactions<br />
-0.7%<br />
Apartments<br />
-0.5%<br />
Apartments<br />
-20%<br />
Sales<br />
-1.1%<br />
Villas<br />
-0.3%<br />
Villas<br />
50%<br />
Mortgage<br />
Key Numbers<br />
AED 27.6 Billion<br />
Value of Total Transactions<br />
AED 1,221 / sq.ft.<br />
Average sale price of residential unit<br />
461,000<br />
Total number of housing units<br />
D U B A I R E S I D E N T I A L<br />
01
Residential - House Prices<br />
APARTMENTS - Quarterly Change<br />
Market Price Points (<strong>Q1</strong> <strong>2016</strong>)<br />
The Chestertons MENA OBSERVER | <strong>Q1</strong> <strong>2016</strong><br />
Q4 2015 <strong>Q1</strong> <strong>2016</strong> QoQ Change<br />
6%<br />
5 BR (Villas)<br />
2,300,000<br />
18,250,000<br />
AED/SQ. FT<br />
AED/SQ. FT<br />
2500<br />
2000<br />
1500<br />
1000<br />
500<br />
0<br />
3000<br />
2500<br />
2000<br />
1500<br />
1000<br />
500<br />
0<br />
1163<br />
Business Bay<br />
1600<br />
1125 1472<br />
1810<br />
1875<br />
DIFC<br />
795<br />
785<br />
845<br />
835<br />
Discovery Gardens<br />
Source: Chestertons Analysis<br />
870<br />
865<br />
2175<br />
2169<br />
Downtown Dubai<br />
Dubai Marina<br />
Dubai Silicon Oasis<br />
Dubai Sports City<br />
Dubai Land<br />
International City<br />
JLT<br />
VILLAS - Quarterly Change<br />
Q4 2015 <strong>Q1</strong> <strong>2016</strong><br />
844<br />
845<br />
1660<br />
1591<br />
1200<br />
1200<br />
785<br />
826<br />
1115<br />
1105<br />
835<br />
833<br />
1365<br />
1365<br />
795<br />
788<br />
693<br />
688<br />
1365<br />
1365<br />
1385<br />
1350<br />
1185<br />
1195<br />
1000<br />
863<br />
863<br />
JVC<br />
975<br />
1318<br />
1300<br />
The Greens<br />
958<br />
958<br />
1595<br />
1595<br />
The Views<br />
1712<br />
1650<br />
790<br />
807<br />
Remraam<br />
QoQ Change<br />
1495<br />
1495<br />
886<br />
875<br />
Dubai Motor City<br />
2700<br />
2600<br />
4%<br />
2%<br />
0%<br />
-2%<br />
-4%<br />
-6%<br />
-8%<br />
-10%<br />
2%<br />
1%<br />
0%<br />
-1%<br />
-2%<br />
-3%<br />
-4%<br />
4 BR (Villas)<br />
3 BR (Villas)<br />
2 BR<br />
1 BR<br />
Studio<br />
1,700,000<br />
1,200,000<br />
700,000<br />
2,375,000<br />
435,000<br />
600,000<br />
300,000<br />
Market Commentary<br />
6,150,000<br />
12,000,000<br />
17,500,000<br />
Upper Range<br />
Low Range<br />
All Prices in AED<br />
Source: Propertyfinder, Dubizzle<br />
Price correction: Apartment sales prices witnessed a mere 0.7% decline<br />
in <strong>Q1</strong> <strong>2016</strong>. The villa segment witnesses a 1.1% decline. After a constant<br />
decline in prices last year, the market took a relatively stable turn in <strong>Q1</strong><br />
<strong>2016</strong><br />
Supply: The residential market took delivery of approximately 1100 new<br />
units mainly in the apartments segment. In the villa segment, Jumeirah<br />
Golf Estate and Jumeirah Village delivered approximately 46 and 14 units<br />
respectively<br />
Arabian ranches<br />
Mudon<br />
Falcon City<br />
of Wonders<br />
The Villa<br />
Jumeirah Park<br />
The Springs<br />
The Meadows<br />
The Lakes<br />
Victory Heights<br />
Al Furjan<br />
JVT<br />
Jumeirah Islands<br />
Palm Jumeirah<br />
Outlook: Market expected to remain quiet during summer months due to<br />
economic uncertainty and cautious attitude of investors. Affordable<br />
segment continues to see demand.<br />
Source: Chestertons Analysis<br />
02<br />
D U B A I R E S I D E N T I A L<br />
D U B A I R E S I D E N T I A L<br />
03
The Chestertons MENA OBSERVER | <strong>Q1</strong> <strong>2016</strong><br />
Residential - Rental Market<br />
APARTMENTS - Quarterly Change<br />
Market Price Points (<strong>Q1</strong> <strong>2016</strong>)<br />
Studio 1 BR 2 BR 3 BR<br />
QoQ Change<br />
5 BR (Villas)<br />
150,000<br />
900,000<br />
THOUSANDS<br />
THOUSANDS<br />
200<br />
150<br />
100<br />
50<br />
600<br />
500<br />
400<br />
300<br />
200<br />
100<br />
103<br />
75<br />
Business Bay<br />
203 248310<br />
135 193<br />
118 163<br />
235<br />
85<br />
DIFC<br />
50<br />
Discovery Gardens<br />
109 140<br />
73<br />
90<br />
78<br />
Downtown Dubai<br />
230<br />
65<br />
All Figures in AED / Annum<br />
Source: Chestertons Analysis<br />
Dubai Marina<br />
115<br />
45<br />
215<br />
Dubai Silicon Oasis 85 125<br />
225 268<br />
50<br />
Dubai Sports City 70<br />
283<br />
100<br />
130<br />
Remraan 45<br />
60 295<br />
43<br />
Dubailand<br />
435<br />
5578<br />
225 190 220 International City 40 310<br />
5575<br />
173<br />
63<br />
225<br />
93<br />
JLT<br />
125<br />
180 178<br />
213<br />
53<br />
233<br />
JVC 68<br />
95<br />
140<br />
315 385<br />
The Greens<br />
69<br />
85<br />
135<br />
165<br />
303 345<br />
443<br />
The Views<br />
75<br />
110<br />
150<br />
188<br />
115<br />
Dubai Motor City 60 83 128<br />
175<br />
VILLAS - Quarterly Change<br />
3 BR 4 BR 5 BR<br />
188 203<br />
220<br />
190<br />
198 230<br />
195 215<br />
243<br />
230 275 290<br />
203 220<br />
QoQ Change<br />
2%<br />
1%<br />
0%<br />
-1%<br />
-2%<br />
-3%<br />
-4%<br />
-5%<br />
-6%<br />
6%<br />
4%<br />
2%<br />
0%<br />
-2%<br />
-4%<br />
-6%<br />
4 BR (Villas)<br />
3 BR (Villas)<br />
2 BR<br />
1 BR<br />
Studio<br />
130,000<br />
95,000<br />
250,000<br />
55,000<br />
185,000<br />
40,000<br />
100,000<br />
31,000<br />
325,000<br />
Market Commentary<br />
650,000<br />
Price correction: Overall apartment rental market witnessed a 0.5%<br />
decline in rentals in <strong>Q1</strong> <strong>2016</strong>. Downtown Dubai witnessed the highest<br />
decline at approximately 5%. In the villa segment Palm Jumeirah<br />
witnessed the highest decline at approximately 2.5%<br />
Upper Range<br />
Lower Range<br />
All Prices in AED<br />
Source: Property finder, Dubizzle<br />
Luxury units are excluded<br />
Demand: Affordable housing continues to be in high demand as end<br />
users look to reduce the cost of living by switching to affordable housing<br />
segments.<br />
0<br />
Arabian Ranches<br />
Mudon<br />
Falcon City<br />
of Wonders<br />
The Villa<br />
All Figures in AED / Annum<br />
Source: Chestertons Analysis<br />
Jumeirah Park<br />
The Springs<br />
The Meadows<br />
The Lakes<br />
Victory Heights<br />
Al Furjan<br />
JVT<br />
Jumeirah Islands<br />
Jumeirah Golf Estates<br />
Palm Jumeirah<br />
-7%<br />
Outlook: Rental demand is expected to be weak at current prices as<br />
current economic situation could affect disposable income of residents<br />
adversely. High-end apartment/villa segment to see more correction.<br />
quarters, depending upon the location and type of property.<br />
04<br />
D U B A I R E S I D E N T I A L<br />
D U B A I R E S I D E N T I A L<br />
05
Residential - Gross Yields<br />
The Chestertons MENA OBSERVER | <strong>Q1</strong> <strong>2016</strong><br />
10.0%<br />
9.0%<br />
8.0%<br />
7.0%<br />
6.0%<br />
5.0%<br />
4.0%<br />
3.0%<br />
2.0%<br />
1.0%<br />
0.0%<br />
6.7%<br />
6.2%<br />
9.5%<br />
APARTMENT YIELDS<br />
8.2%<br />
7.7%<br />
7.7%<br />
5.7% 5.5%<br />
9.6%<br />
7.8%<br />
8.0%<br />
7.6%<br />
7.1%<br />
7.8%<br />
7.4%<br />
7.5%<br />
4.7%<br />
AVERAGE RESIDENT<br />
6.6% 6.8% 5.6% 4.7%<br />
8.4%<br />
7.7%<br />
3.9%<br />
Business Bay<br />
Source: Chestertons Analysis<br />
DIFC<br />
Discovery Gardens<br />
Downtown Dubai<br />
Dubai Marina<br />
Dubai Silicon Oasis<br />
Dubai Sports City<br />
Dubai Land<br />
International City<br />
JLT<br />
JVC<br />
The Greens<br />
The Views<br />
Remraam<br />
Dubai Motor City<br />
Apartment<br />
Source: Chestertons Analysis<br />
Villa<br />
Studio<br />
1BR<br />
2BR<br />
3BR<br />
3 BR (Villas)<br />
4 BR (Villas)<br />
5 BR (Villas)<br />
VILLA YIELDS<br />
7.0%<br />
6.0%<br />
5.0%<br />
4.0%<br />
3.0%<br />
2.0%<br />
5.1%<br />
5.9%<br />
44%<br />
4.4%<br />
44%<br />
4.4%<br />
4.9%<br />
6.4%<br />
5.9%<br />
5.1%<br />
45%<br />
4.1% 4.5%<br />
5.6%<br />
3.2%<br />
4.2%<br />
2.6%<br />
Market Commentary<br />
Overall market yields have been slightly attractive as residential<br />
prices dropped this quarter.<br />
Apartments provide higher average yield than villas.<br />
1.0%<br />
0.0%<br />
International City and Discovery Gardens are the highest yield<br />
providers in apartments.<br />
Arabian<br />
Ranches<br />
Mudon<br />
Falcon City of<br />
Wonders<br />
The Villa<br />
Jumeirah Park<br />
The Springs<br />
The Meadows<br />
The Lakes<br />
Victory<br />
Heights<br />
Al Furjan<br />
JVT<br />
Jumeirah<br />
Islands<br />
Jumeirah Golf<br />
Estates<br />
Palm<br />
Jumeirah<br />
Villa segment overall provided an average yield of 4.7%<br />
Source: Chestertons Analysis<br />
Source: Chestertons Analysis<br />
06<br />
D U B A I R E S I D E N T I A L<br />
D U B A I R E S I D E N T I A L<br />
07
Residential - Transactions<br />
January <strong>2016</strong> recorded highest value of transactions<br />
at AED 11.2 Billion<br />
Emirates Living was top traded area with transactions<br />
worth AED 2.2 Billion<br />
The Chestertons MENA OBSERVER | <strong>Q1</strong> <strong>2016</strong><br />
Transactions<br />
11.2<br />
Emirates Living<br />
2,240<br />
8.9<br />
7.4<br />
Dubai Marina<br />
1,042<br />
Palm Jumeirah<br />
947<br />
Business Bay<br />
942<br />
January February March<br />
Arabian Ranches<br />
436<br />
All Figures in AED Billions<br />
All Figures in AED Millions<br />
Apartments accounted for majority of transactions at 85%<br />
Villa<br />
15%<br />
Market Commentary<br />
Total transactions for <strong>Q1</strong> <strong>2016</strong> increased by 11% to AED 27<br />
Billion<br />
Sales transactions for <strong>Q1</strong> <strong>2016</strong> amounted to AED 10.2 Billion a<br />
decrease of 19% compared to Q4 2015.<br />
Apartment<br />
85%<br />
Mortgage transactions amounted to AED 17.3 Billion in <strong>Q1</strong><br />
<strong>2016</strong>, an increase of more than 50% from Q4 2015<br />
08<br />
D U B A I R E S I D E N T I A L<br />
D U B A I R E S I D E N T I A L<br />
09
Office Market - Summary<br />
SALES PRICES<br />
<strong>Q1</strong> <strong>2016</strong> Q4 2015 QoQ Change<br />
March <strong>2016</strong> recorded highest value of transactions<br />
at AED 374 Million<br />
The Chestertons MENA OBSERVER | <strong>Q1</strong> <strong>2016</strong><br />
2500<br />
2000<br />
1905<br />
1925<br />
0.00%<br />
-0.20%<br />
374<br />
AED/SQ. FT<br />
1500<br />
1000<br />
1250<br />
1250<br />
1070<br />
1075<br />
723<br />
725<br />
1088<br />
1100<br />
-0.40%<br />
-0.60%<br />
-0.80%<br />
147<br />
256<br />
500<br />
-1.00%<br />
0<br />
-1.20%<br />
Business Bay JLT Dubai Silicon<br />
Oasis<br />
DIFC<br />
TECOM<br />
Jan Feb March<br />
Source: Chestertons Analysis<br />
Figures in AED/ sQ. FT, p.a<br />
Figures in AED Millions<br />
RENTAL PRICES<br />
<strong>Q1</strong> 2015 Q2 2015 QoQ Change<br />
0.0%<br />
AED/SQ. FT<br />
250<br />
200<br />
150<br />
100<br />
50<br />
108<br />
113<br />
110<br />
113<br />
60<br />
60<br />
200<br />
203<br />
100<br />
103<br />
0.5%<br />
1.0%<br />
-1.5%<br />
-2.5%<br />
-3.0%<br />
-3.5%<br />
-4.0%<br />
-4.5%<br />
Market Commentary<br />
Total value of transactions recorded for <strong>Q1</strong> <strong>2016</strong> was AED 778 Million, a<br />
decrease of 7% from Q4 2015<br />
Sales transactions recorded in <strong>Q1</strong> <strong>2016</strong> was approximately AED 497<br />
Million<br />
50<br />
Business Bay JLT Dubai Silicon<br />
Oasis<br />
DIFC<br />
TECOM<br />
-5.0%<br />
Mortgage transactions recorded for <strong>Q1</strong> <strong>2016</strong> was approximately AED 281<br />
Million<br />
Source: Chestertons Analysis<br />
Figures in AED/ sQ. FT, p.a<br />
10<br />
D U B A I O F F I C E<br />
D U B A I O F F I C E<br />
11
Chestertons MENA<br />
OBSERVER<br />
Contact Us<br />
Robin Teh, MRICS<br />
Country Manager - UAE<br />
Valuations & Advisory Director, MENA<br />
Office · +9714 392 7818<br />
Fax · +9714 325 3359<br />
Email · robin.teh@chestertons.com<br />
Nazia Zaidi<br />
Research Manager<br />
Office · +9714 392 7818<br />
Fax · +9714 325 3359<br />
Email · nazia.zaidi@chestertons.com<br />
MENA Head Office<br />
1802, Blvd. Plaza Tower 1<br />
Sheikh Mohammed Bin Rashid Blvd.<br />
Downtown Dubai, P.O. Box 283361, Dubai, UAE<br />
Office · +9714 381 0200<br />
Fax · +9714 325 3359<br />
Dubai Office<br />
106, Rasis Business Center, Al Barsha 1<br />
PO Box 283361, Dubai, United Arab Emirates<br />
Office · +9714 392 7818<br />
www.chestertons-mena.com<br />
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