UAE Real Estate Market – A Year in Review 2019...when compared to last year’s budget of AED 56.8 billion. The budget was approved to support the population growth expected from

A Year In Review 2019

JLL Research Report

UAE

The UAE Real Estate Market

The UAE Real Estate Market A Year In Review 2019 The UAE Real Estate Market A Year In Review 2019 0302

Economic and Market Overview

UAE GDP grew at around 1.9% in 2019, higher than 1.7% in 2018 and is expected to grow to 2.2% in 2020 according to Oxford Economics. Pro-growth government initiatives, rising investment ahead of Expo 2020 and expansionary fiscal stances by the federal and local governments should further improve the broad economic backdrop. Both Dubai and Abu Dhabi, which comprise the lion’s share of the UAE GDP, are embarking on stimulus plans to facilitate doing business, attract FDI, retain human capital, and improve the overall business environment.

While most sectors across the real estate market remained challenged during 2019, government is seeking to stimulate more rapid growth through a range of initiatives, which are expected to boost sentiment and drive demand over the coming months. In the year ahead, market performance will heavily depend on how quickly these initiatives take effect.

Following the various initiatives announced over the past year to boost demand, the Dubai government has taken steps to also limit future supply, with the formation of a new Real Estate Planning Committee in Q3 2019. Developers are also launching fewer new projects and focusing on the sale of existing inventories. Despite these trends the market is still expected to see a high level of deliveries in the short term.

Abu Dhabi’s real estate market also witnessed various government initiatives aimed at boosting demand. These focused primarily on attracting foreign investors and enhancing resident security. The freehold law launched in April 2019 allowing foreigners to own land and property in Abu Dhabi’s investment areas is expected to have a positive impact on the residential market and attract foreign investors.

Over the past year, corporations continued to consolidate operations and space requirements resulting in a gradual decline in rental rates. Demand for office space remains limited to small fitted units, and serviced space. In turn, the residential market registered subdued performance levels as apartment and villa sale prices and rents continued to decline.

UAE Budget 2020

Federal Budget:

A zero-deficit federal budget amount of AED 61.4 billion has been approved for UAE’s Fiscal year of 2020, which is a 2% increase from last year’s budget of AED 60.3 billion, making it the country’s largest federal budget to date. With the aim of achieving UAE’s 2021 vision and the UAE Centennial 2071, about 31% of the budget has been allocated to social development, 14% to infrastructure and economic resources, 6.5% to social benefits, and 32.6% to government affairs.

Dubai Budget

Dubai announced a budget of AED 66.4 billion for 2020, which similar to UAE is the largest-ever annual budget approved. It is an increase of around 17%, when compared to last year’s budget of AED 56.8 billion. The budget was approved to support the population growth expected from hosting Dubai Expo 2020, Dubai Plan 2021, and the city’s infrastructure and economy. Around 12% of the budget is dedicated to construction projects, mostly as part of the Expo 2020 infrastructure development. Moreover, 46% of the budget is allocated to support the economy, infrastructure and transportation and 30% for social development. To ensure complete readiness for the Expo 2020, a 3% special reserve has been set for the event. Additionally, Dubai has also approved a three-year (2020-2022) budget of AED 196 billion to support long-term planning and maintain economic stability.

Tourism

Large-scale projects, new visa rules and Expo 2020 is expected to boost tourist arrivals, helping Dubai to maintain its status as a major global tourist and FDI destination. Around 25 million visitors are expected to visit Dubai from across 192 countries during Expo 2020. On the other hand, Abu Dhabi has been a hub for hosting various types of events in 2019, attracting tourists and boosting the hospitality sector in the city. The annual Formula 1 weekend event that took place over the past quarter contributed greatly to the strong performance levels in the hospitality sector in Abu Dhabi. The demand for hospitality sector in Abu Dhabi is expected to keep on growing with the new upcoming events and festivals scheduled for the year 2020.

Overview

Dubai - Prime Rental Clock

Q4 2018 Q4 2019Hotel*

Office

Retail

Residential

RentalGrowth

Slowing

Rental Growth

Accelerating

RentsFalling

Rents BottomingOut

RentalGrowth

Slowing

Rental Growth

Accelerating

RentsFalling

Rents BottomingOut

Hotel*

Residential

Retail

Office

Abu Dhabi - Prime Rental Clock

Q4 2018 Q4 2019Hotel*

Office

Retail

RentalGrowth

Slowing

Rental Growth

Accelerating

RentsFalling

Rents BottomingOut

RentalGrowth

Slowing

Rental Growth

Accelerating

RentsFalling

Rents BottomingOut

Hotel*

Residential

Retail

Office

Residential

* Hotel clock reflects the movement of RevPAR (Revenue per available room: ADR * occupancy rate) Note: The property clock is a graphical tool developed by JLL to illustrate where a market sits within its individual rental cycle. These positions are not necessarily representative of investment or development market prospects. It is important to recognize that markets move at different speeds depending on their maturity, size and economic conditions. Markets

will not always move in a clockwise direction, they might move backwards or remain at the same point in their cycle for extended periods. Source: JLL

Prime Rental Clock

The UAE Real Estate Market A Year In Review 2019 04

Duba

i

The UAE Real Estate Market A Year In Review 2019 The UAE Real Estate Market A Year In Review 2019 0706

Source: REIDIN

Office - Dubai

There was approximately 182,000 sq m of office space delivered throughout 2019, which is the highest level of deliveries since 2015. Office complex in Silicon Park was the only completion in the last quarter of 2019, bringing the total office stock to around 8.7 million sq m.

Looking ahead, office supply is expected to increase to 9.1 million sq m by the end of 2020. Notable projects include ICD Brookfield Place in DIFC and Dubai Hills Square in Dubai Hills Estate. We remain cautious on the timely delivery of all these projects.

Although demand for office space remained weak in 2019, several initiatives have been launched by the government to boost demand and increase business activity in Dubai. Major initiatives include One Free Zone Passport, dual-licensing, full ownership of onshore companies and reduction of market fees imposed on businesses by the Dubai Municipality. These initiatives are expected to bring in more investments, generate employment, and positively influence office space demand in the medium to long term.

Supply

Average Grade A rents in the Central Business District (CBD) declined by 13% in the last quarter of 2019 to reach AED 1,358 when compared to the same period last year, with select buildings performing better. Average vacancy in the CBD increased to 14%, an increase of 300 basis points when compared to the same period last year. Demand for traditional office space remained weak in 2019 and the market remains in favor of tenants. Landlords continue to offer attractive terms such as competitive lease rates, fit out contributions, rent free period and minimal rental escalations to retain existing and attract new tenants.

The office market is expected to remain under pressure due to subdued market conditions. However, the government has launched multiple initiatives to target new and existing businesses. On one hand, it is trying to attract new entrants / entrepreneurs by setting up funds and incubators and on the other hand it is also making business conditions favorable for existing businesses by reducing costs, easing government process and reducing restrictions on ownership. These new changes can be expected to improve demand in the long run.

Performance

Source: JLL

0

2

4

6

8

10

8.19 8.32 8.49 8.55 8.74 9.078.74

0.100.34

GLA

(sq

m m

illio

n)

2015 2017 2018 2020F 2021F2016

Current Supply

2019

Future supply

Source: JLL

Vacancy Rate

Rents (AED / sq m / annum)

14%

Q4 2019

12 month outlook

1,553

Q4 2018

11%

12 month outlook

Q4 2018

1,358

Q4 2019

Residential - Dubai

More than 35,000 residential units were handed over in 2019, which is the highest ever delivered in a year. Major completions in Q4 included 3 residential buildings in Silicon Park, townhouses in Maple 1 and 2 and a residential complex in Al Qusais, bringing the total residential stock to around 555,000 units.

In preparation for Expo 2020, residential supply is expected to reach 637,000 by the end of 2020, representing an average annual increase of 15%. While more than 80,000 units are expected to be delivered in 2020, actual completions are likely to be far less (with the average materialization rate over the past 5 years being less than 50%). Major projects scheduled for delivery in 2020 include Azizi Riviera in Meydan and Al Habtoor City.

Supply

Dubai’s residential market recorded minimal declines of around 2% in both apartment and villa rent prices over the quarter. Sale prices decreased by 1% and 3% for apartment and villas respectively when compared to Q3 2019. Higher declines were recorded on an annual level, with apartment rents and sale prices declining by 8% and 5% respectively. Similarly, villa rent and sale prices declined by around 8% and 10% respectively when compared to the same period last year.

Overall the residential market remains tenant friendly, with landlords offering flexible payment options in order to attract new tenants. In addition to the various initiatives launched by the government to boost residential demand from potential foreign investors and residents, developers are also trying to enhance the residential market by providing various initiatives such as waiving off the 4% registration fees, offering monthly payment schemes, and post-handover plans.

Performance

0

100

200

300

400

500

600

700

460 480 497 519 555 637555

3383

Uni

ts (t

hous

and)

2015 2017 2018 2020F 2021F2016

Current Supply

2019

Future supply

Source: JLL

Residential property rent and sale indices

Sales

-1%Q-o-Q

Sales

-5%Y-o-Y

Rent

-2%Q-o-Q

Rent

-8%Y-o-Y

12 month outlook

12 month outlook

Apartments

Sales

-3%Q-o-Q

Sales

-10%Y-o-Y

Rent

-2%Q-o-Q

Rent

-8%Y-o-Y

12 month outlook

12 month outlook

Villas

The UAE Real Estate Market A Year In Review 2019 The UAE Real Estate Market A Year In Review 2019 0908

More than 282,000 sq m of retail GLA was completed in 2019, which is the highest level of deliveries since 2015. Major completions in Q4 included Nakheel Mall in Palm Jumeirah and The Zabeel expansion of the Dubai Mall in Downtown Dubai, bringing the total retail stock to around 4 million sq m in Dubai.

Looking ahead, retail supply is expected to reach 5 million sq m by the end of 2020, with notable projects including Dubai Hills Estate Mall in Dubai Hills Estate and Al Khail Avenue in Jumeirah Village Triangle. While the expected supply is dominated by super regional malls (78%), we can expect some delays or the reduction in scale of these projects, resulting in a significant reduction in the actual level of completions. The retail market currently faces the greatest danger of oversupply and therefore more delays in future projects can be anticipated.

Supply

The Dubai retail market currently faces challenging times as prominent retailers are either consolidating or limiting their expansion plans while others are increasingly turning to offer discounts and (or) promotions to increase consumer spending.

With the current market being tenant friendly, tenants are able to re-negotiate rents on favorable lease terms and landlords continue to offer concessions. Some retail operators have also started to offer short-term leases and turnover only rents for larger tenants. Additionally, landlords are also sharing operating costs in addition to providing capital contributions to fit-outs.

Market rentals in primary and secondary malls have continued to decline in 2019. While it is hard to quantify due to the variety of incentives and discounts being offered by landlords, we estimate that rentals have declined by around 14% and 23% for primary and secondary malls respectively for Q4 2019, when compared to Q4 2018. Market wide vacancies are estimated to have increased from 16% in Q4 2018 to 20% in Q4 2019.

Performance

Average retail rents (% change)

-14%

PrimaryY-o-Y

-23%

SecondaryY-o-Y 12 month

outlook

Source: JLL

0

2

4

6

3.1 3.4 3.6 3.8 4.0 5.04.0

0.43

0.93

GLA

(sq

m m

illio

n)

2015 2017 2018 2020F 2021F2016

Current Supply

2019

Future supply

Source: JLL

Retail - Dubai Hotel - Dubai

Around 7,200 keys were added in 2019, out of which around 3,200 keys were added in the last quarter. Major completions in Q4 included The Address Fountain Views in Downtown Dubai and Avani Ibn Battuta, bringing the total hospitality stock to around 126,800 keys.

Hotel supply is expected to reach around 151,000 keys by the end of 2020, with notable projects including Artesia in Damac Hills and Royal Atlantis in Palm Jumeirah. There has been an increase in budget and midscale segment, where 4-star hotels comprise more than 40% of the future supply.

Holiday homes have been increasing in popularity and in order to support this growing trend, partial title deeds, by which multiple investors can acquire a unit and have their interests recognized, were issued for the first time for serviced hotel apartments in 2019.

Supply

Hotel performance was under pressure throughout 2019 with YT November 2019 Average Daily Rates (ADR’s) reducing by 13% to register at USD 146 when compared to the same period last year. Similarly, Revenue Per Available Room (RevPAR) declined by 14% to USD 109 and occupancy levels decreased to 74% in YT November 2019, when compared to the same period last year.

There were multiple initiatives launched by the government in 2019 to boost the hospitality sector, such as exemption of visa fee (48 hours) for transit passengers and increasing popularity of Dubai in the cruise industry. On account of these various government initiatives and on the back of strong visitor arrivals growth associated with Expo 2020, the demand for hotel market can be expected to recover.

Performance

Source: STR Global

0

40

80

120

160

94 103 109 120 127 151127

3

3

24

Keys

(tho

usan

d)

2015 2017 2018 2020F 2021F2016

Current Supply

2019

Future supply

Source: JLL

ADR (USD)

Occupancy

12 month outlook

12 month outlook

YT November2018

74%

YT November2019

75%

169

YT November 2018

146

YT November 2019

Vacancy Rate

20%

Q4 2019

12 month outlook

16%

Q4 2018

10

Abu

Dhab

i

The UAE Real Estate Market A Year In Review 2019 The UAE Real Estate Market A Year In Review 2019 1312

Source: JLL

Around 1,000 residential units were delivered in Q4 2019, bringing the total stock to approximately 261,330 units. Notable deliveries on Saadiyat Island included Azure apartments and townhouses – part of phase 1 of Mamsha Al Saadiyat, Soho Square, Park View, and more.

By end of 2020, approximately 11,400 units are scheduled to enter the market, mainly within master planned communities such as Al Reem Island, Al Raha Beach, Saadiyat Island, and phase 1 of Riyadh City.

With limited demand for residential properties and vast supply in the market, developers are innovatively seeking opportunities to attract residents. Throughout the year, Aldar launched and successfully sold land plots in three developments introducing Saadiyat Reserves last quarter to cater to this unexpected demand, which is receiving steady sales. Furthermore, Aldar recently launched rent-to-own schemes on three of its prominent developments across the Investment Zones to offer security for its customers.

Supply

Performance of the residential rental market continued to soften, albeit at a slower rate. Apartment rents declined 1% Q-o-Q and 6% Y-o-Y in quality master planned communities. Additionally, villa rents declined 2% Q-o-Q and 4% Y-o-Y in prominent developments.

Sale prices for prime villas remained stable, whereas prices for apartments recorded a 1% decline Q-o-Q and 9% decline Y-o-Y. Many new residential developments are witnessing healthy off-plan sale transactions with the freehold law attracting residents to buy quality products at affordable and striking payment plans.

Looking ahead, with the large quantum of upcoming supply, we expect healthy occupancy levels mainly in developments catering to the middle-income resident. However, current developments will continue to face challenges with homebuyers and tenants having more bargaining power while negotiating terms and conditions, rental rates, and sale prices.

Performance

Residential - Abu Dhabi

Source: JLL

Residential rents and sale prices (% change)

Apartments

0

100

200

300

246 249 252 257 261 273261

1311

Uni

ts (t

hous

and)

2015 2017 2018 2020F 2021F2016

Current Supply

2019

Future supply

Villas

12 month outlook

12 month outlook

Sales

-1%Q-o-Q

Sales

-9%Y-o-Y

Rent

-1%Q-o-Q

Rent

-6%Y-o-Y

12 month outlook

12 month outlook

Sales

0%Q-o-Q

Sales

-2%Y-o-Y

Rent

-2%Q-o-Q

Rent

-4% Y-o-Y

With the delivery of a commercial building in Al Raha Beach, the total office stock in Abu Dhabi comes to approximately 3.8 million sq m GLA. Around 109,300 sq m of office GLA is scheduled for delivery in 2020, including the delivery of Grade A office building in Zayed City and other privately developed buildings in Al Raha Beach. As major corporates continue to consolidate, demand for office space remains focused on small fitted units, and serviced offices. However, Abu Dhabi Petroleum Exhibition and Conference (ADIPEC) event attracted international companies in the oil and gas sector with the discovery of new oil reserves in the emirate. Several companies were recently awarded ADNOC contracts enticing demand for office space, particularly across the Corniche close to ADNOC.

Demand for serviced office space in Abu Dhabi remained strong in 2019, as there was limited mutual appetite for capital expenditure from tenants and landlords.

Supply

Performance of the office market in Abu Dhabi continued to decline throughout 2019 as a result of subdued demand. Although rents for Grade A office space remained stable compared to last quarter, rents for Grade B declined by 5%. Headline rents for shell and core offices (exclusive of service charges) dropped 5% Y-o-Y to average AED 1,600 per sq m for Grade A, and AED 840 per sq m for Grade B respectively. Market conditions remain in favor of tenants, with landlords offering flexibility in lease rates and lease terms in order to retain existing and attract new tenants.

Vacancy rates continued to increase over the past year to average 28% and are expected to increase further, particularly within Grade B offices as major companies continue to consolidate. Looking ahead, we expect rental rates to continue to decline at a gradual pace in the face of new planned supply.

Performance

Office - Abu Dhabi

Source: JLL

0

1

2

3

4

3.3 3.5 3.5 3.7 3.8 3.93.8

0.110.13

GLA

(sq

m m

illio

n)

2015 2017 2018 2020F 2021F2016

Current Supply

2019

Future supply

Rents (AED / sq m / annum)

1,680

Q4 2018

1,600

Q4 2019

885

Q4 2018

840

Q4 2019

12 month outlook

12 month outlook

Grade A Grade B

Vacancy Rate

28%24%

Q4 2019

12 month outlook

Q4 2018

Source: JLL

The UAE Real Estate Market A Year In Review 2019 The UAE Real Estate Market A Year In Review 2019 1514

No significant deliveries took place in Q4 2019, keeping the total retail stock at 2.8 million sq m of GLA. Prominent planned developments to be completed by 2021 feature fresh concepts currently limited in the market. These includes technology enabled Reem Mall located on Al Reem Island, and a strip promenade waterfront concept with an array of entertainment concepts located in Bain Al Jesrain, Al Qana development.

With the retail market in Abu Dhabi dominated by a supply of older brick-and-mortar stores, retailers are resorting to pop-ups at various festivals and events across the Emirate. One such example was Al Hosn Festival, which featured innovative retail concepts with unique local and international brand presence. The aim of this is to attract shoppers to the retail stores within the malls.

The retail supply is expected to increase to approximately 3.2 million sq m by the end of 2021. However, as with all sectors, we remain cautious on the delivery of future projects within the specified timelines.

Supply

Abu Dhabi’s retail market continued on a downward trajectory as average retail rents declined by a range of 10-20% on an annual level but remained stable on a quarterly basis. Meanwhile, landlords continued to offer flexible incentives such as extended fit-out periods, break option clause, revenue share rents, and more. Additionally, they have adjusted their business plans with mall KPIs driven by various cost cutting initiatives rather than aggressive leasing strategies. Vacancy rates in major malls continued to increase by 8% over the year, primarily due to the vacant units in Galleria Mall extension that opened in Q3 2019. However, the older existing malls, mostly attain healthy occupancy levels.

Looking ahead, rents and vacancies are expected to remain under pressure in 2020, particularly on the back of the significant new supply due to enter the market. Retailers are resorting to innovative omni-channel networks to promote their stores by partnering with online delivery applications and offering internal web stores for local delivery across the Emirate.

Performance

Retail - Abu Dhabi

Source: JLL

Vacancy Rate

Average retail rents (% change)

Q4 2018

25%

Q4 2019

12 month outlook

-(10-20)%

Y-o-Y

17%

12 month outlook

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2.6 2.6 2.6 2.7 2.8 2.92.8

0.32

0.10

GLA

(sq

m m

illio

n)

2015 2017 2018 2020F 2021F2016

Current Supply

2019

Future supply

Source: STR Global

Abu Dhabi’s total stock of hotel keys remained stable at 30,100 keys at the end of 2019. Projects scheduled for delivery in 2020 include the serviced apartment development on Saadiyat Island, Park View, and Fairmont Marina Hotel and Serviced Apartment located on Corniche. By the end of 2021, hotel stock is expected to average 32,500, with most developments located on Yas Island near entertainment landmarks falling in the upper scale segment.

Along with government initiatives to promote tourism into the emirate, Abu Dhabi Development Holding Company (ADDH) has partnered with international tourism operator FTI Group with plans to launch a low-cost airline in Abu Dhabi, and introduce other initiatives focused on enhancing the tourism sector in the capital.

Supply

The hotel market in Abu Dhabi maintained healthy performance levels throughout the year on the back of strong government initiatives and events; notably the annual formula 1, UFC Showdown week, and more. As a result, occupancy levels increased to 73% in the YT November 2019, resulting in a 5% increase in average daily rates (ADR’s) from the same period last year, to register USD 117. In turn, revenue per available room (RevPar’s) increased by 8% to register USD 86.

Looking ahead, we expect the hotel sector to continue to perform strongly with the sustained government initiatives to enhance tourism and boost the economy away from non-oil GDP. VidCon, the world’s largest online video networking event, will be hosted in Abu Dhabi in Q1 2020 for the first-time following Viacom CBS Networks International partnership with the Department of Culture and Tourism (DCT). This may offer various networking opportunities for local and international content creators and attract entertainment enthusiasts to Abu Dhabi.

Performance

Hotel - Abu Dhabi

Source: JLL

Occupancy

ADR (USD)

YT November2018

73%

YT November2019

12 month outlook

71%

0

11

22

33

27 27 28 30 30 3130

11

Keys

(tho

usan

d)

2015 2017 2018 2020F 2021F2016

Current Supply

2019

Future supply

12 month outlook

111

YT November 2018

117

YT November 2019

Source: JLL

The UAE Real Estate Market A Year In Review 2019 The UAE Real Estate Market A Year In Review 2019 1716

Definitions

Definitions

12 O’clock

12 o’clock indicates a turning point towards a market consolidation / slowdown. At this position, the market has no further rental growth potential left in the current cycle,

with the next move likely to be downward.

9 O’clock

9 o’clock indicates the market has reached the rental growth peak. While rents may

continue to increase over coming quarters the market is heading towards a period of

rental stabilisation.

3 O’clock

3 o’clock indicates the market has reached its point of fastest decline. While rents may

continue to decline for some time, the rate of decrease is expected to slow as the market moves towards a period of rental

stabilisation.

6 O’clock

6 o’clock indicates a turning point towards rental growth. At this position, we believe

the market has reached its lowest point and the next movement in rents is likely to be

upwards.

Property Clock

Future Supply

JLL estimates of future supply is updated on a quarterly basis and is based on primary research (physical inspections) and secondary research (discussions with developers). The future supply is reflective of projects actively under construction. It excludes projects that have been announced, where ground works have not started. We remain cautious of the ability of some projects to meet their stated completion deadlines, with significant delays in project delivery leading to a low materialisation rate.

Office

Supply. The current supply of completed office GLA is based on a comprehensive list of office buildings in Dubai and Abu Dhabi that have been handed over for immediate occupation. This includes standalone office buildings and office space within mixed-use buildings. Our project list excludes government owned and wholly occupied buildings.

In Dubai the Central Business District (CBD) includes the Dubai International Financial Centre (DIFC), Downtown Dubai, Dubai Trade Centre District (DTCD) and Sheikh Zayed Road up until Interchange 1.

Performance. The weighted average rent (WAR) in Dubai and average rent in Abu Dhabi is based on estimates from the JLL Offices and Business Space team. It reflects the WAR across a basket of Grade A buildings in the CBD in Dubai and average rate across a basket of selected buildings defined as superior in the current market in Abu Dhabi.

Grade A buildings are defined as high quality office spaces, well located, with good access to infrastructure and amenities including F&B and retail.

The WAR and average rents of Grade A buildings represent the top open-market, net rent (exclusive of service charge and incentives) for a new lease that could be expected for a notional office unit.

Vacancy rate is based on estimates from the JLL Offices and Business Space team. It reflects the weighted average rate across a basket of buildings in the CBD in Dubai, that make up approximately 70% of the CBD supply and 13% of the total current supply. For Abu Dhabi, it reflects the average rate across all office buildings in the project list.

Residential

Supply. The current supply of completed residential buildings is based on a comprehensive list of residential units that have been handed over for immediate occupation. Our project list excludes labour accommodation. Our project list also excludes Emirati housing in Dubai. Our definition of residential units includes apartments, villas, and townhouses.

Performance. Data on residential performance in Dubai is based on the REIDIN monthly index. The REIDIN Residential Property Price Indices (RPPIs) uses a monthly sample of offered/asked listing prices and rental data and transactions data.

Q-o-Q data for Dubai, compares November 2019 vs September 2019 and Y-o-Y compares November 2018 vs November 2019.

Data on residential performance in Abu Dhabi is based on the asking prices and rents of a basket of selected developments.

Retail

Supply. The classification of retail centers is based on the Urban Land Institute (ULI) definition and based on their Gross Leasable Area (GLA):• Super Regional Malls have a GLA of

above 90,000 sq m • Regional Malls have a GLA of

30,000 - 90,000 sq m • Community Malls have a GLA of

10,000 - 30,000 sq m • Neighborhood Malls have a GLA of

3,000 - 10,000 sq m • Convenience Malls have a GLA of

less than 3,000 sq m

The current supply of completed retail GLA is based on a comprehensive list of mall-based retail in Dubai and Abu Dhabi that have been handed over for immediate occupation. Our project list excludes street retail and retail within mixed-use buildings.

Performance. Average rents are based on estimates from the JLL Retail team. It reflects the rents across a basket of retail centers.

Primary and Secondary retail centers are identified based on their turnover levels. Primary Malls are the best performing malls with highest levels of turnover. Secondary Malls are the average performing malls with lower levels of turnover.

Average rents represent the top open market net rent expected for a standard in line unit shop of 100 sq m in a basket of regional and super regional centers. Given the variation in rentals, we quote percentage change for retail rents rather than actual figures.

Vacancy rate is based on estimates from the JLL Retail team. It reflects the average rate across a basket of super regional and regional centers in Dubai and Abu Dhabi.

Hotels

Supply. The current supply of hotel rooms is based on data from the Dubai Tourism and Commerce Marketing (DTCM), Abu Dhabi Tourism and Culture Authority (ADTCA) and our quarterly surveys, reflecting hotel rooms that have been handed over for immediate occupation. Our project list includes all graded supply and includes serviced apartments.

Performance. STR performance data is based on a monthly survey conducted by STR Global on a sample of international standard midscale and upscale hotels. Average Daily Rates (ADR) and Revenue Per Available Room (Rev Par) are the key performance metrics.

The UAE Real Estate Market A Year In Review 2019 18

Cairo, Riyadh, Jeddah, Al Khobar, Johannesburg and Casablanca

With other MEA offices in:

COPYRIGHT © JONES LANG LASALLE IP, INC. 2020. This report has been prepared solely for information purposes and does not necessarily purport to be a complete analysis of the topics discussed, which are inherently unpredictable. It has been based on sources we believe to be reliable, but we have not independently verified those sources and we do not guarantee that the information in the report is accurate or complete. Any views expressed in the report reflect our judgment at this date and are subject to change without notice. Statements that are forward-looking involve known and unknown risks and uncertainties that may cause future realities to be materially different from those implied by such forward-looking statements. Advice we give to clients in particular situations may differ from the views expressed in this report. No investment or other business decisions should be made based solely on the views expressed in this report.

For questions and inquiries about the UAE real estate market, please contact:

Faraz AhmedResearch Manager, [email protected]

Peter StebbingsHead of Abu Dhabi [email protected]

Dana SalbakHead of Research, [email protected]

Dubai

Office 403, Building 1 Emaar Square Sheikh Zayed Road PO Box 214029, Dubai, UAETel: +971 4 426 6999Fax: +971 4 365 3260

Abu Dhabi

Abu Dhabi Trade Centre Building7th Floor, Office No. 3Tourist Club AreaPO Box 36788 Abu Dhabi, UAETel: +971 2 443 7772Fax: +971 2 443 7762

Sara AlameddineResearch Analyst, Abu [email protected]

Muhammad AijazSenior Research Analyst, [email protected]