Q Northern Emirates Real Estate Report

Transcription

1 Property Review Q Northern Emirates Real Estate Report asteco.com

2 Northern Emirates Q Highlights Residential rental rates have remained unchanged since Q for most of the Northern Emirates. Sharjah apartment rental rates saw minimal changes in Q3 2016, down by only 1%, especially for low to mid-quality properties. This was partly due to rental rates in Dubai stabilising, and therefore only a minimal number of relocations occurred from Dubai to the Northern Emirates. Ajman on the other hand recorded a minimal 1% uplift compared with the previous quarter. Rates in Ajman are now close to their 2008 peak levels (only 9% lower), which at the time had high rental rates. Ajman has however added better quality supply to its stock whilst at the same time improving its overall offering to Residents, in terms of retail and road connectivity, these rates appear sustainable whilst still offering value for money. In comparison, average rents in Sharjah are still 38% cheaper than in 2008, as additional supply keeps rates from increasing rapidly. Index Base 100 = Sep APARTMENT RENTAL MOVEMENT, SEP 2008 = BASE 100 GROWTH RECESSION RECOVERY STABILISATION Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Sharjah Ajman Ras Al Khaimah Fujairah Umm Al Quwain APARTMENT ANNUAL RENTAL GROWTH Northern Emirates Apartment rental rates were stable since Q

3 Northern Emirates Rental Rates Q Q Report Northern Emirates Sharjah and Ajman New residential supply was announced in Sharjah by Al Thuriah who launched Sahara Tower 6 during Cityscape Global in September The residential tower is part of the Sahara Complex, which is a master development with a built up area of 3.1 million square feet including 1,348 apartments. According to the Developer, the construction of the twin tower project has already started and will feature 376 residential units, which are now on sale and handover is expected Q According to the Sharjah Real Estate Registration Department the total value of Real Estate investments completed during H amounted to AED 12.1 billion and a total of 1,860 sales transactions recorded. The large majority (89.5%) were concluded in Sharjah s city areas such as Al Khan (240 transactions), Al Majaz 3 (173), Sajaa Industrial Area (159), Al Nahda (111), and Muwaileh Commercial District (105). The remaining 877 transactions occurred in other areas of the Emirate. Demand levels for office space in Sharjah remained stagnant over the quarter with limited new supply entering the city. As a result, rental rates remained unchanged over Q The retail sector has started developing rapidly in Sharjah and Ajman as population levels support such expansions. For instance, new food and beverage outlets opened this quarter at the Al Majaz Waterfront and the Corniche areas in Sharjah, whereas the expansion of Ajman City Centre mall to nearly double its current size to 52,000 square metres is anticipated to complete by the end of Q SHARJAH APARTMENT RENTAL RATES Studio 1BR 2BR 3BR Apartment Rental Rates (AED 000 s pa) Min Max Min Max Min Max Min Max Al Majaz Al Qasimiya Al Nahda Al Khan (Al Mamzar) Abu Shagara Al Yarmook Corniche Mina Road Zero 6 Mall in Juraina 2, Sharjah, is also expected to open in Q with a net leasable area of 16,000 square metres and car parking for 490 vehicles. SHARJAH APARTMENT RENTAL RATES MOVEMENT BY AREA Al Majaz 2% 2% Al Qasimiya -8% -3% OFFICE RENTAL RATES AED per ft 2 pa 12% Al Nahda Al Khan (Al Mamzar) Abu Shagara Al Yarmook Corinche -9% -7% -6% -4% -2% 1% 1% 2% 11% Al Taawun Road Corniche Area Al Wahda Street Mina Road Al Qasimiya Clock R/A Al Yarmook Industrial Area Mina Road -1-8% -6% -4% -2% 2% 4% 6% 8% 1 12% Min Max % Change (Q2 - Q3 2016) % Change (Q Q3 2016) % Change (Q2 - Q3 2016) % Change (Q Q3 2016) 3

4 Northern Emirates Rental Rates Q Fujairah and Ras Al Khaimah The Fujairah Real Estate market remained stable over the quarter with rental rates remaining unchanged. New residential supply such as the Fujairah housing project in Al Taween, which is now 95% completed, is expected to be handed over during Q The development is reserved for UAE Nationals and comprises three bedroom villas. Furthermore, Fujairah s cultural centre has reached 55% completion and is expected to be handed over in Q Due to constant support from the government and proactive development and marketing strategies, Ras Al Khaimah recorded significant growth in the tourism and hospitality sectors over the past three years as several new hotels started their operations. The emirate currently has 3,600 hotel rooms, and its occupancy rate has risen to 71% with more than 4 of guests from the UAE. Furthermore, the RAK Freezone, popular with many small and medium-sized businesses, has created both residential and office demand. One of the key tourism projects in Ras Al Khaimah is the Al Marjan Island. The development currently has three hotels, namely Rixos Bab Al Bahr, Double Tree by Hilton, and Marjan Island Resort and Spa totalling close to 1,500 hotel rooms. The entire development is set for completion in 2025, and is expected to have about 8,000 hotel rooms in total. Another major development on the Marjan Island is by the Bin Haider Group, which was also announced at this year s Cityscape. The planned development will spread over an area of 1.4 million square feet and will comprise a five-star luxury hotel, residential apartments, and commercial buildings along with retail space. Plot prices on Marjan Island have increased by close to 2 this year with further increases expected due to a shortage of beachfront properties. NORTHERN EMIRATES APARTMENT RENTAL RATES Studio 1BR 2BR 3BR Apartment Rental Rates (AED 000 s pa) Min Max Min Max Min Max Min Max Ajman Typical Ajman High End Fujairah Typical Fujairah High End Sharjah Typical Sharjah New RAK Typical RAK New Umm Al Quwain NORTHERN EMIRATES APARTMENT RENTAL RATES MOVEMENT BY AREA -1% Ajman Typical 3% Ajman High End Fujairah Typical -1% Fujairah High End -1% Sharjah Typical Sharjah New 1% -2% RAK Typical 1% 1% RAK New 2% Umm Al Quwain -3% -2% -1% 1% 2% 3% 4% % Change (Q2 - Q3 2016) % Change (Q Q3 2016) 4

5 Northern Emirates Area Map Arabian Gulf Q Report Northern Emirates UNITED ARAB EMIRATES UMM AL QUWAIN AJMAN SHARJAH DUBAI RAS AL KHAIMAH FUJAIRAH SHARJAH 1 Abu Shagara 2 Al Khan 3 Al Majaz 4 Al Nahda 5 Al Qasimiyah 6 Al Taawun 7 Al Wahda 8 Corniche / Buhaira 9 Khaledia 10 King Faisal and King Abdul Aziz Streets 5 10 ABU DHABI RAS AL KHAIMAH Mina Al Arab 1 Mina Al Arab 2 Marjan Island 3 Al Hamra Marjan Island Al Hamra

6 Global Outlook Q United Arab Emirates Highlights Forecast Overview GDP to grow by 2.3% this year The UAE is one of the most diversified economies in the Gulf, but oil price developments are still key to the outlook. The oil and gas sector, which makes up around one third of the economy, is expected to rise by 1% in 2016 after growing 5% last year, influenced by: Change in OPEC policy unlikely we expect no meaningful agreement to freeze or cut production at OPEC s informal meeting in September, so UAE oil output should remain high in keeping with the policy to maintain market share. We expect the oil price to average $43.6 pb in 2016 and $50 pb next year. Oil output limited by capacity production in the UAE reached a record level of 3.07 mbpd in August, based on IEA numbers. After a 4.4% increase in production last year, we expect only a 1% rise this year as spare capacity remains limited. Who we are Oxford Economics Oxford Economics was founded in 1981 as a commercial venture with Oxford University s business college to provide economic forecasting and modeling to UK companies and financial institutions expanding abroad. Since then, we have become one of the world s foremost independent global advisory firms, providing reports, forecasts and analytical tools on 200 countries, 100 industrial sectors and over 3,000 cities. Our best-of-class global economic and industry models and analytical tools give us an unparalleled ability to forecast external market trends and assess their economic, social and business impact. Headquartered in Oxford, England, with regional centres in London, New York, and Singapore, Oxford Economics has offices across the globe in Belfast, Chicago, Dubai, Mexico City, Miami, Milan, Paarl - South Africa, Paris, Philadelphia, San Francisco, and Washington DC. We employ over 200 full-time people, including more than 120 professional economists, industry experts and business editors one of the largest teams of macro economists and thought leadership specialists. To find out more and request your free trial please contact Paul de Cintra on pdecintra@oxfordeconomics.com 6

7 Global Outlook Q with non-oil growth slowing to 2.9% Medium-term outlook more encouraging Indicators show that while growth has slowed, recession should be avoided this year. The PMI, a signal of non-oil activity, remained in expansionary territory at 54.7 in August, with growth in both output and new orders still robust. We forecast non-oil GDP growth slowing to 2.9% in 2016, with total GDP growth at 2.3%. Low oil prices tighten liquidity domestic liquidity conditions have tightened since 2014, with low oil prices feeding through to lower government spending, interest rates rising gradually in line with the US, and a need to finance the large budget deficit. Mixed price pressures for consumers headline inflation remained broadly unchaged at 1.8% in July, and we forecast a yearly average of 2% in Measures to support the fiscal balance the government has slowed outlays on non-essential projects, removed some energy subsidies and a region-wide VAT is expected from Over , non-oil growth is seen picking-up to 3.2% per year, slightly faster than in most of its neighbours. An improvement in economic sentiment and gradual rise in oil prices will help to boost growth. This will be aided by: Diversification strategy the UAE aims to transition to a knowledge based economy by 2021, with oil GDP contributing 2 to total GDP (currently 3). Business hub status and Expo 2020 will support investment the UAE ranks highly for its ease of doing business and openness to investment and trade, which will support investment. Rising business confidence the IMF suggests that efforts should be made to improve the business environment, ease restrictions on FDI and spur competition. The imminent approval of the bankruptcy law, improving access to finance and broadening the credit bureau s coverage, should all help improve business confidence. UAE: REAL GDP GROWTH UAE: INFLATION % Year % Year F cast 12 F cast Middle East and North Africa UAE Source: Oxford Economics Middle East and North Africa UAE Source: Oxford Economics 7

8 VALUATION & ADVISORY Our professional advisory services are conducted by suitably qualified personnel all of whom have had extensive Real Estate experience within the Middle East and internationally. Our valuations are carried out in accordance with the Royal Institution of Chartered Surveyors (RICS) and International Valuation Standards (IVS) and are undertaken by appropriately qualified valuers with extensive local experience. The Professional Services Asteco conducts throughout the region include: The Middle East s largest full service Real Estate services company, Asteco was formed in Dubai in Over the years, Asteco has gained enormous respect for consistently delivering high quality, professional, value-added services in a transparent manner. It is also widely recognised for its involvement with many of the projects that have defined the landscape and physical infrastructure of the Emirates. Asteco has an essential combination of local knowledge and international expertise. A deeply established brand, renowned for its application of the latest technological advances, its commitment to transparency, winning strategies and human expertise. Undisputed Real Estate experts, Asteco represents a significant number of the region s top property Owners, Developers and Investors. Consultancy and Advisory Services Market Research Valuation Services SALES Asteco has established a large regional property sales division with representatives based in the UAE, Qatar and Jordan. Our Sales teams have extensive experience in the negotiation and sale of a variety of assets. LEASING Asteco has been instrumental in the Leasing of many high-profile developments across the GCC. ASSET MANAGEMENT Asteco provides comprehensive Asset Management services to all property Owners, whether a single unit (IPM) or a regional mixed-use portfolio. Our focus is on maximising value for our Clients. OWNERS ASSOCIATION Asteco has the experience, systems, procedures and manuals in place to provide streamlined comprehensive Association Management and Consultancy Services to residential, commercial and mixed-use communities throughout the GCC Region. SALES MANAGEMENT Our Sales Management services are comprehensive and encompass everything required for the successful completion and handover of units to individual unit Owners. LICENSING Our brand, network, system and procedures are now available in territories across the MENA region. Our Licensing services currently include Real Estate Brokerage Franchising and associated support services with many of the key elements designed specifically around the franchisee, making it a truly unique and bespoke franchise opportunity. 8

9 John Stevens, BSc MRICS Managing Director/Director, Asset Services John Allen, BSc MRICS Director, Valuation & Advisory Julia Knibbs, MSc Associate Director, Research & Advisory (UAE) Zahra Alvi, MSc Research Analyst

10 Xxx Property Review Q Northern Emirates Real Estate Report DISCLAIMER: The information contained in this report has been obtained from and is based upon sources that Asteco Property Management believes to be reliable, however, no warranty or representation, expressed or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. Asteco Property Management will not be held responsible for any third-party contributions. All opinions and estimates included in this report constitute Asteco Property Management s judgment, as of the date of this report and are subject to change without notice. Figures contained in this report are derived from a basket of locations highlighted in this report and therefore represent a snapshot of the Dubai market. Due care and attention has been used in the preparation of forecast information. However, actual results may vary from forecasts and any variation may be materially positive or negative. Forecasts, by their very nature, involve risk and uncertainty because they relate to future events and circumstances which are beyond Asteco Property Management s control. For a full in-depth study of the market, please contact Asteco Property Management s research team. Asteco Property Management LLC. Commercial License No Paid-up Capital AED 4,000, /astrep828