Residential
Hotel*
Rental
Growth
Slowing
Rents
Falling
Rental
Growth
Accelerating
Rents
Bottoming
Out
Retail
Office
Q1 2015
Retail
Rental
Growth
Slowing
Rental
Growth
Accelerating
Residential
Hotel*
Rents
Falling
Rents
Bottoming
Out
Office
* Hotel clock reflects the movement of RevPAR
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 recognise 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
Hot Topic
Future supply to constrain rents. The next couple of years are
expected to see more Grade A office space enter the market, as
the flight to quality remains the trend in Dubais office sector. In
addition to the handover of Central Park, an additional 900,000
sq m of office GLA is expected to enter the market over the next
9 months. In addition, the DIFC have announced a AED 200
million expansion plan which includes a commercial tower & new
retail space; Building 11 of Gate Village is expected to complete
in 2017. In 2018, ICD Brookfield are expected to deliver a USD 1
billion development, which includes a 50-storey office tower in
the DIFC. While this increases the number of Grade A offerings,
the excess supply is expected to exert downward pressure on
office rents, leaving the office market situated at the bottom of
the property cycle in the short-to-medium term.
Office Supply
Current Supply (20122015)
7.1M
sq m (GLA)
2012
7.4M
sq m (GLA)
7.6M
sq m (GLA)
2013
2014
7.7M
sq m (GLA)
Q1 2015
900K
sq m (GLA)
9M 2015
332K
200K
sq m (GLA)
sq m (GLA)
2016
2017
Office Performance
CBD Vacancy Rate
26%
23%
Q1 2014
Q1 2015
AED
1,860 1,880
1%
Q1 2014
Y-o-Y
Q1 2015
2015 / 2016
Outlook
2015 / 2016
Outlook
COPYRIGHT JONES LANG LASALLE IP, INC. 2015
Hot Topic
Increased focus on affordable housing. As Dubais residential
market moves towards a period of correction, the next driving
force is predicted to be end-users or middle-income earners, as
opposed to speculative buyers. The first quarter of the year saw
developer and government initiatives target the affordable
housing sector. On the development side, Nshama launched 2
phases of its Town Square project, Zahra & Hayat, consisting of
townhouses & apartments below AED 600 per sq ft, located
close to the Arabian Ranches. The Dubai Municipality has
proposed to introduce mandatory affordable housing quotas for
all new residential developments. In addition, it allocated over
100 hectares of land for affordable housing across various
locations in Dubai, targeting buyers and tenants with monthly
salaries of AED 3,000 AED 10,000.
Residential Supply
Current Supply (20122015)
356K
units
2012
366K
units
2013
377K
379K
units
units
2014
Q1 2015
22K
units
9M 2015
13K
10K
units
units
2016
2017
Residential
Residential Performance
Performance
Dubai Residential Property Rent and Sale Indices
Apartment
residential
Sales
Rentals
-2%
0%
Villa
residential
Rentals
7%
Source : REIDIN
9%
Y-o-Y
-1%
Rentals
0%
Q-o-Q
Q-o-Q
Sales
Sales
Source : REIDIN
Sales
Rentals
6%
2%
Y-o-Y
Hot Topic
Importance of Shopping Festival. According to statistics
issued by Visa, the total Visa card spend in the first 2 weeks of
Dubais Shopping Festival (DSF) 2015 increased 12% Y-o-Y to
reach USD 54 million. In terms of spending growth patterns,
restaurants witnessed the largest annual increase; 31%
compared to 2014 figures. Predictably, visitors from Saudi
Arabia emerged as the top spenders, contributing USD 35
million to the UAEs economy, and representing a 29% Y-o-Y
increase. Given the general stability in the sector, these figures
portray the significant impact the event has on Dubais retail
market.
Retail Supply
Current Supply (20122015)
2.8M
sq m (GLA)
2012
2.9M
sq m (GLA)
2.9M
2.9M
sq m (GLA)
sq m (GLA)
2014
Q1 2015
2013
194K
sq m (GLA)
9M 2015
373K
sq m (GLA)
219K
sq m (GLA)
2016
2017
Retail Performance
Vacancy Rate
10%
8%
Q1 2014
Q1 2015
Primary
AED
Secondary
2015 / 2016
Outlook
4,230
4,890
16%
Q1 2014
Q1 2015
Y-o-Y
1,885
2,180
16%
Q1 2014
Q1 2015
Y-o-Y
2015 / 2016
Outlook
COPYRIGHT JONES LANG LASALLE IP, INC. 2015
Hot Topic
Demand increasing at a slower rate. Dubais hotel market
welcomed 11.6 million guests in 2014, according to figures
released by the Dubai Tourism & Commerce Marketing. While
this represents a 6% Y-o-Y increase, the rate of growth has
declined from the 11% registered in 2013. The slowdown can be
attributed to a decline in the number of tourists from Russia and
the Eurozone. By contrast, tourist numbers from emerging
markets have increased significantly. Guests from South Asia,
Far East Asia and Africa increased 14%, 13% and 11%
respectively. This comes on the back of rising wealth and
changing consumer habits in emerging markets, in addition to
increased efforts to diversify Dubais inbound markets.
Hotel Supply
Current Supply (20122015)
57,000
keys
2012
60,200 64,400
keys
keys
2013
2014
64,900
keys
Q1 2015
3,600
keys
9M 2015
8,400
9,200
6,800
2016
2017
2018
keys
keys
keys
Hotel Performance
Average Daily Rate / Annual Change
Occupancy Rate
88%
86%
YT Feb
2014
YT Feb
2015
USD
273
-5%
YT Feb
2014
YT Feb
2015
Y-o-Y
2015/2016
Outlook
2015/2016
Outlook
Source : STR Global
286
Dubai
Emaar Square
Building 1, Office 403
Sheikh Zayed Road
PO Box 214029
Dubai, UAE
Tel: +971 4 426 6999
Fax: +971 4 365 3260
For questions and inquires about the Dubai real estate market, please contact:
Dana Williamson
Head of Agency
MENA
dana.williamson@eu.jll.com
Andrew Williamson
Head of Retail
MENA
andrew.williamson@eu.jll.com
Craig Plumb
Head of Research
MENA
craig.plumb@eu.jll.com
Dana Salbak
Senior Research Analyst
MENA
dana.salbak@eu.jll.com
@JLLMENA
youtube.com/joneslanglasalle
Chiheb Ben-Mahmoud
Head of Hotels & Hospitality
MEA
chiheb.ben-mahmoud@eu.jll.com
linkedin.com/companies/jll
joneslanglasalleblog.com/EMEAResearch
jll-mena.com
COPYRIGHT JONES LANG LASALLE IP, INC. 2015
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