This document provides a review of the Dubai real estate market in 2016 and an outlook for 2017. Some key points from 2016 include the opening of new infrastructure projects, hotels, malls, and attractions which boosted tourism. Residential and office prices remained flat or declined slightly while rents stabilized. The economy grew despite external factors like lower oil prices and Brexit. The outlook for 2017 predicts a soft recovery in residential prices in mid-range areas while office rents may continue to decline in oversupplied segments. Economic growth is expected to accelerate on continued tourism growth and new project openings.

1. Review 2016 - Outlook 2017
Dubai

2. Q4 2015 Q2 2016
VPI 98
SALE
+3.8%
-4.6%
-2.3%
-0.4%
AED 88680%
OCC
RENT
ADR
VPI 98
SALE
+0.1%
-1.1%
+2.8%
-4.8%
AED 46971%
OCC
RENT
ADR
Q4 2016
VPI 98*
SALE*
-1.7%
-0.3%
-0.0%
-5.0%
AED 65085%
OCC*
*estimated
RENT*
ADR*
2.68 million
international
guests registered
during first two
months of 2016,
up 3.5% YoY
Fifteen new
hotels announced
adding 4,086 keys
Launch of ICD
Brookfield Place
The Butterfly
DMC Completed
TOURISM
776 hotel and
serviced apartment
keys were added
11 new hotels
announced to add
3,028 keys by 2019
W Dubai at Habtoor
City and Rove Hotel
Downtown Dubai
opened
TOURISM
Dubai Opera
opened in
Downtown Dubai
IMG Worlds of
Adventure theme
park opened along
MBZ Road
TOURISM
LEGOLAND Dubai,
Bollywood and
Motion Gate theme
parks opened
Union Museum
opened
11km Boardwalk
at Palm Jumeirah
opened
TOURISM
New attractions:
Dubai Frame,
Madame
Tussauds,
Dubai Safari
Village,
Dubai Crocodile
Park
TOURISM
Italian themed
Dubai Outlet
Village opened
My City Center Al
Barsha opened
Mall of the World
project relocated
to MBZ Road
RETAIL
DLD drafts law to
regulate the
rental of retail,
commercial and
industrial asset
classes
LEGAL
85% Blue Waters
Island bridges
completed
830M Dubai Metro
passengers in 7
years
Dubai Mero Route
2020 to start
operating on May 20,
2020
INFRASTRUCTURE
Fire-damaged
Address Downtown
penthouse sold for
25M
6-bedroom
Emirates Hills
home offered for
20M
SALES
1,004 key The
Westin Dubai Al
Habtoor City soft
opening
Eid Al Fitr boosted
occupancy
HOTEL
Dubai GDP grew
4.1%
267B total value
of sales from
63,719 real
estate transac-
tions
23.4B total value
of off-plan
apartment and
villa sales
1.5M daily public
transport
passengers
Tourists topped
14.2M
54.7B total value
of real estate
transactions
26B total value of
ready property sales
3,646 cash and
2,540 mortgage
transactions for
ready properties
REVIEW 2015
SALES
Damac’s Aykon City
Dubai Properties’
Bella Casa - Serena
Azizi’s Royal Bay
Palm Jumeirah
Emaar’s Harbour
Views and Sidra
Villas
ValuStrat Price Index (VPI) Base; January 2014=100. All prices are quoted in UAE Dirhams unless otherwise stated.
LAUNCHES
TRANSACTIONS
OFFICE Plan to buy new
metro trains
DXB Concourse D
opens
Plan for new
highway to connect
Dubai with Abu
Dhabi and
Northern Emirates
INFRASTRUCTURE
16 lane Dubai
Canal flyover
opened
Wafi
interchange
opened
Multi-tier
four-lane
flyover in Al
Wasl opened
The Cityscape
exhibition saw major
projects announced
such as Emaar South
located in Dubai South,
Emaar’s Creek
Harbour residences,
Dubai Holding’s
Jumeirah Central, and
Palm 360 by Nakheel
Affordable off-plan
projects, Sunbeam and
The Pulse launched in
Dubai South
INFRASTRUCTURE
RESIDENTIAL
495,000 units
OFFICE
8,500,000 sq m GLA
HOTEL
101,000 keys
UK Brexit vote to
leave EU resulted in
fall of British Pound
and Euro against
US Dollar
Concerns of lower
real estate
investments
Fears of reduced
retail and tourist
spending by UK and
European citizens
ECONOMY
Investors not
registering their
units with DLD
face fines
LEGAL
MARKET
SENTIMENT
7.8% of projects
delayed by 2-3
years, 17%
delayed by 18
months to 2 years
2.5k units
launched from
nine off-plan
projects
60 units opened in
Ibn Battuta Mall
phase one extension
Nakheel Deira
Islands Mall to
become largest in
2020
RESIDENTIAL
DFM announced
new HQ in
Business Bay
World’s first 3D
printed office
opened near
Emirates Towers
OFFICE
57B total sales
from 26,122
investment
transactions by
149 nationalities
during H1 2016
TRANSACTIONS
RETAIL
DLD expected to
complete rental
star rating
system
by end-2017
for all buildings
completed
before 2010
Completion of
design phase and
majority of
infrastructure,
main construction
to begin
RESIDENTIAL
Noticeable
quarterly increase
in sales of
apartments priced
between 2M and
3M, and villas
priced between
5M and 6M
TRANSACTIONS
Dubai Customs
trade figures for
H1 2016 indicated
a 17% increase in
volume
ECONOMY
Real GDP growth
in the UAE is
forecast to
soften from an
estimated 3.8%
in 2015 to around
2.1% in 2016
ECONOMY
Cost of education
up by 6%
To look out for:
impact of USA
federal interest
rate rise,
currrency
fluctuations and
OPEC agrrement
on oil prices
ECONOMY
Dubai Water Canal
officially opened
62km Sheikh
Mohammed bin
Rashid Al Maktoum
Road opened
between Dubai and
Abu Dhabi
New interchange
easing traffic
between MBZ Road
and Al Yalayis Rd
Al Maktoum
International (DWC)
sees 602,228
passengers in 9
months
INFRASTRUCTURE
12-lane Shindagha
bridge connecting
the historic districts
of Al Shindagha and
Al Ras to begin
construction
INFRASTRUCTURE
Ibn Battuta mall
added 90 retail
and dining outlets
within the Dubai
Metro bridge
Planned First
Avenue mall in
Motor City to
include Carrefour
hypermarket as
key anchor
RETAIL
W Hotel Habtoor
City opened
The Palazzo
Versace Hotel in
Dubai opened
DTCM approved
1,805 holiday
homes
HOSPITALITY
Park Inn Radisson
and mall complex to
open in Motor City
RETAIL
New hotels due
in ‘17:
Holiday Inn
Festival City,
Waldorf Astoria
DIFC, Viceroy
Dubai, Bulgari
Resort &
Residences, Venu
Bluewaters Island
HOSPITALITY
New law allowing
mortgage of granted
land
DLD circular: All
property adverts must
be signed off by RERA
RERA updated rent
index
LEGAL
Mixed market sentiment,
while some investors call a
recovery in mid-affordable
locations, others feel it is
only due by end 2017
MARKET
SENTIMENT
UAE GDP expected to
accelerate to 3.4%
After the trough of ‘16, some
residential prices are expected
to witness a soft recovery
towards peak ’14. Rents
expected to stay flat, resulting in
slightly compressed yields
Sub-prime office space to
continue rental reductions,
while prices to remain flat
Increased competition from
short-term holiday homes
affecting serviced apartment
sector
Better hotel performance driven
by additional tourists seeking
newly opened attractions
OUTLOOK
REVIEW 2016
OUTLOOK 2017
2017
Q1 2016
VPI 98
SALE
-2.5%
-3.1%
-1.4%
+0.6%
AED 60985%
OCC
RENT
ADR
Q3 2016
VPI 98
SALE
+5.2%
+0.3%
-7.1%
-4.9%
AED 40172%
OCC
RENT
ADR