The document summarizes real estate market trends in Dubai during the second quarter of 2015 based on a report by ValuStrat. Key points include: - Residential property values have declined from their 2014 peak and are now similar to early 2014 levels. Apartments values decreased 2.5% quarter-over-quarter while villa values fell 2.1%. - Office supply increased with 580,000 square meters expected to be delivered in 2015. However, office prices declined marginally by 0.3% year-over-year and 1% quarter-over-quarter. - Retail supply also grew with new malls and expansions, though leasing rates varied between 55-100

1. Dubai Real Estate Market
REVIEW: SECOND QUARTER 2015
www.valustrat.com

2. 1 | ValuStrat - Real Estate Research Report - Quarter 2, 2015 www.valustrat.com | 2
ValuStrat in the Media
- Dubai’s residential
values retreat to 2014 levels
Dubai’s residential property values have
shed most of the premium they had put on
at the peak of the upturn in June 2014, with
average prices now hovering to what they
were during January last year.
This is according to the newly created
ValuStrat Price Index, which also found that
the correction was most pronounced at JBR
and Downtown. The Palm also saw some of
this, the ValuStrat report adds.
- Lower prices, higher
yields: Right time to invest in Dubai
property?
Local consultancies such as ValuStrat have
revealed that time is right for renters in the
emirate to become homeowners as
equated monthly instalments fall below
their monthly rental outgo. However, one
thing has to be remembered that it is now
mandatory for a purchaser to put 25 per
cent as down payment for completed
properties.
- Marginal decline in
Dubai rents give advantage to Sharjah
tenants
“ There are no master-planned developments
in Sharjah. However, some of the towers
are very well-built with quality fit-out and
generous floor areas. Negatives include the
lack of parking and on-site amenities such
as gyms and swimming pools,” says Declan
King, Director and Group Head — Real Estate,
ValuStrat.
- Dubai Metro boosts
home values
In April, a ValuStrat study said
properties within a 10-minute walk of new
Dubai Metro stations proposed on the Red
Line extension are likely to see an uplift in
value even before the line becomes
operational. Once operational, prices could
rise by up to 15 percent compared to
similar homes located further from the
metro stations, the research intelligence
firm said.
- Properties near Dubai
metro cost a premium
ValuStrat’s research showed that studio
apartments near a metro station in JLT are
difficult to find and can command a price of
around Dh750,000 to Dh900,000, a far cry
from the studios in Jumeirah Village Circle
or Dubai Silicon Oasis which are being
offered for a little over Dh400,000.
”Prices for studio apartments within five to
ten minutes walking distance commanded
a premium of up to 20 per cent. You can
expect to pay an extra Dh150,000 for the
privilege,” said ValuStrat research manager
Haider Tuaima.
18 June 2015 17 June 2015
17 June 2015 10 June 2015
3 June 2015 19 May 2015
- Alternative Real
Estate Asset Classes
Many real estate investors in the UAE
automatically think of residential villas or
apartments when they consider buying
property. However, both at home and
abroad, there are a number of
alternative sub-classes within the real
estate sector that a buyer can consider
strategic.
27 May 2015
- The Big Picture
Real Estate strategist ValuStrat recently
compiled a report highlighting the
“substantial opportunity for investment in
affordable stock”, particularly family
apartments. Declan King, Director and
Group Head of Real Estate at ValuStrat, says
affordable housing presents a
“considerable investment opportunity” for
developers and investors due current
shortfall.

3. 3 | ValuStrat - Real Estate Research Report - Quarter 2, 2015 www.valustrat.com | 4
Q2 2015 - Real Estate
Indicators
MACRO-ECONOMIC SNAPSHOT
• Dubai’s GDP saw a year-on-year growth rate of 3.8% in 2014
• Hospitality and Construction contributed 5.1% and 7.6% respectively, to the GDP
• The fastest growing sectors were Transport, Storage and Communications at 8.6%
growth
• Dubai’s population as of June 2015 amounted to 2.38 Million
• The population growth rate was 5% in 2014 with an average household size of 4.4
individuals per household
• The Consumer Price Index (CPI) for
Dubai increased by 4.2% in June
when compared to last year
• Housing and DEWA expenses
continue to rise, albeit at a slower
pace than the last quarter
• The CPI growth rate has marginally
accelerated during the second
quarter
• April’s CPI month on month growth
rate was 0.23%, May 0.65% and
June’s CPI grew marginally by 0.02%
Source: Dubai Statistics Centre
Source: Dubai Statistics Centre
Source: DLD Real Estate Dashboard,
ValuStrat
Source: REIDIN, ValuStrat Source: REIDIN, ValuStrat
Source: REIDIN, ValuStrat Source: REIDIN, ValuStratSource: DLD Real Estate Dashboard,
ValuStrat
Source: Hotel News Now – STR
Global, ValuStrat
Source: Hotel News Now – STR
Global, ValuStrat
DUBAI POPULATION
CONSUMER PRICE INDEX VS HOUSING INDEX
JANUARY 2012 – JUNE 2015
Source: ValuStrat

4. 5 | ValuStrat - Real Estate Research Report - Quarter 2, 2015 www.valustrat.com | 6
ValuStrat Price Index -
Residential
Residential
• After an 11% YoY decline, residential
price declines are expected to
decelerate over the remainder of
2015
• Dubai apartment and villa markets
saw values decline by 2.5% and 2.1%
QoQ respectively
• The median value for apartments in
June was AED 14,250 per sq m (AED
1,324 per sq ft) and for villas was
AED 14,725 per sq m (AED 1,368 per
sq ft)
• Compared to Q1, apartments in
Business Bay saw an average value
decline of 6%, followed by a 4%
decline in International City, Dubai
Sports City and Discovery Gardens
• Villas in Arabian Ranches, Jumeirah
Park and Al Furjan saw an average
value decline of 3% when compared
to the last quarter
By tracking the values of a fixed basket of properties in 26 locations around Dubai, the
ValuStrat Price Index (VPI) has shown a steady decline in property values since the
peak during the second quarter last year. However, the rate of decline is easing and is
expected to continue to decelerate over the remainder of the year. April’s VPI registered
99.5 points, almost on par with January 2014, while May and June registered 98.9 and
98.4 points respectively.
RESIDENTIAL SUPPLY
• An expected supply of 26,100
apartments and 2,400 villas in
2015 will bring the total number of
residential units in Dubai to almost
half a million
• Residential projects with
approximately 3,000 units initially
scheduled for completion this year
are delayed and due for handover
during 2016
• 5,400 units were completed during
the first half of 2015
• A further 26,200 apartments and
2,300 villas to be completed in 2016
• 18 off-plan residential projects were
launched in Q2 adding 5,000 units to
the residential pipeline by 2019
RESIDENTIAL PRICES
• According to the DLD Real Estate
Dashboard, residential transaction
volume plummeted by 64% when
compared to Q1 2015, with a
marginally higher average ticket size
of AED 1.6 Million
• Average residential transaction
prices witnessed negative trend year
on year, declining by 12.7%
• When compared to the previous
quarter, average residential prices
dropped by 5.5%
• The median transacted apartment
price stands at AED 11,560 per sq m
(AED 1,074 per sq ft)
• The median transacted villa price
stands at AED 13,024 per sq m (AED
1,210 per sq ft)
Source: REIDIN, Lookup, ValuStrat
Source: REIDIN, ValuStrat
Source: ValuStrat
VALUSTRAT PRICE INDEX – DUBAI RESIDENTIAL SECTOR
[BASE: JAN 2014=100]
DUBAI AVERAGE RESIDENTIAL PRICE
PERFORMANCE
DUBAI RESIDENTIAL SUPPLY 2013-2016
(‘000 UNITS)

5. Office OFFICE SUPPLY
• 2015 began with an estimated 7.88
Million square meters (84.8 Million sq
ft) of office Gross Leasable Area (GLA)
• 580,000 sq m (6.2 Million sq ft) GLA is
expected to be delivered during 2015
and 550,000 sq m (5.9 Million sq ft)
during 2016
• One key completion this quarter was
The Binary by Omniyat, delivering 45,150
sq m (486,000 sq ft) of GLA in Business
Bay
OFFICE PRICES
• Office prices dipped by a marginal
0.3% year on year
• Negative growth of 1% seen during
this quarter when compared to the
previous quarter
• Average prices of shell and core
office space in Downtown Dubai
ranged from AED 20,450 – 25,830
per sq m (AED 1,900 – 2,400 per sq
ft)
• Average prices in Business Bay
ranged from AED 9,700 – 15,000 per
sq m (AED 900 – 1,400 per sq ft)
• TECOM & JLT average office prices
remained similar to last quarter
OFFICE RENTS
• YoY asking rents continue to see
double digit increase, currently
standing at 11.8%
• Quarter on quarter asking rents are
down by 3%
• The median asking rent for office
space is AED 1,184 per sq m (AED 110
per sq ft)
• DIFC saw the highest asking rents
of AED 2,500 per sq m (AED 232 per
sq ft)
Source: REIDIN, ValuStrat Source: REIDIN, ValuStrat
Source: REIDIN, ValuStrat
7 | ValuStrat - Real Estate Research Report - Quarter 2, 2015 www.valustrat.com | 8
RESIDENTIAL RENTS
• Residential asking rents dipped by
2.1% when compared to the same
period last year
• Overall residential asking rents
remained stable since the start of
2015
• Apartment asking rents saw a 2%
decrease since last year
• On average, apartment rents saw no
change during H1 2015
• Villa asking rents dipped by 3% YoY
and 1% QoQ
DUBAI AVERAGE RESIDENTIAL ASKING
RENT PERFORMANCE
Source: REIDIN, Lookup, ValuStrat
DUBAI OFFICE SUPPLY 2012-2016
(MILLION SQ M GLA)
DUBAI AVERAGE OFFICE PRICE PERFORMANCE
DUBAI AVERAGE OFFICE ASKING RENT
PERFORMANCE

6. RETAIL SUPPLY
• Downtown Dubai represents 15%
of the total retail mall GLA in
Dubai, this figure will grow due to
expansion work for Dubai Mall and
the announced extension within
Emaar’s recently announced
Downtown Views
• 100 out of 145 outlets were leased at
The Pointe by Nakheel
• 55% of The Nakheel Mall has been
reported as leased
• Nakheel launched additional 71,000
sq m (766,000 sq ft) of retail space at
Ibn Battuta Mall’s new extension
• Damac launched Vista Lux at Akoya
Oxygen
• Construction has begun on Gate
Village Building 11 at DIFC, adding
3,700 sq m (40,000 sq ft) of retail
space
HOTEL SUPPLY
• The total number of hotel rooms and
hotel apartments at the beginning of Q2
2015 stood at 94,217
• Before the end of the year, Dubai is
expected to cross the 100,000 hotel room
mark
• 1,557 hospitality units were added in Q2
• New hotel openings include Damac
Maison The Vogue and Pullman Dubai
Jumeirah Lake Towers
• Twenty four new hotels were announced
adding 7,220 keys to the pipeline in the
next 4 years
• Notable hotel announcements included
Four Seasons Hotel - DIFC, Studio M,
Holiday Inn DWC and Rixos The WalkHOTEL PERFORMANCE
• The average occupancy in Q2 was 75%
• April and May saw occupancy rates of 81.7% and 80% respectively, while in June the
occupancy rate fell to a record 63% low due to Ramadan
• With increasing new hotel room supply, the average Daily Rate (ADR) for April slipped 7%
YoY, May dropped by 12% YoY and in June by 10% YoY
• Further downward pressure on room rates is expected in the next quarter
RETAIL PERFORMANCE
• More global brands recently
entered Dubai’s retail market such
as Hollister, Cavalli Cafe and McQ
Alexander McQueen
• Average prime mall rents for
anchors and entertainment ranged
between AED 970 – 1,400 per sq m
(AED 90 – 130 per sq ft)
• Prime line shop rentals averaged
AED 6,700 per sq m (AED 622 per
sq ft)
Source: REIDIN, ValuStrat
9 | ValuStrat - Real Estate Research Report - Quarter 2, 2015 www.valustrat.com | 10
Retail Hospitality
Source: REIDIN, ValuStrat
Source: Hotel News Now – STR Global, ValuStrat
Source: Dubai Statistics Centre, ValuStrat
MALLS AND SHOPPING CENTRES IN DUBAI DUBAI HOTEL ROOM SUPPLY 2013 - 2015
(‘000 KEYS)
DUBAI HOTEL PERFORMANCEPRIME RETAIL MALL RENTS

7. Methodology
Every effort has been made to ensure the accuracy of this
document. New supply data covers 38 defined areas in
Dubai including non-freehold areas. Only completed and
under construction projects are included. The new supply
data does not include announced projects, and projects in
design phase. The new supply database does not take into
account most private building projects. Prices are calculated
from actual transactions that have been carefully cleansed
to exclude duplicates, bulk sales and outdated transactions.
Rental data is derived from a carefully cleansed database
of listings that don’t include duplicates, potential errors and
outliers.
The ValuStrat Price Index (VPI) for Dubai’s residential
sector is constructed to represent the monthly price change
experienced by typical freehold residential units within
Dubai. The VPI provides an up-to-date opinion of current
pricing. The VPI is a comprehensive weighted sample of all
property types across the city.
Copyright © ValuStrat Consulting FZCo. 2015
This document is the property of ValuStrat Consulting FZCo
and must not be reproduced or transmitted in any form or
by any means, without the prior written consent of ValuStrat
Consulting FZCo. We welcome your constructive feedback
and any corrections that may need to be made to this
document. ValuStrat Consulting FZCo does not accept any
liability in negligence or otherwise for any damage suffered
by any party resulting from reliance on this document.
ABOUT VALUSTRAT
ValuStrat is a leading consulting firm headquartered in Dubai providing
Advisory, Valuations, Research, Due Diligence and Divestment services across
a diverse range of industry sectors since 1977. Offices in UAE, Saudi Arabia
and Qatar serve over 750 corporate clients in the Middle East. Client base
includes financial institutions, local corporates, multinationals, governments,
SME’s, family businesses and start-ups. Some of the key sectors serviced
by ValuStrat’s consulting team include real estate, hospitality, healthcare,
education, manufacturing, retail, entertainment, transport and FMCG.
Declan King, MRICS
Director & Group Head of Real Estate
declan.king@valustrat.com
Haider Tuaima
Research Manager
haider.tuaima@valustrat.com
Saad Umerani
Chief Operating Officer
saad.mehmood@valustrat.com
Vismer Mulenga, MRICS
Associate Director
vismer.mulenga@valustrat.com
DUBAI
+971 4 326 2233
Dubai@valustrat.com
RIYADH
+ 966 11 293 5127
Riyadh@valustrat.com
JEDDAH
+ 966 12 2636249
Jeddah@valustrat.com
DOHA
+974 44968121
Doha@valustrat.com
ValuStrat is a firm regulated by RICS