gcc real estate quarterly 2q13 - amazon web...

Global Research

Sector - Real Estate

September 2013

GCC Real Estate Quarterly – 2Q13

Markets continue its uptrend in 2Q13

UAE and Saudi remain the most buoyant markets in 2013

Demand to remain strong particularly for high-quality properties

Bahrain

Bahrain’s office and residential rental markets showed signs of recovery in 2Q13. However,

rise in demand remained restricted to high quality properties. The office and residential

markets witnessed improved demand, which is expected to translate into higher rents in the

next quarter. The residential sales market turned buoyant during the quarter, with many

Bahrainis purchasing property for investment purposes.

Kuwait

Overall traded value of real estate properties grew 36.8%QoQ and 15.9% YoY to

KWD1,048.5mn in 2Q13, mainly aided by government spending and improving market

sentiments. However, the market witnessed a 13.1%YoY fall in transactions, indicating a

decline in demand due to rising prices of land and, thereby, properties.

Oman

The real estate market has continued to recover in 2Q13, primarily driven by the residential

and retail segments. The segments witnessed increased demand during the quarter due to

improvements in the economy and consumer confidence. The office market showed signs of

stabilization, as rates remained unchanged over the last two quarters.

Qatar

Qatar’s real estate market remained buoyant in 2Q13. The residential market continued to

pick up due to an undersupply situation. Residential sales transactions also reached a multi-

year high; however, sales prices remained unchanged. On the other hand, office rentals

remained unchanged and we expect the trend to continue due to existing oversupply.

Saudi Arabia

Saudi Arabia’s real estate market showed signs of growth across markets in 2Q13 after

posting a mixed performance in 1Q13. Housing and hospitality segments remained upbeat,

driven by strong government expenditure. However, Riyadh’s office market continues to be a

concern due to the oversupply situation. While the housing and hospitality segments are

expected to maintain the uptrend, the office segment could come under pressure due to new

stock of supply in the medium term.

UAE

UAE’s real estate market remains on the path to recovery, with robust growth in rentals and

sales prices across the markets of Dubai and Abu Dhabi. Prices increased 12%YoY in

Dubai’s residential rental market, while Abu Dhabi’s market saw prices rise 10%YoY. In the

hospitality segment, Dubai’s occupancy levels increased 2 percentage points to 85% in

2Q13, while those of Abu Dhabi rose 8 percentage points to 70%. Office rentals rose up to

8%QoQ in Dubai, while Abu Dhabi saw rates stabilizing during the quarter. Strong economic

fundamentals and improving market sentiments continue to drive the real estate market in

the country.

GC

C R

eal E

sta

te 2

Q1

3

Faisal Hasan, CFA

Head of Research [email protected] Tel: (965) 2295-1270 Hettish Karmani

Manager [email protected] Tel: (965) 2295-1281 Global Investment House www.globalinv.net

Global Research - GCC GCC Real Estate Quarterly

September - 2013 2

Bahrain Real Estate Sector

Latest Developments

Nama International Real Estate announced the launch of its USD300mn Bahrain Bay project in Manama.

Bahrain's Municipalities and Urban Planning Affairs Ministry announced plans to implement public projects

worth BHD63mn across the kingdom until 2014. The projects would comprise central and traditional markets,

walkways, parks, and shopping complexes.

Durrat Marina entered into a memorandum of understanding (MoU) with CIRCO for sale and marketing of

villas, apartments, and retail space in the Durrat Marina project.

Seef Properties announced a 3.3% YoY rise in net profit to BHD3.3mn in 1H13 from BHD3.2mn in 1H12.

Market Performance

Bahrain’s real estate market has shown signs of stability in 2Q13 and is poised make a recovery going forward.

Overall market sentiment continued to improve owing to recovering economic growth. Rents in Bahrain’s office

rental market stabilized in 2Q13, after witnessing a decline in the previous years. However, vacancy rates continued

to vary substantially across markets. Parking facilities and access remain top priorities for tenants. As a result, the

Diplomatic Area continued to suffer more compared to the Seef Area. The market has also witnessed a new trend of

tenants’ preference for international property management, and properties with such facilities generated investor

interest during 2Q13. We expect rental rates to go up in the next quarter, mainly for quality properties as we see

demand picking up gradually.

The residential rental market has seen improvement in demand in 2Q13, mainly in the areas of Reef and Amwaj

Islands, driven by the expatriate population. Demand continues to improve in these areas due to easy access to

Manama and Saudi Arabia. In contrast, demand for houses in traditionally popular locations of Saar and Budiyaa

continued to weaken. Similarly, the residential sales market also witnessed an improved activity, with sales prices

going up. It has been noted that demand is driven mainly by Bahrainis. We believe majority of these purchases are

for investment purposes. We expect this trend to continue throughout 2013, and thus expect an uptick in sales

prices.

Office Market Rental Rates Residential Market Rental Rates

Source: CBRE Source: CBRE

10.0

8.5 8.0 8.0

-

2.0

4.0

6.0

8.0

10.0

12.0

2Q10 2Q11 2Q12 2Q13

BH

D/s

qm

/pm

Office Rent Seef (fitted-out space)

675 625

600 600

-

200

400

600

800

2Q10 2Q11 2Q12 2Q13

BH

D/U

nit/m

onth

2 Bedroom Apartment Juffair


September – 2013 3

Segments Outlook

Office

Prime office monthly rent in the Seef area remained unchanged at BHD8/sqm in 2Q13.

The market is expected to gain stability, aided by economic growth and political stability.

Residential - Rental

Monthly rents for two-bedroom apartments at Juffair stood at BHD600 per unit in 2Q13.

Rentals are expected to remain stable in Juffair, Reef and Amwaj Island areas, with high quality properties and rising expatriate population.

Industrial - Rental

Rentals remained unchanged in the range of BHD2–3.5/sqm.

Prices are expected to trend up due to current undersupply in the market.



Kuwait Real Estate Sector

Latest Developments

Kuwaiti municipal authorities recently asked investors to obtain a special permit for the partition of plots in

housing districts or else they could be penalized and deprived of electricity.

A joint venture led by Kuwait's Associated Construction has entered into an agreement with the National

Bank of Kuwait to fund the KWD98mn Al Amiri Hospital expansion project.

M A Kharafi and Sons was awarded USD930mn in damages through arbitration proceedings for the

cancellation of the construction of a vacation resort in Libya.

Market Performance

The overall value of transactions grew 36.8%QoQ and 15.9%YoY to KWD1,048.5mn in 2Q13. The overall rise is

ascribed to increased government spending and improving market sentiments. Meanwhile, the volume of

transactions also rose 30.4%QoQ, but declined 13.1%YoY. This indicates that rising prices of land and, thereby,

properties have pushed up the value of transactions while reducing demand. If this situation persists, the volume

could fall further along with a decline in the transaction value, which remains a key cause of concern.

The residential segment remained the biggest contributor (47.7%) to overall transactions by value in 2Q13, down

from 51.6% in 2Q12. In 2Q13, the number of transactions in the residential segment fell 24.4%YoY, while the value

of transactions increased 7.1%YoY.

The investment segment remained the second-largest contributor (33.5%) to overall transactions by value, down

from 41.1% in 2Q12. During the quarter, the value of transactions in the segment fell 5.4%YoY, while the volume of

transactions rose 17.5%YoY.

The commercial segment recovered in 2Q13, contributing 15.2% to the overall transactions by value. The value of

transactions rose 141.1%YoY, while the volume of transactions increased 537.5%YoY.

Average residential land prices Breakdown of transactions by segement (2Q13)

Source: Industry Sources Source: Ministry of Justice

300

500

700

900

Capital Hawalli Farwaniyah Ahmadi Jahraa

KW

D/s

qm

4Q12 1Q13

Residential, 47.7%

Investment, 33.5%

Commercial, 15.2%

Other, 3.5%



Segments Outlook

Land Sales

Average land sales price increased 18.2%QoQ to KWD699/sqm in 1Q13.

Prices are expected to have increased in 2Q13; however rising prices are expected to result in low demand going forward.

Residential – Rental

Occupancy rates were stable at 90–95% during 1Q13.

Average apartment rents increased by almost 2-7%QoQ for 2bedroom apartments

Average rents for 3bedroom apartments remained nearly unchanged.

The market is expected to have seen an uptrend during 2Q13 which began in 1Q13; existing undersupply in the market may lead to higher prices in the coming quarter.

Commercial – Property Sales

Average value per transaction for property sales declined 9%QoQ in 1Q13.

Oversupply in the segment remains a concern and may keep prices stagnant in the coming quarter.



Oman Real Estate Sector

Latest Developments

Oman-based Alargan Towell Investment Co. (Alargan) entered into an agreement with the Oman Arab Bank

to provide housing loan services to customers for all of Alargan’s projects in Oman.

DSA Architects International has been awarded the contract for the design of Saraya Bandar Jissah's

boutique hotel in Oman.

The Wave announced the commencement of the construction of Siraj and Reehan Gardens, which comprise

143 apartments and villas.

Muttawar Omani Co. launched a USD97.4mn residential project, which would be jointly developed with

Global Omani Development and Investment Co.

Market Performance

Oman’s office market continues to show signs of stabilization, as rates remained unchanged in 2Q13. However, the

oversupply of mid- to low-quality properties persists. As a result, we expect rental rates for mid- to low-quality office

space to trend downward in the coming months. On the other hand, demand for high quality office space remained

strong, mainly led by small and fully furnished spaces (within 100–250sqm) in prime areas. The market has

witnessed some recent projects targeted toward meeting the demand for high quality office space. Thus, the rates

for prime quality spaces would remain stable going forward.

The residential market continued to see increased demand in 2Q13, aided by improvements in economic

performance and consumer sentiment in the country. The launch of various projects, such as the Phase 2 of Muscat

Hills and The Wave Marsa 2, clearly reflects the rise in demand. The uptrend in volume of transactions and rental

rates continued during the quarter. Moreover, cheaper mortgage options and access to Islamic finance for buying

properties continue to drive growth in the segment.

The retail market remained on its recovery path, primarily due to an overall improvement in the economy.

Consequently, the market saw renewed interest among retailers, with the Oman Shopping Mall already set for an

expansion worth USD129mn to add 100 new outlets.



Segments Outlook

Office - Rental

Monthly office rents are expected to remain stable around OMR7–9/sqm.

Rental rates for high quality properties to remain stable, while those for lower grade stock are expected to decline


Monthly rents for two-bedroom apartments are likely to remain around OMR400–850/sqm.

Monthly rents for four-bedroom villas are expected to remain around OMR1,000–1,600/sqm.

Rental rates are anticipated to increase with a rise in consumer confidence and availability of better mortgage options.



Qatar Real Estate Sector

Latest Developments

Qatar awarded a USD86.4mn contract to UK-based Balfour Beatty for the construction of highways in the

country.

Ezdan Holding announced it is set to open its QAR1.5bn residential complex before the end of 2013.

Century 21 Qatar announced a multi-billion riyal mixed-use project with 80,000 residential units for low-

income expats. The first phase of the project is scheduled to be operational during 3Q13.

Barwa Commercial Avenue project is ready to open the first office by 3Q13.

Qatar's Municipality and Urban Planning Ministry allocated 900 plots for the construction of houses for

workers.

Market Performance

The office rental market remained unchanged in 2Q13, with rentals unchanged from 1Q13. Demand for part-floor

leasing options, including separate utilities, services and parking facilities, remained buoyant. Also, demand for

fitted office spaces (500 sq m) continued to be strong. Furthermore, demand for high quality properties remained on

an uptrend during the quarter. However, the current oversupply situation is expected to keep rental growth muted in

the next quarter.

The residential rental market improved in 2Q13 after remaining stagnant in 1Q13. This was driven by an

undersupply situation, mainly in Pearl Qatar and West Bay areas. Rental rates in Pearl Qatar rose 7%YoY.

Similarly, demand for serviced apartments increased due to undersupply, and rise in exhibitions and conferences.

Residential sales transactions reached a multi-year high during 2Q13, driven by higher purchases of freehold

properties in prime areas such as Pearl Qatar. Despite a rise in transactions, sales prices remained mostly

unchanged from 1Q13.

Average 2 BR Apartment Rental Rates Average Office Rental Rates

Source: ASTECO & Global Research, *Estimated Source: ASTECO & Global Research, *Estimated

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

Al Sadd Najma Bin

Mahmoud

Bin Omran Pearl

Qatar

QA

R/m

on

th

1Q13 2Q13*

0

20

40

60

80

100

120

140

160

180

200

West Bay A Ring

Road

C Ring

Road

D Ring

Road

Old Doha Airport

Road

QA

R/s

qm

/pa

1Q13 2Q13*



Segments Outlook

Office - Rental

Monthly rental rates remained flat (QAR105–195/sqm) in 2Q13

Rising supply of new stock is expected to counter the rise in demand, thus exerting pressure on rental growth.


Monthly rental rates for apartments were in the range of : - 1 and 2 bedrooms – QAR9,000–16,000/month - 3 bedrooms – up to QAR19,000/month

The current undersupply situation is likely to reverse with the supply of new stock during the year that, in turn, would restrict rental growth.

Residential - Sales

Transaction value surged to a multi-year high

Average direct sales prices increased to QAR15,000–16,000/sqm

Average resale values totaled QAR12,000–15,000/sqm

2013 is expected to remain muted with incoming supply of new stock; however, some pockets, especially Pearl-Qatar, may witness marginal growth in prices with the launch of new retail properties.



Saudi Arabia Real Estate Sector

Latest Developments

Jeddah Development and Urban Regeneration Co announced plans to build 67,000 housing units in two new

residential districts to be located in the eastern and northern periphery of Jeddah.

The Saudi housing ministry signed a SR1.06bn contract for the first housing project in Riyadh to build 7,000

housing units along with schools, community centers, roads, and parks.

The Saudi government has budgeted almost SAR16bn for the 513 infrastructure and service projects in the

Taif governorate and affiliated provinces.

The Saudi government cancelled the contract to develop the USD30bn Jizan Economic City through a joint

venture between Saudi Binladin Group and Malaysia-based MMC Corp.

The governor of Madinah announced plans to develop a new pilgrim city to be built on an area of 1.6million

sqm along Hijrah Road to accommodate 200,000 visitors that travel to the city for Haj and Umrah.

Fawaz Abdulaziz Alhokair Co raised Shari'ah-compliant financing facilities worth SAR4.6bn (USD1.2bn) to

fund real estate projects.

The first phase of the low-cost housing project of Makkah Oasis was completed and would be handed over

to 500 families.

Market Performance

The office rental market continued its mixed performance from 1Q13 to 2Q13; Jeddah’s market remained upbeat,

while Riyadh’s market deteriorated further. Average prime office rent in Jeddah remained stable at the level of

SAR1,500/sqm/pa; whereas on a YoY basis, rents grew 3.4% during the quarter. Stability in rents was impacted by

a decline in vacancy rate, which stood at 16% at the end of 2Q13 compared to 21% at the start of 2013. Jeddah’s

market continues to witness improved interest from the government and private sectors and thus we expect

vacancy rates to decline going forward. Conversely, in Riyadh’s market, prime rents declined 2.6%QoQ and

7.5%YoY to the level of SAR1,850/sqm/pa. The current oversupply situation continues to boost the vacancy rate

that was at 18% by the end of 2Q13, up from14% a year earlier. Going forward, the major concern for both markets

remains the supply of new stock that could significantly hurt rental prices.

The residential sales market in Saudi Arabia maintained its uptrend in 2Q13. In Jeddah, villa prices increased

around 2%QoQ to the level of almost SAR4,650/sqm; the Western districts maintained their dominance with prices

near the level of SAR6,600/sqm. Meanwhile, apartment prices started showing signs of stability as prices remain at

the level of SAR4,150/sqm. On the other hand, Riyadh’s market saw prices of villas and apartments rising during

2Q13. Average villa prices rose around 2%QoQ to the level of SAR4,300/sqm, whereas the average price for

apartments grew almost 4%QoQ to SAR2,860/sqm. An emerging trend witnessed during 2013 is new supply from

individual and small-scale projects; we expect this trend to continue.

Similar to the sales market, the residential rental market also continued its robust performance. The market in

Riyadh witnessed growth of 8%QoQ in villa rents and 6%QoQ in apartment rents. Jeddah’s market saw villa rents

rise almost 4%QoQ, whereas apartment rents remained mostly stable.

In the hospitality segment, Jeddah maintained its strong performance, while Riyadh showed signs of stability. In

Jeddah, ADR will have increased around 9%YoY to USD235 in 2Q13, with occupancy levels expected to have

reached 80%. In Riyadh, ADR is expected to have declined marginally YoY to USD270 in 2Q13, with occupancy

rate almost stable at 64%.



Jeddah office supply (in '000 sqm) Riyadh office supply (in '000 sqm)

Source: Jones Lang LaSalle Source: Jones Lang LaSalle

Jeddah average villa selling prices (SAR/sqm) Riyadh average villa selling prices (SAR/sqm)

Source: Jones Lang LaSalle, *Estimated Source: Jones Lang LaSalle, *Estimated

Jeddah hotel performance Riyadh hotel performance

Source: Jones Lang LaSalle, *YTD March, 2013 Source: Jones Lang LaSalle, *YTD March, 2013

623 661 764

842 882

103

78 40 11

-

100

200

300

400

500

600

700

800

900

1,000

2012 2013 2014 2015 2016

Completed Future supply

4,6004,500 4,500 4,500

4,600 4650

3,000

3,500

4,000

4,500

5,000

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13*

1,897 1,959 2,526

3,066 3,361

568

539

296 265

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2012 2013 2014 2015 2016

Completed Future supply

4,236

3,900

4,1124,200 4,250 4300

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13*

74%

73%

68% 71%

79%78%

60%

65%

70%

75%

80%

85%

100

150

200

250

2008 2009 2010 2011 2012 2013*

ADR (USD) - LHS

72%

62%

60%62%

57%

63%

50%

55%

60%

65%

70%

75%

150

200

250

300

2008 2009 2010 2011 2012 2013*

ADR (USD) - LHS Occupancy (%) - RHS



Segments Outlook

Office - Rental

Vacancy rate dropped to 16% in 2Q13 from 20% in 2Q12 in Jeddah; vacancy rate increased to 18% in 2Q13 from 14% in 2Q12 in Riyadh

Monthly rental rates rose 3.4%YoY in Jeddah and fell 7.5%YoY in Riyadh

Government expenditure would continue to keep demand high in Jeddah, leading to higher rents and lower vacancy rates; however, the new incoming supply of stock is expected to negatively impact the markets of Jeddah and Riyadh in the medium term


Monthly rental rates for villas rose 8%QoQ in Riyadh and 4% in Jeddah

Monthly rental rates for apartments increased 6%QoQ in Riyadh and stabilized in Jeddah

Monthly rental rates are expected to increase with rising demand for quality properties

Residential - Sales

Average sales prices grew in the range of 2–4%QoQ across areas in Jeddah and Riyadh

The rising expatriate population is expected to push apartment and villa sales prices up with demand for quality properties remaining high

Hospitality

Occupancy rate expected at 80% in Jeddah and 64% in Riyadh

ADR is believed to have risen 9% in Jeddah, whereas it fell 0.5% in Riyadh

Delay in projects is expected to prevent supply of new stock in the market, thus boosting the hospitality segment in Jeddah and Riyadh; Jeddah would continue to witness uptrend, whereas Riyadh is expected to bottom in the near term



UAE Real Estate Sector

Latest Developments

Mubadala Development Co awarded a contract worth USD197.7mn to the joint venture between Dubai-

based Al Futtaim and UK-based Carillion to build a five-star hotel located on the Al Maryah Island in Abu

Dhabi.

Dubai-based Deyaar announced plans to launch two projects in 2013: the first (worth USD136mn) is located

in Dubai’s Business Bay area, while the second is yet to be finalized.

Emaar Properties would form a joint venture each with Dubai Holding and Meraas Holding to build two multi-

billion dollar projects in Dubai.

The Zayed Housing Programme approved housing loans and grants totaling AED165mn to 329 Emiratis and

beneficiaries for April 2013.

Diamond Developers announced the commencement of the construction of the Dubai Sustainable City

project in July; the first 100 villas and townhouses are scheduled to be delivered by the end of 2014.

UAE’s president approved development and housing projects, including construction of new homes and

refurbishment of villas, worth AED800m.

Abu Dhabi’s government awarded Aldar Properties a contract to construct 996 villas in the emirate.

Abu Dhabi's Tourism Development & Investment Co sold the first phase of Saadiyat Beach Residences to

Mubadala Pramerica Real Estate Investors.

Market Performance

As seen in 1Q13, the office market saw a stable-to-rising trend during 2Q13. Average rent for Grade A office space

in Abu Dhabi stabilized at AED1,540/sqm with vacancy rates hovering at 37–38%. Meanwhile, Dubai’s office market

improved during the quarter with rental prices of specific high-quality office spaces growing 8%QoQ; rental prices

ranged from AED1,685/sqm to AED2,600/sqm, while vacancy rates remained stable at 31%. Demand for high-

quality stock remains strong, while that for lower grade buildings is dull, leading to declining rentals and rising

vacancy rates.

The residential sales market continued to grow in 2Q13 driven by robust economic fundamentals and improving

market sentiments. Rental and sales prices increased across most segments in Dubai and Abu Dhabi. In 2Q13,

3,400 residential units (mainly apartments) were added to the Dubai market. The REIDIN Residential Sale Index

indicated an improvement of 16%YoY in Dubai’s market, while the REIDIN Rental Indices registered a 12%YoY rise

in rents for villas and apartments. Meanwhile, almost 2,300 residential units were added to the Abu Dhabi market in

2Q13. The average sales price for properties in Investment Areas rose 5%QoQ to AED11,500/sqm. However, the

improvement was primarily restricted to prime properties in Investment Areas.

The hospitality segment’s uptrend continued in 2Q13; RevPAR and occupancy levels rose in the Abu Dhabi and

Dubai markets. The Abu Dhabi market added 600 branded rooms during 2Q13, while Dubai saw a major opening of

the Oberoi hotel. The occupancy level in Abu Dhabi rose to 70% (YTD May) from 62% during the same period in

2012. RevPAR grew 11%YoY, but average daily rates (ADR) declined 2%YoY due to oversupply. Occupancy rates

in Dubai improved to 85% (YTD May) from 83% during the same period in 2012. At the same time, ADR rose

5%YoY to AED267.



Avg. Dubai Office Rent (AED/sqm) Avg. Abu Dhabi Grade A Office Rent (AED/sqm)

Source: Industry Sources & Global Research Source: Industry Sources & Global Research

Dubai Res. Selling Prices (AED/sqm) Abu Dhabi Res. Selling Prices (AED/sqm)

Source: ASTECO Source: ASTECO, *Estimated

Dubai Hotel Performance (Year to May) Abu Dhabi Hotel Performance (Year to May)

Source: Jones Lang LaSalle Source: Jones Lang LaSalle

74%

76%

78%

80%

82%

84%

86%

150

170

190

210

230

250

270

290

2010 2011 2012 2013

ADR (USD) Occupancy (%)

0%

10%

20%

30%

40%

50%

60%

70%

80%

200

300

400

500

600

700

800

900

2010 2011 2012 2013

ADR (AED) Occupancy (%)

1,069 1,036 1,036 1,040 1,118

1,334

400

600

800

1,000

1,200

1,400

1,600

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

AE

D/S

qm

1,700

1,600

1,540 1,540 1,540 1,540

1,450

1,500

1,550

1,600

1,650

1,700

1,750

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

AE

D/S

qm

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

3Q12 4Q12 1Q13 2Q13

AE

D 0

00/a

n

Apartment Villa

8,500

9,000

9,500

10,000

10,500

11,000

11,500

12,000

3Q12 4Q12 1Q13 2Q13*

AE

D 0

00/a

n

Apartment



Segments Outlook

Office - Rental

During 2Q13, stock totaling 312,000 sqm was added to Dubai and 49,000 sqm to Abu Dhabi.

Vacancy rates remained stable in 2Q13 at 31% in Dubai and 37–38% in Abu Dhabi.

Monthly rental rates ranged between AED1,685 and AED2,600/sqm in Dubai and AED1,200 and AED1,540 /sqm in Abu Dhabi.

Rental rates are expected to rise mainly in quality office spaces, while lower grade office stock would continue to face pressure on rents; vacancy rates are expected to remain stable in the coming quarter.


Monthly rental rates for villas and apartments in Dubai surged 12%YoY.

Monthly rental rates for villas and apartments in Abu Dhabi are expected to have risen 10%YoY.

Demand for prime quality properties is expected to rise, leading to higher rental rates; however, the rest of the market would continue to face pressure, with addition of new stock.

Residential - Sales

Average sale prices of properties rose 16%YoY and 5%QoQ in Dubai and Abu Dhabi, respectively.

Sale prices are expected to rise, but the increase would be restricted to prime and newly developed properties.

Retail - Rental

Monthly rental rates increased, but remained range bound between AED970 /sqm and AED5,700/sqm in Dubai and between AED500/sqm and AED4,500/sqm in Abu Dhabi.

Rise in demand, driven by higher footfalls and increased consumer spending, is expected to push rental rates higher in Dubai; however, the rates in Abu Dhabi are expected to be stable as retailers remain cautious about expansion in the near term.

Hospitality

Abu Dhabi added 600 new rooms.

The occupancy rate was 85% in Dubai and 70% in Abu Dhabi.

ADR increased 5%YoY in Dubai, but declined 2%YoY in Abu Dhabi.

RevPAR grew 7.5%YoY in Dubai and 11%YoY in Abu Dhabi.

Increase in number of visitors is expected to lead to higher occupancy and ADR levels in Dubai; Abu Dhabi is expected to witness continued downward pressure due to increasing supply in 2013.



Market Cap. Current

Price Absolute Performance (%)

52 Week

Performance

(LC)

USD mn LC mn LC 1M 3M 12M High Low

UAE

Rak Properties 316 1,160 0.60 (3.2) 3.4 76.5 0.68 0.34

Union Properties 501 1,842 0.56 32.3 33.9 37.9 0.64 0.37

Deyaar Holding 739 2,716 0.50 23.5 20.0 38.1 0.59 0.30

Aldar Properties 5,437 19,106 2.54 (2.3) 21.5 104.8 2.96 1.18

Emaar Properties 9,453 34,720 5.70 (0.5) (4.0) 68.1 6.34 3.26

Kuwait

Injazzat Real Estate 118 34 97.0 (1.0) (6.7) 90.2 116.0 51.0

Abyaar Real Estate 218 62 55.0 (9.8) (22.5) 29.4 78.0 37.0

Al Mazaya Holding 247 70 116.0 (10.8) (19.4) 81.3 150.0 67.0

National Real Estate 511 145 172.0 (7.5) (9.7) 45.6 194.3 106.7

Comm. Real Estate 551 157 93.0 (5.1) (12.3) 36.8 110.0 67.0

United Real Estate 477 135 114.0 (1.7) (1.7) 1.8 138.0 100.0

Salhia Real Estate 631 179 350.0 2.9 4.5 29.6 375.0 280.0

Mabanee 2,773 788 1,140.0 3.6 1.8 12.0 1,200.0 981.8

Saudi Arabia

Saudi Real Estate 934 3,504 29.2 (9.3) (8.8) 7.0 38.0 23.5

Taiba Holding 1,384 5,190 34.6 (12.4) 7.8 51.1 42.8 22.6

Makkah Construction 2,923 10,961 66.5 (7.6) 22.6 65.4 77.0 39.0

Emaar Economic City 2,357 8,840 10.4 3.0 8.9 2.0 12.5 7.5

Dar Al Arkan 2,721 10,206 9.5 1.1 1.1 (3.6) 11.1 7.5

Qatar

United Development 2,046 7,068 22.1 (6.2) 1.8 21.0 24.6 16.6

Barwa Real Estate 2,714 9,475 25.4 (4.7) (4.3) (10.7) 31.0 22.8

Ezdan Real Estate 12,310 44,827 17.7 3.8 1.7 (12.4) 22.9 14.3

Bahrain

Seef Properties 153 58 0.1 - (2.3) 4.2 0.1 0.1

Oman

Sahara Hospitality 37 135 2.5 N/A N/A N/A 2.5 2.5

All current prices are in local currency based on August 27, 2013 close unless otherwise mentioned.

Source: Reuters & Global Research



Disclaimer

This material was produced by Global Investment House KSCC (‘Global’),a firm regulated by the Central Bank of Kuwait. This document is not to be used or considered as an offer to sell or a solicitation of an offer to buy any securities. Global may, from time to time to the extent permitted by law, participate or invest in other financing transactions with the issuers of the securities (‘securities’), perform services for or solicit business from such issuer, and/or have a position or effect transactions in the securities or options thereof. Global may, to the extent permitted by applicable Kuwaiti law or other applicable laws or regulations, effect transactions in the securities before this material is published to recipients. Information and opinions contained herein have been compiled or arrived by Global from sources believed to be reliable, but Global has not independently verified the contents of this document. Accordingly, no representation or warranty, express or implied, is made as to and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this document. Global accepts no liability for any loss arising from the use of this document or its contents or otherwise arising in connection therewith. This document is not to be relied upon or used in substitution for the exercise of independent judgment. Global shall have no responsibility or liability whatsoever in respect of any inaccuracy in or omission from this or any other document prepared by Global for, or sent by Global to any person and any such person shall be responsible for conducting his own investigation and analysis of the information contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this or other such document. Opinions and estimates constitute our judgment and are subject to change without prior notice. Past performance is not indicative of future results. This document does not constitute an offer or invitation to subscribe for or purchase any securities, and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. It is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. Neither this report nor any copy hereof may be distributed in any jurisdiction outside Kuwait where its distribution may be restricted by law. Persons who receive this report should make themselves aware of and adhere to any such restrictions. By accepting this report you agree to be bound by the foregoing limitations.

Global Investment House

Website: www.globalinv.net Global Tower

Sharq, Al-Shuhada Str. Tel. + (965) 2 295 1000

Fax. + (965) 2 295 1005 P.O. Box: 28807 Safat, 13149 Kuwait

Research

Faisal Hasan, CFA (965) 2295-1270 [email protected]

Wealth Management - Kuwait

Rasha Al-Qenaei (965) 2295-1380 [email protected]

Brokerage

Fouad Fahmi Darwish (965) 2295-1700 [email protected]

Global Kuwait

Tel: (965) 2 295 1000 Fax: (965) 2 295 1005 P.O.Box 28807 Safat, 13149 Kuwait

Global Bahrain

Tel: (973) 17 210011 Fax: (973) 17 210222 P.O.Box 855 Manama, Bahrain

Global UAE

Tel: (971) 4 4477066 Fax: (971) 4 4477067 P.O.Box 121227 Dubai, UAE

Global Egypt

Tel: (202) 24189705/06 Fax: (202) 22905972 24 Cleopatra St., Heliopolis, Cairo

Global Saudi Arabia

Tel: (966) 1 2994100 Fax: (966) 1 2994199 P.O. Box 66930 Riyadh 11586, Kingdom of Saudi Arabia

Global Jordan

Tel: (962) 6 5005060 Fax: (962) 6 5005066 P.O.Box 3268 Amman 11180, Jordan

Global Wealth Manager

E-mail: [email protected] Tel: (965) 1-804-242

gcc real estate quarterly 2q13 - amazon web...

Documents