Jul 01, 2012
Kuwait Financial Centre "Markaz"
MENA REAL ESTATE RESEARCH
Research Highlights: A weekly market commentary
Real Estate Market Commentary
24-Jun-12 to 30-Jun-12
UAE: It was reported that a new regulation was issued by the Govt. of UAE, enabling non-UAE nationals to lease land within two additional clusters released at Dubai Investments Park, predominantly an industrial zone, for up to 85 years. The move is likely aimed at capitalizing on the mixed-use development's industrial sector focus, which has reportedly seen a sharp recent rise in development activity. Riyadh: JLL's Q1-12 market overview revealed that, new supply completed during Q1-12 was mostly absorbed. Other emerging trends included more relaxed financing terms and increasing popularity of the concept of mixing apartments & villas through a separate access at low end districts. The consultants outlined that rentals & sales prices in the residential market exhibited an uptrend on a Q-o-Q & Y-o-Y basis (refer Exhibit 1). Villas in compounds & apartments with proximity to schools and hospitals witnessed higher than average rental increases. JLL forecasts further price & rental increases for villas & apartments, driven by the anticipated hike in govt. employee housing allowances, completion of limited high-quality developments &, expects larger share of future apartments to be in compounds. In the office segment, JLL reported stable rental trends Q-o-Q, but declines on a Y-o-Y basis, with flat vacancy rates Q-o-Q (12%). Higher vacancy rates & rental declines are expected for the rest of 2012 as new supply enters the market. Jeddah: JLL's Q1-12 report indicated that, rentals in the residential market showed an uptrend on a Q-o-Q basis. Apartment rentals increased significantly (1%-8%) compared to villas (0%-4%), due to higher expat demand for the former. Apartment rentals increased 10% Y-o-Y due to rising middle-income household demand, and the increase was significantly higher than villa rental trends. Prices rose on a Q-o-Q basis, with both villas & apartments experiencing a considerable rise in capital values in most districts. Further, villa & apartment prices increased across districts Y-o-Y as well, with villa prices rising 11%. A further increase in both rents and prices of villas & apartments is expected due to growing demand. In the office market, average rents increased marginally on a Q-o-Q basis as higher occupancy rates drove Grade-A office rentals higher. However a significant decline for Grade-B space rentals pulled down average rentals marginally, on a Y-o-Y basis. JLL expects rentals to decline during rest of the year, due to oversupply. Qatar: The General Secretariat for Development Planning (GSDP) expects real GDP to grow 6.2% in 2012, indicating a significant decline from the double-digit growth witnessed since 2006 as gas output decelerates. For 2013, the GSDP expects GDP growth to moderate to 4.5%, due to a deceleration in hydrocarbon growth as yields from maturing oil fields may fall. Non-hydrocarbon sector, led by the construction industry is expected to expand by over 9.0% in 2012 & 13 and drive real GDP growth. GSDP estimates are broadly in line with IMF estimates of 6.0% and 4.6% for 2012 & 13 respectively. GCC: As per Knight Frank's Prime Global Rental Index, rentals for luxury properties in the Middle East declined 5.4% Y-o-Y. Rentals in Dubai (ranked 14th) increased a marginal 1% Q-o-Q, while those in Manama (ranked 16th) declined 16.7%. On a Y-o-Y basis, rentals declined 3.9% in Dubai and 20% in Manama, as the sluggish rental performance led to the two cities to being ranked as laggards on the 16 city index.
Contents Market Commentary Charts to Note Activity Monitor: Dubai, Kuwait, Riyadh - KSA, Dammam KSA Qatar Markaz Research is available on: Bloomberg - Type "MRKZ" Thomson Research, Reuters Knowledge ReutersRealEstate.com Nooz Zawya Investor ISI Emerging markets
Thomas K. Mathew Senior Research Analyst +965 2224 8000 Extn: 2712 tmathew@markaz.com Venkat Ramadoss ACA, CFA Manager +965 2224 8548 rvenkateshwaran@markaz.com Bassam N. Al-Othman Executive Vice President +965 2224 8011 bothman@markaz.com
Kuwait Financial Centre "Markaz" P.O. Box 23444, Safat 13095, Kuwait Tel: +965 2224 8000 Fax: +965 2242 5828 markaz.com
Developments sourced from various sources including news portals like Gulfbase, Zawya, Reuters, Bloomberg, Trade Arabia, Business 24/7, Arabian Business, The Peninsula, Gulf News, Property Wire, Khaleej Times, Saudi Gazette, KUNA etc and also from published reports of real estate brokers and investment research houses.
MENA REAL ESTATE RESEARCH
Exhibit 1: Sales & rental trends at a glance Riyadh
Source: JLL Riyadh report, Q1-12, Markaz Analysis
Charts to note
Chart 1: UAE Consumer Price Index (CPI) and house rents 2011-12
118 116 114 112
110
108 106 104 102
100 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 2011 2011 2011 2011 2011 2011 2011 2011 2012 2012 2012 2012 2012 CPI Housing Component
Source: National Bureau of Statistics (NBS), Monthly Consumer Price Indices (2011 & 2012), Markaz Analysis
Chart 2: KSA office supply 2011-15
Source: JLL Riyadh, Jeddah reports, Q1-12, Markaz Analysis
Kuwait Financial Centre "Markaz"
2
MENA REAL ESTATE RESEARCH
Chart 3: Qatar Consumer Price Index (CPI) and house rents 2011-12
120 110 100
90
80 70 60
50
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 2011 2011 2011 2011 2011 2011 2011 2011 2012 2012 2012 2012 2012
CPI
Housing Component
Source: Qatar Statistical Authority (QSA), Markaz Analysis
Chart 4: JLL Global Real Estate Transparency Index 2012
Kuwait Financial Centre "Markaz"
3
Villa
Land
Total
No. of Transactions
No. of Transactions
10
15
20
25
30
35
Apartment
Transactions
10
30
50
70
90
20
40
60
80
Villa Transactions
Land Transactions
Activity Monitor
No. No. No. No. Value Value Value Value -4.0% -7.5% 7.9% 31.5% 40.5% 29.6% 28.6% 20.7% 7.2% 150.6% -33.3% 88.9% 54.5% 163.0% 231.9% 122.1%
5
No. of transactions
W-o-W Y-o-Y
Dubai Real Estate Transactions (2011 & 2012)
No. of transactions Value transacted (AED Mn)
Value transacted (AED Mn)
W01-2011 W03-2011 W05-2011 W07-2011 W09-2011 W11-2011 W13-2011 W15-2011 W17-2011 W19-2011 W21-2011 W23-2011 W25-2011 W27-2011 W29-2011 W31-2011 W33-2011 W36-2011 W38-2011 W40-2011 W42-2011 W44-2011 W46-2011 W48-2011 W50-2011 W52-2011 W02-2012 W04-2012 W06-2012 W08-2012 W10-2012 W12-2012 W14-2012 W16-2012 W18-2012 W20-2012 W22-2012 W24-2012 W26-2012
W01-2011 W03-2011 W05-2011 W07-2011 W09-2011 W11-2011 W13-2011 W15-2011 W17-2011 W19-2011 W21-2011 W23-2011 W25-2011 W27-2011 W29-2011 W31-2011 W33-2011 W36-2011 W38-2011 W40-2011 W42-2011 W44-2011 W46-2011 W48-2011 W50-2011 W52-2011 W02-2012 W04-2012 W06-2012 W08-2012 W10-2012 W12-2012 W14-2012 W16-2012 W18-2012 W20-2012 W22-2012 W24-2012 W26-2012
0
0
Kuwait Financial Centre "Markaz"
200
400
600
800
1,000
1,200
20 120 160
40
60
80 140
100
MENA REAL ESTATE RESEARCH
4
Value Transacted (AED Mn)
Value Transacted (AED Mn)
MENA REAL ESTATE RESEARCH
Apartment Transactions
No. of Transactions
500 400 300
500 400 300
200
100 W01-2011 W03-2011 W05-2011 W07-2011 W09-2011 W11-2011 W13-2011 W15-2011 W17-2011 W19-2011 W21-2011 W23-2011 W25-2011 W27-2011 W29-2011 W31-2011 W33-2011 W36-2011 W38-2011 W40-2011 W42-2011 W44-2011 W46-2011 W48-2011 W50-2011 W52-2011 W02-2012 W04-2012 W06-2012 W08-2012 W10-2012 W12-2012 W14-2012 W16-2012 W18-2012 W20-2012 W22-2012 W24-2012 W26-2012
200
100 0
No. of transactions
Value transacted (AED Mn)
Source: Dubai Land Department Note: 1) The above table/chart represents transactions as per the registration date and not the transaction date 2) Outliers identified are removed for better clarity.
Kuwait Financial Centre "Markaz"
Value Transacted (AED Mn)
600
600
5
Total
No. of Transactions
No. of Transactions
100
150
300
350
200
250
Private Residential
50
0
30
40
50
60
70
Investment
Commercial
10
20
0
Source: MOJ, Kuwait
Transactions
No. 5.6% -100.0% -100.0%
No.
No.
No.
Value -24.9%
Value
Value -44.5%
Value -9.8% 1.0%
W-o-W
10.5%
Investment Property transactions
-31.5% -100.0% 24.1% 1.2% 39.7% 52.3% -100.0% -19.4%
Y-o-Y
No. of transactions
Private Residential Property transactions
Kuwait Real Estate Transactions (2011 & 2012)
No. of transactions
Value transacted (KWD Mn)
Value transacted (KWD Mn)
W01-2011 W03-2011 W05-2011 W07-2011 W09-2011 W11-2011 W13-2011 W15-2011 W17-2011 W19-2011 W21-2011 W23-2011 W25-2011 W27-2011 W29-2011 W31-2011 W33-2011 W35-2011 W37-2011 W39-2011 W41-2011 W43-2011 W46-2011 W48-2011 W50-2011 W52-2011 W02-2012 W04-2012 W06-2012 W08-2012 W10-2012 W12-2012 W14-2012 W16-2012 W18-2012 W21-2012 W23-2012
W01-2011 W03-2011 W05-2011 W07-2011 W09-2011 W11-2011 W13-2011 W15-2011 W17-2011 W19-2011 W21-2011 W23-2011 W25-2011 W27-2011 W29-2011 W31-2011 W33-2011 W35-2011 W37-2011 W39-2011 W41-2011 W43-2011 W46-2011 W48-2011 W50-2011 W52-2011 W02-2012 W04-2012 W06-2012 W08-2012 W10-2012 W12-2012 W14-2012 W16-2012 W18-2012 W21-2012 W23-2012
0
50 60 70
0
30
40
10
20
100
160
180
120
140
20
40
60
80
Kuwait Financial Centre "Markaz"
Value Transacted (KWD Mn)
Value Transacted (KWD Mn)
MENA REAL ESTATE RESEARCH
6
Total
Source: MOJ
Source: MOJ
No. of Transactions
No. of Transactions
200
250
300
350
400
450
100
500 0
No. No. No. Value Value Value
150
50
-9.9% 173.2% -12.5% -11.3% -13.3% 70.0%
1,500
2,000
Residential
Riyadh Real Estate Transactions
Commercial
Transactions
Riyadh Residential transactions
1,000
2,500
3,000
Riyadh Commercial transactions
0
W-o-W
KSA Real Estate Transactions (2011 & 2012)
No. of Transactions
No. of Transactions
-0.1%
Y-o-Y
-70.5%
-59.7% 35.6%
-39.1%
-72.8%
Value Transacted (SAR Mn)
Value Transacted (SAR Mn)
W01-2011 W03-2011 W05-2011 W07-2011 W09-2011 W11-2011 W13-2011 W15-2011 W17-2011 W19-2011 W21-2011 W23-2011 W25-2011 W27-2011 W29-2011 W31-2011 W33-2011 W36-2011 W38-2011 W40-2011 W42-2011 W44-2011 W47-2011 W49-2011 W51-2011 W01-2012 W03-2012 W05-2012 W07-2012 W09-2012 W11-2012 W13-2012 W15-2012 W17-2012 W19-2012 W21-2012 W23-2012 W01-2011 W03-2011 W05-2011 W07-2011 W09-2011 W11-2011 W13-2011 W15-2011 W17-2011 W19-2011 W21-2011 W23-2011 W25-2011 W27-2011 W29-2011 W31-2011 W33-2011 W36-2011 W38-2011 W40-2011 W42-2011 W44-2011 W47-2011 W49-2011 W51-2011 W01-2012 W03-2012 W05-2012 W07-2012 W09-2012 W11-2012 W13-2012 W15-2012 W17-2012 W19-2012 W21-2012 W23-2012
0
Kuwait Financial Centre "Markaz"
500
1,000
1,500
2,000
2,500
1,000
1,500
2,000
2,500
3,000
3,500
0
500
MENA REAL ESTATE RESEARCH
7
Value Transacted (SAR Mn)
Value Transacted (SAR Mn)
Source: MOJ
Source: MOJ
No. of Transactions No. of Transactions
200
300
500
600
100
400
0
100
120
140
160
180
Dammam Real Estate Transactions
Transactions No. Residential Value No. Commercial Value No. Total Value
20
-29.6% -19.3% -47.5% -26.1%
40
60
80
0
W-o-W
-12.7% -17.4%
Dammam Residential transactions
Dammam Commercial transactions
No. of Transactions
No. of Transactions Value Transacted (SAR Mn)
Y-o-Y
-68.0%
-48.0%
-83.1%
-44.0%
-34.8%
-49.0%
Value Transacted (SAR Mn)
W01-2011 W03-2011 W05-2011 W07-2011 W09-2011 W11-2011 W13-2011 W15-2011 W17-2011 W19-2011 W21-2011 W23-2011 W25-2011 W27-2011 W29-2011 W31-2011 W33-2011 W36-2011 W38-2011 W40-2011 W42-2011 W44-2011 W47-2011 W49-2011 W51-2011 W01-2012 W03-2012 W05-2012 W07-2012 W09-2012 W11-2012 W13-2012 W15-2012 W17-2012 W19-2012 W21-2012 W23-2012
W01-2011 W03-2011 W05-2011 W07-2011 W09-2011 W11-2011 W13-2011 W15-2011 W17-2011 W19-2011 W21-2011 W23-2011 W25-2011 W27-2011 W29-2011 W31-2011 W33-2011 W36-2011 W38-2011 W40-2011 W42-2011 W44-2011 W47-2011 W49-2011 W51-2011 W01-2012 W03-2012 W05-2012 W07-2012 W09-2012 W11-2012 W13-2012 W15-2012 W17-2012 W19-2012 W21-2012 W23-2012
0
Kuwait Financial Centre "Markaz"
0
400 1,200
800
200 1,000
600
200
400
600
800
MENA REAL ESTATE RESEARCH
1,000
1,400
1,800
1,200
1,600
8
Value Transacted (SAR Mn)
Value Transacted (SAR Mn)
No. of Transactions
No. Value
200
250
300
350
400
100
150
50
0
Source: MOJ
Transactions W-o-W
-7.57% 51.78% 33.59% -16.03%
Y-o-Y
Qatar Real Estate Transactions (2011 & 2012)
No. of transactions Value transacted (QAR Mn)
W01-2011 W03-2011 W05-2011 W09-2011 W11-2011 W13-2011 W15-2011 W17-2011 W19-2011 W22-2011 W24-2011 W28-2011 W31-2011 W33-2011 W36-2011 W40-2011 W42-2011 W44-2011 W48-2011 W51-2011 W01-2012 W03-2012 W05-2012 W07-2012 W09-2012 W11-2012 W13-2012 W16-2012 W18-2012 W20-2012 W22-2012
0
Kuwait Financial Centre "Markaz"
500
2,000
2,500
3,000
3,500
4,000
1,000
1,500
MENA REAL ESTATE RESEARCH
9
Value Transacted (QAR Mn)
MENA REAL ESTATE RESEARCH
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