A LOOKUP.AE SPECIAL REPORT

BUYING A TOWNHOUSE IN DUBAIQ4 2016 REPORT

This document helps give you an overview of purchasing townhouses in Dubai.

In this presentation, we go over the following:

1. Overview of Ready & Off-Plan Townhouse Communities2. Prices of Townhouses in Dubai 3. Review of Current & Future Supply of Townhouses4. Advantages of buying a Townhouse in Dubai 5. Recommendations

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TOWNHOUSE COMMUNITIES IN DUBAI

By clicking the link below you will be redirected to Lookup.ae where you can view more detailed information.

READY / MOSTLY READY READY SOON DELIVERY AFTER 2 - 3 YEARS

Springs Warsan Village Akoya Oxygen

The Lakes Mira Phase 4 & 5 Safi & Noor, Town Square

Jumeirah Village Triangle Mira Oasis Phase 1 The Pulse, Dubai South

Jumeirah Village Circle Akoya by Damac Urbana, Dubai South

Al Reem & Palmera, Ranches Zahra & Hayat, Town Square Maple, Dubai Hills

Falcon City More JVC Townhomes Arabella 1 & 2

Al Furjan Polo Townhomes Bella Casa and Casa Dora, Serena

Victory Heights Al Furjan Phase 3 Villa Nova, Dubailand

Green Comm DIP Dreamz Mira Oasis Phase 2 & 3

Green Comm Motor City The Fields

Mira Phase 1, 2 and 3

Canal Cove, Palm Jumeirah

Jumeirah Islands Townhomes

Mudon Phase 1

Jumeirah Islands Townhouses Springs

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SNAPSHOT OF SALE VALUES IN MAJOR READY & OFF-PLAN TOWNHOUSE COMMUNITIESThe table below helps understand the no. of bedrooms available in each of the major communities along with price ranges as of December 2016.

1 Bed 2 Bed 3 Bed 4 Bed 5 Bed

Al Furjan 2.3 - 2.7 M 2.8 - 3.2 M

Akoya Oxygen 1.0 - 1.2 M

Al Reem 1.8 - 2.1 M 2.4 - 3.0 M

Canal Cove 7 - 8.5 M

Green Comm DIP 3.0 - 3.2 M

Green Comm MC 4.2 - 4.5 M

JVT 1.4 - 1.6 M 2.3 - 2.5 M

JVC 1.35 - 1.5 M 2.2 - 2.4 M 1.8 - 2.2 M 2.2 - 2.8 M 2.5 - 2.8 M

Jumeirah Islands 3.9 - 4.0 M

Palmera 1.8 - 2.4 M 3.0 - 3.2 M

Maple, Dubai Hills 2.1 - 2.2 M 2.5 M 3.0 M

Mira 1 – 3 1.8 - 2.2 M 2.2 - 2.4 M

Mudon Phase 1 3.0 - 3.3 M

The Pulse 1.0 - 1.1 M 1.3 - 1.4 M

Serena 1.4 M 1.55 - 1.9 M

Springs 1.7 - 2.1 M 2.4 - 3.2 M

Town Square 1.3 - 1.45 M 1.75 - 1.9 M

Urbana 900 - 950 K 1.05 - 1.15

Victory Heights 3.0 - 3.2 M

Villa Nova 1.38 - 1.45 M 1.55 - 1.85 M

Warsan Village 1.55 - 1.65 M

Red = available on a payment-plan

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SNAPSHOT OF RENTAL VALUES FOR TOWNHOUSES IN DUBAI The table below helps understand the no. of bedrooms available in each of the major communities along with rental price ranges as of December 2016.

1 Bed 2 Bed 3 Bed 4 Bed 5 BedAl Furjan 155 - 175 K Al Reem 120 - 140 K 150 - 190 K Canal Cove 280 - 350 K Green Comm DIP 210 - 230 K Green Comm MC 230 - 245 K JVT 110 - 115 K 140 - 145 K JVC 105 - 110 K 140 - 145 K 145 - 160 K 150 - 170 KPalmera 140 - 160 K 190 - 220 K Mira 1 - 3 130 - 160 K Mudon Phase 1 180 - 195 K Springs 120 - 140 K 155 - 220 K Victory Heights 180 - 200 K

Green Community Motor City

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SUPPLY SUMMARY The below map gives an overview of the locations and status of the majority of the freehold villa & townhouse communities in Dubai as of December 2016. The contents of this presentation are focused entirely on the townhouse market.

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Total No. of Ready Freehold Townhouses: 11,611 units

Total No. of Under-construction Freehold Townhouses: 14,873 units

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DELIVERIES IN 2017The major supply entering the market includes:

i. Mira Phases 3, 4 and 5ii. Warsan Village in International Cityiii. Zahra Phase of NSHAMA Town Squareiv. First few villages of Akoya by Damac (Not Akoya Oxygen) v. Dreamz by Danube Properties & Phase 3 Al Furjan vi. The Polo Townhouses in Mohammad bin Rashid Cityvii. Jumeirah Islands Townhouses by Nakheel

DELIVERIES IN 2018Major deliveries include:

i. Continued hand-over of units in Akoya (not Akoya Oxygen)ii. Major supply entering in from Mira Oasis 1 through 3iii. Deliveries of the Hayat and Safi phases of Town Squareiv. Handover of Green Community DIP Phase 3

DELIVERIES IN 2019 & 2020 Expected supply for these two years include:

i. Continued handovers of Mira Oasis, NSHAMA Town Square, Akoyaii. Partial handovers commence in Akoya Oxygen iii. Handovers of Urbana and Pulse in Dubai South – the first townhouses to

handover in this area. iv. First supply enters MBR City, including Maple by Emaar and The Fields v. Handovers of Arabella, Serena and Villa Nova

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HISTORIC LOOK AT NEW TOWNHOUSE LAUNCHESThe number of actual townhouse units launched in 2016 was 41% lower than 2015 (2,874 units launched versus 4,939 launched in 2015). However, a lot of communities launched this year have major scope for future phase launches including Urbana, Serena, Villa Nova, Town Square and Akoya Oxygen.

2002 - 2004

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20160

5001000150020002500300035004000450050005500

New Townhouse Units Launched Annually from 2002 - 2016

HISTORIC LOOK AT TOWNHOUSE LAUNCHES VERSUS DELIVERIESThe below chart compares the new units launched versus units delivered by year.

2002 - 2004

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20160

1000

2000

3000

4000

5000

6000

7000

8000

Launched Delivered / Projected

Townhouse Units Launched vs. Delivered

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HOW SUPPLY COULD GROWThe supply of townhouses in Dubai will likely double in the coming 4 years (even considering project delays).

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 & 2020

0

5000

10000

15000

20000

25000

30000

0%

5%

10%

15%

20%

25%

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35%

Cumalative Supply % Change

Cumalative Suppy & % Increase

BUT SUPPLY ENTERS THE MARKET QUITE SLOWLY IN DUBAIThe below table gives a historical perspective on expected supply vs actual delivered. Almost all projects in Dubai launch with 3 year delivery timelines but we typically see delivery periods ranging from 3.5 – 4.5 years. On a very positive note, most developers now offer construction linked payment-plans.

2002 - 2004

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20160

1000

2000

3000

4000

5000

6000

Projected Delivery Delivered

Projected Deliveries vs. Actual Delivered

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HISTORIC PRICE TRENDSThe absolute peak of the townhouse market was in Q1 2014 when average prices were about AED 1,211 per sq. ft.

In Q4 2016, prices are 15.3% lower on average then market peak.

Change in capital prices for townhouses in Dubai from Q1 2016 through Q4 2016 was less than 1% signaling a fairly stable market.

629 652 651

809

9501007

10731144

1211 1204 11971140 1109 1073 1051 1041 1039 1030 1046 1050

2009 2010 2011 2012 Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Q1 2015

Q2 2015

Q3 2015

Q4 2015

Q1 2016

Q2 2016

Q3 2016

Q4 2016

FREEHOLD TOWNHOUSES IN DUBAI: HISTORIC PRICE PER SQ. FT.

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CURRENT MARKET POSITIONS Looking at the chart below can help you understand what your approximate current market position would have been based on your purchase period (i.e. if you purchased a townhouse in Q1 2013, at today’s prices your average capital gains would be approximately 11%. The peak gains you achieved would be approximately 27%.

If you purchased your townhome in Q1 2014, at today’s prices your average capital decline was about 13%; however, at the lowest period it was about 15% - signaling a market recovery.

-20%

0%

20%

40%

60%

80%

100%

2011 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016Current Position 61% 30% 11% -13% -5% 1%Best / Worst Position 86% 50% 27% -15% -7% -1%

Current PositionBest / Worst Position

Market Positions

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BUYING RECOMMENDATIONS FOR TOWNHOUSESBelow we provide you investment recommendations for townhouses based on potential objectives: location, desirability or capital gains.

Objective: LocationIf location is a priority for you, then this chart will help you compare the various locations of ready & off-plan townhouse communities.

Prime Locations: Springs, The Lakes

Emerging Core: Jumeirah Village Triangle, Jumeirah Village Circle, Al Furjan, Dubai Hills Estates

The Suburbs: Arabian Ranches, Victory Heights, Akoya, Mudon, Green Community Motor City, Sustainable City, Serena, Villa Nova

Outer Dubai: Mira, Town Square, Mira Oasis, Akoya Oxygen, The Pulse, Urbana

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Objective: Desirability The below table helps rank communities according to desirability (i.e. the key factors that end-users look for when purchasing):

Rank Community Positives

1 Springs

Large community of SZR; part of Emirates Living communities. 3 community centers, many schools, clinic and petrol-station. Quick accessibility to all core areas of Dubai. High transaction activity. Only major community in a prime-location.

2 Arabian RanchesTwo communities with townhomes: Reem and Palmera. Reem more affordable option. Ranches is a premier suburban development; high net worth community. High standard of community living.

3 Green Community Motor City & DIP

Among the most beautiful communities in the city. The 3 + Study options in these communities is extremely popular. Limited supply of these units. GC DIP is priced much lower as it is a leasehold property.

4 Victory Heights Only 4 bedroom townhouses available. Quiet suburban development built along a golf-course. Excellent accessibility to prime areas of Dubai.

5 JVT

The 1 & 2 bedroom townhomes in JVT are a popular purchase for families and/or investors looking for townhome holdings. Unique property types (one of only two communities with 1 bed townhomes; the 2 bed units are particularly spacious). Good accessibility; nice suburban lifestyle. Quiet neighborhood.

6 JVC

The only community in Dubai with 1, 2, 3, 4 and 5 bed townhomes. The 1 & 2 bed units are by Nakheel and are similar to the ones in JVT. The 3 - 5 bed townhomes are by private developers and are all 3 story. JVC is maturing quickly but there is still a lot of development to take place. Limited amenities. Buyers should take 3 - 5 year view.

7 Al FurjanClose to Sheikh Zayed Road. Mall and all major amenities close-by. Community still emerging; larger area still under-development. Metro-line being built close-by.

8 Mira, Reem

Brand new community; no amenities as yet. First major handover in Outer Dubai. Excellent entry price points (affordability). Capital & rental performance of this community will be a good barometer of market health in the coming 6 - 12 months.

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Objective: Short & Mid-term Capital GrowthThe following four communities are the ones we believe (at this point in December 2016) to offer the best prospects for capital growth:

1. Mira Oasis Investors typically realize significant capital gains when they find below market opportunities 6 – 15 months before a project hands over.

Mira Oasis is located next to the recently handed over Mira and will be delivered from Q4 2017 – Q4 2018. Mira Oasis was positioned to be an upgrade on the Mira townhouses.

At the moment, there are some buying opportunities at original price (OP) or in some cases below OP.

In order to take advantage of these types of opportunities, buyers must have available cash of at-least 50% of the original price + closing costs. Mortgages are not yet available.

Current transaction values range from AED 1.6 – 2.4 million for 3 & 4 bed units.

2. Warsan VillageThese are the most affordable townhouses in Dubai. Handovers will take place starting from Q1 2017 and continue through the year.

These units were all sold out AED 1.7 – 1.85 million. Currently there are opportunities to purchase 3 bedroom townhouses for AED 1.55 – 1.65 million.

These units will earn a healthy rental yield (6.5% at minimum). Strong prospects for capital growth of at least 10 – 15% within 12 – 15 months.

3. Maple in Dubai HillsOf all the off-plan future supply, Maple promises to have the best location and be in one of Dubai’s most desirable future communities – Dubai Hills.

Investing in quality and location will always pay off in the long-term.

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Investors have two strategies for Dubai Hills: we can help you purchase units from the primary market (limited 4 & 5 bed units still available).

The other strategy is to utilize cash and purchase below original price in the coming 12 months. However, these types of opportunities are rare and have to be acted upon rapidly.

4. NSHAMA Town Square NSHAMA’s Town Square development is the only community we believe has extremely strong prospects for short-term capital gains.

NSHAMA have launched four townhouse enclaves: Zahra, Hayat, Safi and Noor – about 1,500 townhouses in total. It is possible to purchase these units from the secondary market with premiums ranging from 8 – 12%.

Currently 3 bed units are for AED 1.35 – 1.45 million (significantly cheaper than Emaar’s Mira, which is ready across Al Qudra Road where similar 3 bed units are transacting for a minimum of AED 1.8 million.

Similarly the 4 bed units are for AED 1.75 – 1.9 million (much cheaper than the Type 2E and 1E units in Mira which have starting prices of AED 2.3 million at the moment).

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