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SpotlightDubai Property H1 2015
Core ResearchDubai Property
core-me.com
An International Associate of Savills
16
Spotlight | Dubai Property
Here or ThereDMCC FREE ZONE AT JUMEIRAHLAKES TOWERS IS ONE OF DUBAI’SMOST VIBRANT PLACES TO WORKAND LIVE
Image > JLT, Dubai, UAE
late 2003 and early 2004, with sale prices starting at AED 400 per sq. ft. According to data from Reidin.com, prices peaked in 2008, ranging between AED 1,300 per sq. ft. to AED 1,600 per sq. ft., depending on the building and its status of construction. Prices did fall to below AED 700 per sq. ft. during the recession years, stabilizing in 2011 at rates marginally above the 2009 prices.
Rents for one bedroom units ranged between AED 90,000 and AED 130,000 in 2008, dropping to between
AED 50,000 and AED 80,000 in 2009, with 2011 rents remaining in more or less the same range.
According to data from Reidin.com, sale prices have seen growth in the last three years rising by 17% in 2012, 24% in 2013 and 18% in 2014. Sought-after towers such as Al Seef, Indigo and Al Waleed Paradise have occupancy rates of around 95% with Lake Terrace, Green Lakes, Goldcrest and Armada demanding the highest sale prices.
In the case of offices, Almas is the most
The DMCC Free Zone at Jumeirah Lakes Towers has emerged in the last few years as an all-inclusive community with approximately 12,000 residential units, 1.1
million sq. m of office GLA, four hotels and 400 retail outlets. It covers an area of 1.5 million sq. m. and includes 66 completed towers, three lakes, a 55,000 sq. m. community park, numerous nurseries and two metro stations.
Projects within JLT were launched in
H1 2015
17core-me.com
expensive at prices exceeding AED 3,000 per sq. ft. and rents ranging between AED 160 and AED 250 per sq. ft. per annum. Reef, Gold, Silver, and Platinum rents are on the higher side with rents ranging between AED 140 and AED 160 per sq. ft.
Factors such as easy access to highways, efficient floor layouts, water connections within offices, concrete parking spaces, choice of cafes and other facilities are key to the higher occupancy and rental rates. As such, based on data from Reidin.com we observed that towers such as Mazaya (AA, BB1, BB2), Dome, HDS Business Tower and JBC 1 and 4 have high vacancy rates. With high vacancy rates, terms are becoming increasingly flexible but inspite of this, occupancies remain low. Core consultants have reported that in order to boost occupancy rates, landlords in these towers are starting to offer better terms to tenants such as longer rent free periods and 4 to 6 cheque payments.
Our consultants have also observed that in the case of the prime towers, with office rents on the rise, tenants are choosing to stay where they are while landlords prefer to find new tenants. A number of tenants are also looking to purchase their units in order to make mortgage payments instead of rents.
According to our consultants, the freezone attracts a large number of
BENEFITS
Range of businesses permitted is muchwider than other freezones such as DIC orDIFC
Location is on Sheikh Zayed Road, with access to Mohammed Bin Zayed Road
Freehold office space is available at lowrates compared to DIC and DIFC
Accessible to Abu Dhabi, Dubai airports
Mixed use with residential, retail, hospitalityand industrial
Traffic flows smoothly, two metro stations
Immigration, DHA are located within thedevelopment
DMCC organizes events, clubs, training andworkshops
Advantages of a DMCC License
Offi
ce R
ents
Co
mp
anie
s
Number of Companies vs Office Rents (2008 to H1 2015)GRAPH 14
Companies Office Rents (AED/sq.ft/Annum)
0
50
100
150
200
250
300
350
400
450
0
2000
4000
6000
8000
10000
12000
2008 2009 2010 2011 2012 2013 2014 H12015
The number of companies registeredin the freezone has also risen from about1,400 in 2008 to more than 10,400 inearly 2015 – an annualized growth rateof 37%, which is reportedly the fastestamong any freezone in Dubai.
AE
D p
er S
q F
t p
er A
nnum
JLT Residential Rents Compared to Other Residential LocationsGRAPH 13
Dubai Marina Palm Jumeirah Greens JLT Business Bay
0
20
40
60
80
100
120
140
H2
2014
H1
2014
H2
2013
H1
2013
H2
2012
H1
2012
H2
2011
H1
2011
H2
2010
H1
2010
H2
2009
H1
2009
Residential rents are lower comparedto the Greens, Palm Jumeirah andDubai Marina, whilst being on parwith rents in Business Bay
Source: Core Research, Reidin.com, number of companies and people data is from DMCC
Note: Office rents do not include service charges
Res
iden
tial S
ale
Pri
ces
Peo
ple
Number of People vs Residential Sale Prices (2010 to H1 2015)GRAPH 15
People Residential Sale Prices (AED/sq.ft.)
0
200
400
600
800
1000
1200
1400
1600
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
2008 2009 2010 2011 2012 2013 2014 H12015
The number of people living and working in JLThas been rising steadily from 2,000 in 2008 to85,000 in early 2015 – an annualized growth rateof 82% over 6 years.
18
Spotlight | Dubai Properties
small startup companies, who prefer fully fitted spaces just over 500 sq. ft. which is the minimum required to get a DMCC license. Fitted spaces command an extra AED 20 to AED 30 per sq. ft. Demand for larger spaces comes from companies that are expanding, such as those in the construction, technology and pharma industries.
One of the reasons why JLT is commanding interest is that DMCC, the master developer as well as Concordia, the facilities management company, are hugely committed to making JLT a great place to live and work now and in the future.
In 2012, DMCC converted Lake C into a 55,000 sq. m. park to cater to the demand for more green space. The park includes playgrounds, theatre areas, exercise zones, a Kobe Bryant basketball court, and picnic areas. F&B options are also expected to open in the park.
A pedestrian bridge was opened last year to connect the north and south side and a new pedestrian walkway has recently been completed between Mazaya Tower and Almas Tower. Various other crossings are planned throughout the community.
Concordia has invested in an energy efficient system in Gold, Silver and Almas Tower which has resulted in significant cost savings. They have also bought outdoor cinema equipment which was being used every fortnight in the JLT Park before the summer started. Art has also been promoted through the sponsoring of the painting of a wall in the V Cluster. There are plans to bring more art to JLT, with details expected to be released later in 2015. In addition, an Events Manager has been appointed to organize community events such as flea markets, food festivals and film festivals. The aim is to breathe life into the community and create a place to work, live and play.
Many of Core’s consultants have reported that parking remains a concern within JLT. DMCC has engaged a parking consultant to look at all issues and opportunities related to parking in the DMCC Free Zone and the results are expected to be positive.
With a number of residential and office towers under construction, the Leed Gold Standard One JLT is close to completion and the world’s tallest commercial tower, Burj 2020, is in planning stages. These developments are likely to lead to an increase in the popularity of JLT, a location that Core, UAE associate of Savills, will continue to be heavily involved with.
GRAPH 16
JLT Office Rents Compared to Other Office LocationsTECOM-C JLT Business Bay SZR DIC
0
100
200
300
400
500
600
700
H1
2015
H2
2014
H1
2014
H2
2013
H1
2013
H2
2012
H1
2012
H2
2011
H1
2011
H2
2010
H1
2010
H2
2009
H1
2009
H2
2008
H1
2008
AE
D p
er S
q F
t p
er A
nnum In the case of offices, JLT rents are comparable
with TECOM and Business Bay.Vacancy rates are 17% in Tecom, 53% inBusiness Bay and 30% in JLT.
Source: Core Research, Reidin.com
Executive Team
Please contact us for further information
Core Research
Safeena RangooniAssociate Director - Research+971 (0) 4 423 [email protected]
Core - UAE Associate of Savills
As one of the largest UAE property services �rms, Core, UAE associate of Savills, combines expert local market insight with the international strength provided by 600 of�ces globally.
Core’s multi-lingual advisers share an entrepreneurial spirit with a commitment to cultivating long-term, collaborative client relationships. Our local roots, commitment, and attention to detail are backed by the global standards of Savills’ 150 year old brand, giving our clients direct access to 27,000 experienced practitioners, with a deep understanding of specialist real estate services in over 60 countries.
Our bespoke residential and commercial property advice enables our clients to make informed real estate decisions both locally and abroad, through a single point of contact in any of the 15 languages spoken by our consultants, in one of our 3 of�ces, in Downtown Dubai, Jumeirah Lake Towers and Abu Dhabi.
This report is for general informative purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. Whilst every effort has been made to ensure its accuracy, Core, UAE associate of Savills, accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without written permission from Core’s Research Team. © Core Real Estate Brokers.
America
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Europe
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Australia
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UK &Ireland
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Middle East& Africa
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Global PresenceOVER 600 OFFICES AND ASSOCIATES WORLDWIDE
Edward MacuraManaging Director - Residential+971 (0) 4 388 [email protected]
Jim DrysdaleDirector - Investment Sales+971 (0) 4 388 [email protected]
Joel McQueenDirector - DMCC Of�ce+971 (0) 4 423 [email protected]
David GodchauxCEO+971 (0) 4 388 [email protected]
David AboodManaging Director - Commercial+971 (0) 4 388 [email protected]
Maher MallahDirector - Property Management+971 (0) 4 423 [email protected]
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Head OfficeGround Floor, Building 6Emaar Square, DowntownDubai, UAE+971 (0) 4 388 3339
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An International Associate of Savills