COMMERCIAL PROPERTY SECTOR; PROSPECTS IN UAE January 2011

KNIGHT FRANK - GLOBAL Korea Knight Frank & Rutley was founded in London in 1896. Knight Frank encompasses 209 offices in 47 countries across six continents. More than 6,840 professionals handle in excess of US$755 billion (£521 billion) worth of commercial, agricultural and residential real estate annually.

KNIGHT FRANK - REGIONAL Offices in Abu Dhabi and Bahrain. Teams in Saudi Arabia, Qatar & Kuwait. KF Service Lines: Regional Investment International Investment Tenant Advisory Commercial Leasing & Agency Valuation / Development Consultancy Corporate Recovery

HIGH PROFILE; GLOBAL & REGIONAL PRESENCE Bahrain Financial Harbour Bahrain 140,000 sq m Strategic Landlord Leasing & advice Empire State Building, New York, USA 290,000 sq m Strategic Landlord Leasing & advice Kingdom Tower, Jeddah, Saudi Arabia 430,000 sq m Strategic Landlord Leasing & advice 30 St Mary Axe, London England 76,400 sq m Strategic Landlord Asset Management CMA Head Office Tower, Riyadh, Saudi Arabia 200,000 sq m Strategic Landlord Leasing & advice

UNITED ARAB EMIRATES Knight Frank and the National Bank of Abu Dhabi have formed a joint venture in the UAE to provide real estate services. Dubai Abu Dhabi

COMMERCIAL PROPERTY SECTOR; HISTORIC TRACKING

HISTORIC OFFICE RENTS Peak AED 5,400 Peak AED 3,200 * Denotes average trend across the market

HISTORIC INDUSTRIAL RENTS Peak Rents AED 700 * Denotes trend across the market including freehold/non freehold and Freezones.

THE CRASH

Over supply of poorer grade stock BE AWARE…. Over supply of poorer grade stock Service Charge Strata Title

COMMERCIAL PROPERTY SECTOR; TODAY

TODAY’S MARKET; OFFICES & INDUSTRIAL Dubai Abu Dhabi Prime Rent:  AED 1,935 per Sq m Rental Decrease: 60% Prime Rent:  AED 2,000 per Sq m Rental Decrease: 35% Prime Rent:  AED 550 per Sq m Rental Decrease: 22% Prime Rent:  AED 600 per Sq m Rental Decrease: 25%

DUBAI OFFICES; FORECAST PRIME GRADE A GRADE B All prices are indication of the market

ABU DHABI OFFICES; FORECAST PRIME GRADE A GRADE B All prices are indication of the market

DUBAI & ABU DHABI; INDUSTRIAL FORECAST

COMMERCIAL PROPERTY SECTOR; THE OPPORTUNITY

IT’S A TENANT’S MARKET; BUT TREAD CAREFULLY Buildings: Specification: Some very poor buildings Car parking is paramount when looking at new space Opportunities to acquire fully fitted space to minimise up front capital costs of moving Scope to consolidate multiple sites into single tenancies Stay away from Strata buildings Market Conditions: Negotiate up and down rent reviews; especially for larger properties Be aware of service charges – ensure you get the service which you are paying for

IT’S A TENANTS MARKET; BUT TREAD CAREFULLY Scope to negotiate rent reductions when renewing Rent frees are getting longer Dubai; 4 payments & 2 payments in Abu Dhabi INDUSTRIAL We would suggest build to suit Acquire land in freezones to then sale and leaseback.

KNIGHT FRANK CAN ASSIST YOU

LOCAL MARKET INTELLIGENCE

GLOBAL TENANTS LOCAL MARKETS

ABU DHABI OFFICES Jazira Towers, Abu Dhabi Joint Leasing Agents Office & Retail 27,374 Sq m of leasable space Shell & Core Abu Dhabi University Tower, Abu Dhabi Exclusive Leasing Agents Office & Retail 5,7888 Sq m of leasable space Shell & Core Global Tower, Abu Dhabi Exclusive Leasing Agents Office & Retail 18,497 Sq m of leasable space Shell & Core – raised suspended floor Sama Tower, Abu Dhabi Exclusive Leasing Agents Office & Retail 3,388 Sq m of leasable space Shell & Core Sheikh Omar bin Zayed Tower, Abu Dhabi Exclusive Leasing Agents Office & Retail 5,224 Sq m of leasable space Part fitted

Director of Investment & Leasing THANK YOU James Lewis Director of Investment & Leasing Knight Frank Tel: +971 (0)2 6353 297 James.lewis@me.knightfrank.com