FutureBrand's 2007 Gulf Real Estate Study

FutureBrand is a full service global branding firm. Shaping with Strategy. Communicating with Design. Implementing for Impact and Reach. We build real estate brands that aim to increase value and sales velocity, inspire wanderlust and fire imaginations – all over the world.www.futurebrand.com

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PROUD SPONSOR

This is the third year that FutureBrand, a premier global brand consultancy, has issued its Gulf Real Estate Study. Each year it becomes more comprehensive, extensive and insightful. This year is no exception. Substantial qualitative and quantitative research was conducted, and experienced global teams explored new trends, themes and insights in the category. The result is the only comprehensive assessment, from a marketing perspective, of the region’s most prolific industry.

GULF REAL ESTATE STUDY

FUTUREBRAND’S 2007

The Real Estate Division of Istithmar is the proud sponsor of this year’s Study.

SHARE YOUR COMMENTSVISIT OUR BLOG AT: WWW.FUTUREBRAND.COM/GRES

THE FUTUREBRAND PHILOSOPHY

Having worked with leading companies all over the world, including the Gulf ’s most notable developers, FutureBrand has unparalleled experience in pioneering brands. We believe that understanding our clients’ industries as well as they do is mandatory. However, it is FutureBrand’s core philosophy that sets us apart.

Our point of differentiation begins with our name — our focus on the future — and a framework that helps clients build brands that are holistic and future-proof. A true ‘FutureBrand,’ for us, creates a new definition of brand excellence, which we shape in two ways.

BRAND FRAMEWORKFirst we develop a strategic framework for your brand, identifying what is essential and what is its core essence. Using deep category insights, we define the opportunity and create a value proposition for your business and its brand.

YOUR CUSTOMERSFor brands to excel, they not only need to be targeted, but also fine tuned to the needs of diverse audience segments and their relative brand adoption requirements. Research provides us with a considered viewpoint about where your customers may reside on the path between awareness and advocacy, and what can trigger their decisions to buy or invest.

Our philosophy is straightforward because it is rooted in basic human truths. We uncover what people need and what motivates them. We then couple this with an understanding of when and how customers make purchase decisions. Both are critical to ensuring marketing success and building brand differentiation for the long term. Lastly, we design brands that provoke a positive reaction, create an emotional bond and deliver measurable results.

POSITION AND ACTIVATIONThe network of customers in any category is rarely straightforward. The sketch here, showing the landscape of sample real estate buyers, is no exception. Understanding the needs and requirements of each segment, and its relative importance, is a difficult challenge when behaviors and needs may appear similar. FutureBrand helps clients to navigate this

constellation of interdependencies and can assist in prioritizing real opportunities over distractions.

Equally vital is knowing why, how and when to activate a compelling brand. Creating an actionable blueprint for how to move a brand forward is critical.

A ‘FutureBrand’ is architected to leverage its core essence, to stand out relative to competitors and to engage customers for the long term. We believe a ‘FutureBrand’ is excellence in branding, and we strive to create brands that think ahead and stay ahead.

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FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY

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MANY DEVELOPMENT PROFESSIONALS STILL THINK OF BRANDING AS SUPERFICIAL WINDOW DRESSING OR SIMPLY A LOGO THAT GETS CREATED MOMENTS BEFORE SENDING A BROCHURE TO PRINT. WHILE THIS MAY BE THE NORM FOR SOME COMPANIES, IT IS CERTAINLY NOT THE BENCHMARK FOR WHAT A BRAND IS OR WHAT IT CAN DO.

SINCE EACH DEVELOPER AND EACH DEVELOPMENT HAS ITS OWN OBJECTIVES, PRIORITIES, CHALLENGES AND BUSINESS ISSUES, EACH BRANDING SITUATION IS UNIQUE. SIMPLY BROADCASTING YOUR MESSAGE OR SPENDING HEALTHY AMOUNTS ON MEDIA WILL NOT GUARANTEE SUCCESS, ESPECIALLY AS THE MARKET MATURES. PART OF THE SKILL OF BRANDING IS KNOWING WHICH APPROACH IS BEST SUITED TO THE SPECIFIC SITUATION, HOW TO CREATE A CONNECTION WITH TARGET CUSTOMERS AND HOW BEST TO HELP COMPANIES STAND OUT AGAINST THE CROWDED PLAYING FIELD.

BRANDINGREAL ESTATE

CREATING AND LAUNCHING A NEW BRAND AND BUILDING AWARENESS DESPITE THE CLUTTER

FIXING A DECLINING PROJECT IMAGE THAT IS NEGATIVELY AFFECTING SALES AND INVESTOR INTEREST

RESPONDING TO INCREASED COMPETITION FROM NEW DEVELOPMENTS

DETERMINING WHETHER A BRAND SHOULD FRANCHISE TO OTHER LOCATIONS

ESTABLISHING WHETHER A NEW DEVELOPMENT PHASE REQUIRES A NEW BRAND

CREATING AND ENFORCING BRAND AND MARKETING GUIDELINES FOR THIRD PARTY DEVELOPERS AND VENDORS

ASSESSING MARKETING PLANS TO DETERMINE IF MEDIA SPEND IS BEING STRATEGICALLY CONSIDERED CREATING A COMPELLING SALES CENTER THAT DELIVERS A BRANDED EXPERIENCE

ESTABLISHING A CUSTOMER AFFINITY PROGRAM

DEVELOPING A LONG-TERM CRM APPROACH TO HELP CLOSE THE GAP BETWEEN PURCHASE AND HANDOVER

CREATING A COMPELLING WAY FINDING SYSTEM

LAUNCHING AN INTERNAL BRANDING PROGRAM TO ENSURE THAT EMPLOYEES ARE AMBASSADORS OF THE BRAND

BRANDING CHALLENGES IN A SATURATED MARKETPLACE:

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2007DEVELOPMENT CONTINUES TO ADVANCE AT BREAKNECK SPEED IN THE REGION, WITH BRANDS VYING FOR ATTENTION. REGULATORY BOARDS ARE FORMING, CUSTOMER ASSOCIATIONS CONTINUE TO BE CREATED AND THE CATEGORY IS, ON THE WHOLE, MATURING. CUSTOMERS HAVE HIGHER EXPECTATIONS AND MORE TO CHOOSE FROM, AND THEY REQUIRE MORE ATTENTION THAN EVER BEFORE.

AS THE MARKET OVERLOADS WITH COMPETITIVE MESSAGES, PROMISES AND OVERPROMISES, BRANDING BECOMES MORE CHALLENGING AND MORE CRITICAL FOR SUCCESS. ADDITIONALLY, AS REAL ESTATE

DEVELOPMENTS ARE GROWING IN SCALE, THEY ARE BEING CONSIDERED AS DESTINATIONS IN AND OF THEMSELVES. OFTEN THEY NEED TO MARKET THEMSELVES AS PLACES AND NOT JUST AS BUILDINGS.

A BRAND, IN ITS HIGHEST STATE, SHOULD CREATE AN IDENTIFIABLE, COMPELLING AND UNIFYING PLATFORM. TO ACHIEVE THIS, THE ROLE OF BRAND BUILDING MUST ACCOMPANY EVERY ASPECT OF THE BUSINESS, FROM CONCEPT AND PRODUCT DEVELOPMENT THROUGH TO SALES, CULTURE BUILDING AND EMPLOYEE TRAINING. WITH EVERY CUSTOMER TOUCHPOINT, REAL ESTATE BRANDS HAVE AN OPPORTUNITY TO CREATE PREFERENCE, LASTING VALUE AND RETURN ON INVESTMENT.

The value of all GCC real estate projects announced in the last year alone (2006-07) has increased 59% to $143 billion.2

GCC retail space will triple to more than 161 million sq. ft. by 2016.3

According to the Dubai Land Department, land prices are up an average of 64% from last year.4

Construction in Dubai has grown by an average of 32.7% a year since 2001.5

The value of mortgages in Dubai rose by 170% above the previous year, to $11 billion.6

Dubai ranked as the 14th most expensive city in the world in which to rent accommodation.7

Dubai alone has 24 million sq. ft. of commercial space currently under development and is ranked third in terms of global office real estate construction activity. Moscow and Shanghai take the top two spots.8

Office rents in Dubai now rank just outside the top 10 on a global basis, at around $89.60 per sq. ft., compared with 10th placed Hong Kong, with rents around $97.20 per sq. ft.9

Abu Dhabi is scheduled to award $7.6 billion of projects to contractors in 2007 and increase this figure to $9.5 billion in 2008.10

The population of Abu Dhabi is set to double within the next 10 years.11

Bahrain has a remarkable 27.4% average growth per annum in its overall real estate sector.12

Oman and Qatar are both showing an impressive 10% growth in the residential sector.13

The Kuwait real estate market saw considerable growth, with sales and number of units rising by 67% and 46% respectively, compared to the same period last year.14

Saudi Arabia’s fastest growing sector is real estate, with more than $260 billion in investments. This growth is deemed to be the second highest in the world, after Shanghai.15

NEWS AND NOTEWORTHY

TOTAL DEVELOPMENT PROJECTS, BOTH PLANNED AND UNDERWAY IN THE UAE, INCREASED BY 79% FROM 2006 TO 2007.1

YEAR IN REVIEW

NEW NOTABLESSOFT/PRELAUNCHESMore developers, including Nakheel and Omniyat, are using soft and prelaunches to test reaction to new marketplace offerings and pricing.

SPA WITH THAT APARTMENTAlmost every development is now featuring a brand name luxury spa facility in addition to a gym on site.

LATEST PARTNERINGNo longer pairing famed designers and furniture brands, developers are now partnering with electronic, jewelry and cigar brands to create the ultimate residential experience.

METRO POWERDemand for real estate near planned Dubai Metro stations is high and plots are commanding price premiums.

SWEEPSTAKES FEVERIn addition to Damac Properties, a company known for plane and car giveaways, Omniyat Properties has now launched a high profile $4.35 million giveaway.

ENTERTAINMENT ORIENTATIONFrom the purchase of the QE2 by Istithmar to Warner Bros. signing with Aldar to create a theme park complex, entertainment offerings are becoming increasingly substantial in size and more high profile.

RETIREMENT TARGETINGThe government of Bahrain is targeting expatriates who have worked in any of the five other GCC countries for 15 years. This segment can now live in Bahrain after retirement, suggesting it will contribute to the growth of consumption and a livelier economy.16

COST OF LIVING/INFLATIONRising inflation and cost of living is a threat to Dubai and an opportunity for neighboring locales. Some companies are now less prone to relocate to Dubai due to spiraling costs. Dubai’s rate of inflation is 10%, about equal to Russia’s.17

2006 NOTABLESCONTINUED DELAYS Buyers are frustrated, angered and only occasionally compensated.

PROPERTY FEVER The category continues to boom in more geographies.

RISING CONSTRUCTION COSTS Contractors are calling the shots.

BRAND NAMES SEEK ACTION From residential buildings to museum complexes, big names are involved in Gulf developments.

RENTS INCREASE High demand continues to hike up rents across the board, despite government decrees.

VILLA SHORTAGES Ready-to-move-in villas are a buyer’s wish, but scarce.

AN AVALANCHE OF TOWER CITIES High-rise metropolises emerge and residents shudder.

HOMEOWNER ASSOCIATIONS Buyers organize, and publicize, and the government is listening.

LEISURE EXPANDSGolf courses, community centers and sports facilities continue to expand, with marinas and related maritime amenities also on the rise.

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TRENDSMORE FOR BUYERSMATURING MARKETING CAMPAIGNSDevelopers are using more than large billboards and newspaper wrap-around ads to promote their offerings. The rise of multimedia campaigns, linking television, radio, print and online advertising, is creating more cohesive marketing programs.

PRICING INFORMATION The publishing of list prices is becoming popular with Emaar, among others. More developers are featuring pricing details prominently in select print ads and online.

MODEL HOMES AND SUITESDevelopers are giving buyers a chance to see the finished product and further communicate a lifestyle orientation by showcasing model homes and suites. As developments come closer to completion, site tours will be on the rise.

MORE FINANCING OPTIONSMany projects now have a variety of lenders on board, representing more lending options. Mortgage providers are now linked with developers directly through signage, collateral and in advertising to streamline and minimize buyer efforts to secure funding.

GOVERNMENT TAKES CONTROLREAL ESTATE REGULATORY AUTHORITYTo better control the burgeoning development market, customer complaints, and general compliance, the Dubai government has created the Real Estate Regulatory Authority (RERA). This government entity will establish policies and best practices regarding freehold property, 99-year leases and the rental market in Dubai.

RENTAL INITIATIVESNew rental laws, mandating the relationship between tenant and landlord and requirements for authenticating and registering rental contracts, are under development in an effort to better control Dubai’s rental market. Additionally, there is discussion of relaxing the 7% rent cap issued earlier this year, and a decision is expected by December, 2007.

TRUST ACCOUNT LAWThe newly announced Trust Account/Escrow Law requires developers to keep buyers’ deposits in escrow accounts rather than allowing developers, without some form of independent certification permitting fund release, to pay this money early to contractors as a project advances. This may cause some complications to developers in securing timely contracting offers and managing their cash flow; however, the law is expected to create a higher level of confidence and credibility in the marketplace.

EXPORTATION AND EXPANSIONEXPORTING DUBAI SUCCESS ABROADWhile the Gulf may be one of the most prolific real estate markets in the world, many domestic developers are expanding their capital and influence overseas. Emaar has been one of the earliest to extend its reach into the United States. It has launched projects worth more than $110 billion outside the UAE.18

Nakheel has launched Nakheel International. Limitless has announced projects in China, Vietnam and Pakistan.19 ETA Star is developing projects in Bangalore and Chennai, India, while Damac has projects in Egypt, Qatar and Lebanon among others, with further aggressive expansion plans.

EXPANDING EMIRATESWe noted the growing prominence of other emirates last year that were leveraging their proximity to Dubai. Ras Al Khaimah is notable in its advancement, with its GDP growing from $1.7 billion in 2001 to $2.5 billion in 2005, with mining, manufacturing and real estate all showing strong growth.20

In RAK, ‘the rising star of the UAE,’ tourism and real estate sectors have been the most active to date, both taking advantage of the emirate’s 40 km coastline, rugged Hajjar mountains and property prices 40% below rates in Dubai.21 RAK Properties, Rakeen, Orascam and Saraya are all actively developing projects in RAK.

Ajman, marketing itself as a place to get away from busy city life, has one of the UAE’s most active property sectors. Close to 200 residential towers are either under construction or have been completed since 2004. Many consider Ajman the new Sharjah. Prices are said to be four times lower than those in Dubai.22

Fujairah is another quiet emirate moving forward swiftly. Its striking landscape and Indian Ocean beachfront make for an idyllic spot, as this emirate focuses on becoming a resort and hospitality destination. This year’s successful sales launch of Mina Al Fajer, a $164 million mountain-sea resort property, which will include a 200 room five-star hotel managed by Fairmont Hotels & Resorts, is an indication of more to come.

EXPANDING INTERESTSAs the development market matures, interests are expanding into different areas of real estate. In 2004, investors were generally seeking vacant residential land. In 2005, people were looking for residential buildings to purchase and in 2006 investors were favoring built commercial buildings, as their return on investment was fastest.23

EMERGING

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DUBAI

2015“WE HAVE TO MAKE HISTORY… NOT WAIT FOR

THE FUTURE TO COME TO US”HH SHEIKH MOHAMMED BIN RASHID AL MAKTOUM

ABU DHABI

2030

2.5 MILLION RESIDENTS40 MILLION VISITORS

110,000 HOTEL ROOMS650,000 RESIDENTIAL UNITS

Dubai has already established itself as a model future city, with visionary expansion plans and continued diversification. Dubai is concentrating on sectors of strength including tourism, transport, trade, construction and financial services and has prioritized social development, infrastructure and security/safety to ensure that it matures into a vibrant cosmopolitan city of high standards and quality.37

“THOSE WHO FORGET THEIR PAST, COMPROMISE THE FUTURE”

HH SHEIKH ZAYED BIN SULTAN AL NAHYAN

3 MILLION RESIDENTS7.9 MILLION VISITORS74,500 HOTEL ROOMS

686,000 RESIDENTIAL UNITSThe capital, Abu Dhabi, is emphasizing culture, people and environment. It is looking to enrich the city and promote balance, focusing on low income housing, public transportation and a green orientation.With size, commitment and money to spend, Abu Dhabi is seeking to preserve the richness of its culture and not assimilate into a generic destination. It is proudly building a world-class city of excellence.38

DUBAI 2015 AND ABU DHABI 2030 ARE MACRO VIEWS OF A BOLD

TOURISM TRANSPORTATION CONSTRUCTION FINANCIAL SERVICES

SOCIAL DEVELOPMENT

INFRASTRUCTURE CULTURE TRANSPORTATION ENVIRONMENT PUBLIC HOUSING

SOCIALDEVELOPMENT

SUSTAINABILITY

BRIGHT FUTURE ACROSS INDUSTRY, ENVIRONMENT AND ECONOMY

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THE REGION ATA GLANCEDUBAI AND NEIGHBORING REGIONS ARE BENEFITING FROM CONSUMER CONFIDENCE IN THE EMIRATE. INVESTORS ARE DIVERSIFYING THEIR PROPERTY HOLDINGS WHILE END-USERS ARE RETREATING TO OTHER UP-AND-COMING AREAS IN THE UAE AND GREATER GCC. IN PARTICULAR, COMPETITION IS HEATING UP BETWEEN ABU DHABI AND DUBAI TO CREATE BENCHMARK-SETTING, HIGH-PROFILE PROJECTS.

DUBAI, UAEDubai’s residential and commercial space pipelines are still rich, with planned or underway projects valued at $318 billion over the next decade.27 In the residential sector, many experts predict that demand will continue to outpace supply. Resultantly, home sales and rental prices continue to rise considerably. It is reported that apartment rental rates increased 2% on average, whereas villas have increased 12% in the second quarter of 2007.28 The promising news for consumers is that home financing options are more readily available and fixed rental contracts are on the horizon.

2007 UPDATES & MILESTONES• THE FIRST VILLAS AND SHORELINE APARTMENTS ON THE

PALM JUMEIRAH WERE HANDED OVER• ALL THREE PHASES OF BUSINESS BAY SOLD OUT• THE REVISED MASTERPLAN OF THE PALM DEIRA WAS UNVEILED• THE QE2 WAS PURCHASED BY ISTITHMAR• BURJ DUBAI BECAME THE WORLD’S TALLEST FREE-STANDING

STRUCTURE, AT 150 STORIES• THE FIRST JUMEIRAH BEACH RESIDENCE UNITS WERE

HANDED OVER TO RESIDENTS • DAMAC LAUNCHED SIGNATURE RESIDENCES.• DUBAI WORLD CENTRAL PHASE 1 CONSTRUCTION BEGAN

MUSCAT, OMANAs in many of the other GCC countries, land and property prices are on the upsurge in Oman. As increasing numbers of expat workers move to the country and more and more Omanis choose to rent rather than build homes, demand in the rental market is growing.29 According to the Times of Oman, rental prices rose 12%-15% in 2006, most severely in Muscat.30

2007 UPDATES & MILESTONES• THE WAVE LAUNCHED ITS LATEST COLLECTION OF FIRST-

OF-ITS-KIND PROPERTIES AT SINESLA ISLAND, THE FIRST RESIDENTIAL ISLAND NOT ONLY ON THE DEVELOPMENT, BUT ALSO IN THE SULTANATE

• THE BLUE CITY ANNOUNCED ITS DEVELOPMENT TIMETABLE, WITH THE MASTERPLAN AND INITIAL ARTISTS’ IMPRESSIONS OF THE FIRST PHASE TO BE REVEALED IN OCTOBER

• THE COUNCIL OF MINISTERS ANNOUNCED A 15% CAP ON RENT HIKES FOR TWO YEARS31

• OMAN’S SHANGRI-LA BARR AL JISSAH RESORT AND SPA, INCLUDING THREE HOTELS, OPENED JUST OUTSIDE MUSCAT

MANAMA, BAHRAINDevelopers are hustling to build residential and office space to support the emerging financial centers of Bahrain World Trade Center, Bahrain Financial Harbour and Bahrain Investment Wharf. There is considerable buzz around the mixed-use projects in the pipeline driving foreign investment and attracting tourism. Still, native Bahrainis await more affordable sale and rental options to come onto market.

2007 UPDATES & MILESTONES• LULU ISLAND WAS RELAUNCHED AS REEF ISLAND• BAHRAIN BAY WAS OFFICIALLY LAUNCHED WITH THE

UNVEILING OF ITS MASTERPLAN• AMWAJ ISLANDS HAS A NEW CORPORATE IDENTITY INTENDED

TO RAISE INTERNATIONAL AWARENESS• CONSTRUCTION OF THE FIRST FOUR SEASONS HOTEL IS

UNDERWAY • RIFFA VIEWS CONTINUES TO SELL THE KINGDOM’S PREMIER

GOLF COMMUNITY VILLAS • THE LOST PARADISE WATER PARK AND BANYAN TREE SPA

RESORT WERE LAUNCHED AT AL AREEN • MARINA WEST, A DEVELOPMENT WITH 11 RESIDENTIAL

TOWERS AND A MARINA ON THE CAUSEWAY THAT CONNECTS KSA TO BAHRAIN, WAS ANNOUNCED

ABU DHABI, UAEAbu Dhabi has made recent headlines with the announcement of a number of cultural projects on Saadiyat Island connected to world-renowned establishments and architects. The emirate is becoming a bustling metropolis, not only through building cultural attractions but also in offering more affordable residential prices (for now). As reported by HSBC Global Research, average residential property prices are almost 10% cheaper in the UAE capital than in Dubai.26

2007 UPDATES & MILESTONES• FRANK GEHRY IS DESIGNING THE GUGGENHEIM ABU DHABI, AND ZAHA HADID IS THE ARCHITECT

BEHIND THE PERFORMING ARTS CENTRE• IN ITS FIRST INTERNATIONAL EXPANSION, THE LOUVRE WILL COME TO ABU DHABI AND BE DESIGNED

BY JEAN NOUVEL • TADAO ANDO IS DESIGNING THE MARITIME MUSEUM TO SHOWCASE THE CAPITAL’S MARITIME HISTORY• THE DESIGN OF THE INFRASTRUCTURE OF AL REEM ISLAND IS NEARLY COMPLETE • FERRARI WILL CONSTRUCT THE FERRARI THEME PARK ON YAS ISLAND • CAPITAL CENTRE LAUNCHED ABU DHABI NATIONAL EXHIBITION CENTRE (ADNEC) AND BEGAN SELLING

LAND PLOTS

DOHA, QATARConstruction of large-scale, mixed-use developments is booming in Qatar. Communities are nearing city proportions, with The Pearl expected to house upward of 40,000 people. It is estimated that real estate demand is four times that of supply.24 Development professionals in the country believe that the continued rise in prices is due to increased costs associated with legislated mandates to improve construction standards along with the practice of subletting by middlemen to expat workers.25

2007 UPDATES & MILESTONES• AT THE PEARL, THE CREATION OF THREE COVES, 32 KM OF

SHORELINE, NAVIGABLE CANALS, AND FLOODING OF THE 3 MARINAS HAS BEEN COMPLETED

• THE PEARL ALSO UNVEILED THE OYSTER SALES AND MARKETING CENTRE, ITS TECHNOLOGICALLY ADVANCED SALES AREA SHAPED LIKE THE SHELL OF AN OYSTER

• AT LUSAIL, A SIGNIFICANT NUMBER OF LAND PLOTS HAVE BEEN SOLD AND THE FIRST RESIDENTIAL PROPERTIES AND OFFICES ARE SLATED FOR OCCUPATION IN 2010

• SAMA DUBAI IS CREATING “DUBAI TOWERS,” A CONCEPT TO EXPORT DUBAI TO DOHA AND OTHER CITIES AROUND THE WORLD

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THIS YEAR’S BUZZ: ENVIRONMENT & SUSTAINABILITYAs evidenced by this year’s Cityscape Dubai “green” theme, all eyes are on sustainability in the Gulf. The UAE will soon launch a green building code, modeled on the US Leadership in Energy and Environmental Design (LEED) system. While the Green Community pioneered this in the region, developers are abuzz with planning eco-friendly and sustainable projects. Sustainability is becoming tablestakes for serious developers. They cite advantages for all involved:

• Regional governments can set new international standards• Cities can reduce energy and water consumption• Corporate tenants and home owners can reduce operating and energy costs• Clean energy and environmental technology companies can push forward their work

CEOs and development executives across the region are championing the growing cause:

“ AT SAMA DUBAI, WE RECOGNIZE THAT OUR OPERATIONS HAVE A PROFOUND ENVIRONMENTAL IMPACT. OUR GOAL IS TO SOLICIT INCREASED PARTICIPATION IN SUSTAINABLE ENVIRONMENTAL PRACTICE. FROM THE ONSET, OUR VISION HAS BEEN TO CREATE A COMPANY THAT FOCUSES NOT ONLY ON THE SINGLE-MINDED PURSUIT OF RETURNS, BUT ON A BROADER AGENDA THAT INCLUDES RESPECT FOR EMPLOYEES, ENGAGEMENT WITH THE COMMUNITY AND CONCERN FOR THE ENVIRONMENT.”32

— Farhan Faraidooni, CEO, Sama Dubai

“ NAKHEEL HAS THE LARGEST IN-HOUSE DEDICATED ENVIRONMENTAL TEAM OF ITS TYPE IN THE REGION, AND ISSUES OF ENVIRONMENTAL SUSTAINABILITY HAVE BEEN A FUNDAMENTAL FOCUS FROM THE COMPANY’S INCEPTION.”33

— Chris O’Donnell, CEO, Nakheel

“ WE RECOGNIZE THE IMPORTANCE OF SHARING AND PROTECTING OUR ENVIRONMENT. BAHRAIN BAY IS COMMITTED TO HELPING DEVELOP A COMMERCIALLY SOUND AND ECOLOGICALLY VIABLE APPROACH TO DEVELOPMENT.”34

— Bob Vincent, CEO, Bahrain Bay

“ THE BUILT ENVIRONMENT HAS A VAST IMPACT ON THE NATURAL ENVIRONMENT, AFFECTING HUMAN HEALTH AND ECONOMY. IF DEVELOPERS ADOPT GREEN BUILDING STRATEGIES, THEY CAN NOT ONLY CONSTRUCT SUSTAINABLE COMMUNITIES WITH INDOOR ENVIRONMENTAL QUALITY, BUT CAN ALSO SUPPORT THE PRESERVATION OF ENERGY AND WATER RESOURCES.”35

— Hashim Al Dabal, CEO, Dubai Properties

LEISURE LIFESTYLETHE GULF’S REAL ESTATE BOOM CONTINUES TO ATTRACT A GROWING INTERNATIONAL AUDIENCE. THE REGION’S CLIMATE, INFRASTRUCTURE, SOPHISTICATED ATTRACTIONS AND SHOPPING ARE MAKING IT A PREMIER LEISURE DESTINATION FOR LOCAL, REGIONAL AND INTERNATIONAL VISITORS.

With tourism growth more than 20% higher than the worldwide average, the region is continuing to become a thriving destination.

From the continued development of premier golf courses, luxury marinas, yacht clubs, special retail complexes and famed restaurants, leisure is becoming a key development focus and an area of opportunity. The bar is continuing to be raised on exceptional hospitality and lifestyle amenities, from their size and scale to famous names and distinctive design.

A variety of support products are appearing across multiple price points to a hungry marketplace of visitors and occasional residents. From timeshares, fractional ownership, private club residences and condo hotels to serviced apartments, destination clubs and private leased resort villas, a more sophisticated and segmented range of offerings is presenting itself.

Gulf nationals will spend $1 billion on shared leisure ownership over the next 12 years, indicating the growing significance of this segment.36

While some will choose to purchase a vacation or second home amid scenic golf courses or in a soaring tower above a vibrant marina, leisure will continue to play a critical role in owner value creation and experience.

THERE ARE MANY PROJECTS IN THE GULF ADDRESSING SUSTAINABILITY OR ENVIRONMENTAL ISSUES IN THEIR MESSAGING:

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Name PETROV DOM ONE HYDE PARK 55 WALL STREET LE REVE ST. REGIS PARAMOUNT BAYTRUMP INTERNATIONAL

HOTEL & TOWER

Developer Group Yress Candy & Candy Witkoff Group & Cipriani Dubai Luxury Homes/Arabtec Construction

Starwood Hotels & Resorts Worldwide, Inc., Grupo 1818, Ideurban

Royal Palm Communities Talon International Development

Country

Architect AM Alexandrov and Partners Rogers Stirk Harbour & Partners

Isaiah Rogers, McKim, Mead & White, Tsao & McKown (interiors)

Atkins, YS Space Singapore, KCA London, WA International Dubai (interiors)

Cesar Pelli and Associates, Yabu Pushelberg (interiors)

Arquitectonica, RTLK (interiors)

Zeidler Partnership Architects

Floors 10 14 9 50 31 46 70

# Units 28 86 106 82 100 346 438

Completed 2006 2010 (expected) built 1836, renovated 2006 2006 2007 (expected) 2009 (expected) 2010

Building amenities

gazebos winter gardens 24-hour security video surveillance underground parking underground storage

gyms & spaswimming poolssquash courtprivate wine-tasting facilityroom servicebusiness center24-hour concierge3 boutiquesunderground parking with license plate recognitionprivate elevatorscovered garden spaces

24-hour doormanCipriani butler housekeepingpreferred access to onsite Cipriani restaurantfitness centercourtyard & rooftop gardenprivate storagepersonal shopping servicespost and messenger services(additional amenities available to Cipriani Club members)

gym & spa24-hour securitysuites for guestsconciergevalet parkingroof gardenbutler and maid servicespecially decorated high speed elevators

gym & spa (Remede)boutiquesrestaurantsconciergeSt. Regis Butler Servicepersonal chefwine cellarballroommeeting roomsbusiness center

gym & spapoolconciergetechnology concierge butler servicescreening roombusiness centerParamount Style Clubadjoining courtyard with shops and restaurants

24-hour personal concierge24-hour valet 24-hour room servicepersonal attaché servicedaily housekeeping daily laundry servicein-room diningspapool fully-equipped gymthree restaurantsbusiness center

Unit details panoramic windows, balconies, fireplace, mosaic tiles, central air, satellite TV, Internet

penthouse apartments have bullet proof windows, specially purified air, iris scanners andpanic rooms

classic, sleek and eclectic residence styles fully furnished with furniture to choose from

13-foot ceilings, wireless Internet, smart home technology, kitchen appliances by Ricci Milan of Italy

mosaic details and stone countertops in kitchen, opaque marble floors, onyx sink and Jacuzzi in bathroom, help quarters in some units

wireless touch screen technology, stone countertops, Sub-Zero refrigerators and other brand name fittings, energy efficient appliances

11-foot ceilings, floor-to-ceiling windows, formal living & dining rooms, designer kitchen, electric fireplace, wireless

Starting price $6,600,000 $8,100,000 $2,850,000 $4,100,000 $657,000 $3,050,000 $2,555,000

Price per sq.ft. $1,905 up to $8,427 $1,398 $663 $1,000 $997 up to $1,210

Key messaging

“ Privacy and luxury in a historical setting”

“ A new residential scheme whose beauty, luxury and prestige will place it in a class of its own”

“ Whatever your personal style – own the good life – Cipriani-style”

“Living the Dream” “A new view of Mexico City” “Destination Lifestyle” “ An incredible new standard in luxurious living”

SAMPLING GLOBAL CONDO LUXURY

INSIGHTSRELATIVE TO OTHER MAJOR INTERNATIONAL MARKETS, DUBAI REMAINS A BARGAIN. TODAY, THE PRICE FOR A LUXURY CONDOMINIUM CAN EASILY SOAR ABOVE THE $1,000 PER SQ. FT. MARK.

MOSCOW, LONDON AND NEW YORK RANK AS SOME OF THE MOST EXPENSIVE CITIES IN THE WORLD TO LIVE IN, AND THE PRICES OF THE EXAMPLES LISTED HERE REFLECT THAT STATUS. SO WHAT CAN $1,000 PER SQ. FT. GET YOU RELATIVE TO DIFFERENT CITIES? FOR THAT PRICE, YOU CAN BUY NEARLY DOUBLE THE SPACE IN DUBAI THAN YOU CAN IN NEW YORK CITY. ADDITIONALLY, YOU GET BUILDING AMENITIES SUCH AS CONCIERGES, GARDENS, SPAS, GYMS AND YOUR OWN STORAGE SPACE.

BEYOND THESE CATEGORY-WIDE SERVICES, CONSUMERS ARE DEMANDING MORE NICHE LIFESTYLE ELEMENTS, INCLUDING SCREENING ROOMS, WINE CELLARS AND PRIVATE CLUBS. THEY ARE ALSO LOOKING FOR DETAILED INFORMATION ABOUT EACH UNIT — FROM APPLIANCE NAMES TO MATERIAL USED FOR SURFACES IN EACH AND EVERY ROOM AND MONTHLY SERVICE CHARGES.

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In a single travel magazine with international readership, there are 16 real estate ads for GCC properties that all center on a luxury message. The majority of real estate ads attempt to sell luxury through their images of rich interiors, relaxed residents and buildings that soar to great heights. Many also incorporate the words “luxury,” “deluxe” and “luxurious” explicitly into their descriptions of amenities and lifestyle.

1

7

65432

108 9 11 12

1614 1513

PROLIFERATION OF LUXURY

BRANDS HAVE BEEN REMOVED FROM THESE ADS. CAN YOU GUESS WHICH ADS BELONG TO WHOM?

Answers: 1. Union Properties, Limestone House 2. Hircon International, 23 Marina Residences 3. Tamani Hotels and Resorts, Tamani Hotel – Marina 4. Damac, Wildflower 5. Bavaria Hotels International, Bavaria City Suites 6. Trident, Pentominium 7. Star Boutique 8. Durrat Al Bahrain 9. Ascott International, Somerset Al Fateh 10. Emirates Sunland, D1 11. Trinity Developers, La Mer 12. Hydra Properties 13. Tameer, Elite Residence 14. RAK Properties, Mina Al Arab 15. Trident Pentominium 16. Cayan, Infinity, Silverene

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PERCEPTUAL DRIVERS — MARKETING CHANNELSPERCEPTUAL DRIVERS — DEVELOPER ATTRIBUTES

29%17%

11%9%

6%5%5%

4%3%3%

2%2%

0%

1%1%

2%

Attention to details

High quality construction

Reasonably priced

Emaar 4.4

Nakheel 4.3

Aldar 4.1

Luxurious homes

Desirable locations Advertising

Videos

Website

Emaar 4.6

Nakheel 4.3

Y. K. Almoayyed

Brochures

4.3

Emaar 4.5

Nakheel 4.3

Aldar 4.1

Emaar 4.6

Nakheel 4.3

Aldar 4.2

Emaar 4.5

Nakheel 4.4

Aldar 4.3

Emaar 4.7

Nakheel 4.4

Aldar 4.0

Emaar 4.6

Nakheel 4.2

Aldar 4.1

Emaar 4.7

Nakheel 4.3

Damac 4.2

Emaar 4.6

Aldar 4.3

Nakheel 4.2

Sales center

Emaar 4.6

Nakheel 4.3

Aldar 4.1

QUANTITATIVE PERCEPTIONS

Best Developer

Best Waterfront Community

Best Island

Community

Best Communityfor Families

Best Overall

Community

Best Golf Community

FutureBrand worked with a global independent research firm to conduct a quantitative study of 300 home buyers and

development professionals in the UAE and Bahrain. This research allows us to better understand attitudes and perceptions

of communities and developers, along with the factors that influence purchase decisions.

This graph portrays the relative importance of various marketing channels in influencing attitudes toward a developer. The developers on the right are the best performers.*

“Attention to details” is the most important attribute of a developer, and Nakheel, Emaar and Aldar stand out as the developers perceived to be the best performers against this.

Sales centers and advertising are the two most important marketing channels. Sales centers create a cohesive, unmistakable impression of a project, while advertising creates awareness and a presence for a developer in the marketplace.

This chart depicts the relative importance of developer attributes in terms of their ability to predict a home buyer’s or building professional’s predisposition toward a developer. On the right, are the top scorers against key attributes.*

Attention to detailsHigh quality construction

Access to roadsReasonably priced

Favorable financing termsSecure

Luxurious homesDesirable locationsPremium amenities

Most iconic/innovative homesOn time delivery

Well-planned unitsAffordable homes

Spacious homes Sufficient parking

Technology friendly

25%

2%

5%

5%

6%

7%

8%

9%

12%

21%

Sales center

Advertising

Overall service before the sale

Responsive service after the sale

Model showrooms or model villa

Professional/courteous salesperson

Videos

Website

Brochures

Service over the phone

*Five-point performance scale: from 1 = unacceptable to 5 = great. *Five-point performance scale: from 1 = unacceptable to 5 = great.

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DEVELOPERS CONSIDERED (WITHIN OWN COUNTRY)

Consideration is the most important precursor to purchase. This finding shows the degree to which prospective buyers are predisposed to buying from various developers.

In terms of level of consideration, Emaar and Nakheel are comparable.

THE SHOPPING PROCESS

The following chart details how many potential buyers explored and researched their interests throughout the home buying process.

Making inquiries and visiting a sales center are the most popular explorations for those seeking to purchase a home.

DEVELOPER CONVERSION EFFICIENCY

Conversion efficiency speaks to each developer’s ability to convert consumer familiarity into buyer consideration.

Three of the second-tier ranking brands, Sorouh, Dubai Properties and Damac, rise to the top as the most efficient developers, while industry leader Emaar falls to the bottom of the leading brands.

DEVELOPER FAMILIARITY

Familiarity is an important attribute and is based on the percentage of end users and building professionals who know a developer well enough to have an opinion about the company.

Emaar and Nakheel are the dominant brands in this ranking, although Emaar leads by a statistically significant percentage.

DEVELOPER RELIABILITY

Perceived reliability is an important driver of both purchase and brand loyalty, especially in a region known for delays and limited information. Note the low percentages, compared to familiarity and consideration levels.

Emaar, with a relatively low percentage of perceived reliability, is ahead threefold over the next brand, Nakheel. The numbers suggest that most respondents do not feel that developers today are reliable in their offerings.

ADDITIONAL INSIGHTS

• Technology friendly, well-planned units and premium amenities are attributes that the industry typically performs well against. However, these attributes are of lesser importance according to the research, indicating that the industry may be over-allocating resources to achieve high performance here.

• Attention to details, high quality construction and luxurious homes emerge as the three primary leverage points in the category: they are comparatively important and the industry performs well against them. Attention to details is still an opportunity area because it is the single most important attribute, yet industry performance against it is only a little above average.

• Three of the leading brands in the region — Emaar, Nakheel and Damac — stand out as having higher levels of familiarity with women than with men. However, these developers are similar to the industry standard in that men are significantly more likely than women to rate them as being “a brand for someone like me.” This suggests there may be an opportunity to enhance the effectiveness of a developer’s overall marketing program by finding ways to improve their relevance to women.

• Emaar has become the dominant brand in the category. The company’s familiarity is 40% higher than that of the next leading brand, and it is the highest rated brand across each of the 16 developer attributes, with an average rating of 4.5 out of 5.

• Nakheel has emerged as the strong #2 brand in the region. While Emaar is 40% more recognizable, Nakheel’s familiarity is 164% higher than the #3 brand. Further, with an average rating of 4.3 out of 5 across all 16 developer attributes, Nakheel’s brand image is not far behind Emaar’s.

58%Emaar

Nakheel

Damac

Dubai Properties

Aldar

Sorouh

Y.K. Almoayyed

48%

43%

18%

16%

11%

10%

8%

Sorouh

Dubai Properties

Damac

Nakheel

Aldar

Y. K. Almoayyed

Emaar

91%

84%

82%

74%

69%

62%

59%

Emaar

Nakheel

Aldar

Y. K. Almoayyed

Damac

Dubai Properties

Sorouh

25%

8%

3%

6%

6%

3%

3%

Emaar

Nakheel

Damac

Dubai Properties

Aldar

Y.K. Almoayyed

Sorouh

81%

58%

22%

19%

16%

13%

11%

48%

65%Made sales inquiry and obtained brochures

58%Visited a sales center and met a salesperson

41%Performed financial assessment of a specific home to purchase

48%Saw a model flat or model villa

55%Explored available financing options DERIVED IMPORTANCE METHODOLOGY

The relative importance of developer attributes and marketing channels was determined using multivariate regression. Asking research respondents their opinions about what is important is simply not reliable or accurate, as what people say and what they do are typically not aligned. Multivariate regression examines patterns in the data to identify how perceptions and attitudes correlate with preferences.

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1. PHONE LETTER GRADE: DTHE PHONE REMAINS A WEAK POINT OVERALL ACROSS THE INDUSTRY. CUSTOMERS EXPERIENCED DIFFICULTY REACHING A SALES CENTER OPERATOR ON THE FIRST CALL, AND ONCE THE PHONE WAS ANSWERED, OPERATORS AND SALESPEOPLE WERE NOT ALWAYS PROFESSIONAL.

HELLO, CAN I GET SOMEONE TO PLEASE PICK UP?

Nakheel: “The call was answered by an automated answering machine that kept the customer on hold for three minutes before transferring to the customer service agent.”

Hydra Properties: “The call was answered by an automated answering machine within one ring … When the operator answered the phone, she advised the customer that all of the salespeople were busy and asked the customer to call the salesperson’s cell phone.”

Shaikh Holdings “… the customer called again and reached a salesperson who said he was busy and would call back. The salesperson didn’t seem interested, didn’t ask questions and didn’t call back.”

Emir ates Sunland: “ The operator answered the phone promptly, but her opening remarks were very short and unwelcoming.”

Mina Al Fajer: “A polite receptionist answered the call after two rings but did not transfer the call to arrange for an appointment. The receptionist made it very clear that it was not possible to visit the sales center as a non-local, that only locals were entitled to buy property at Mina Al Fajer.”

Durrat Al Bahrain: “The customer first called on Saturday and there was no answer at all. When the customer reached a salesperson the next day … the salesperson did not give any information on the project at all and did not ask the customer about relevant information in order to prepare for their meeting the following day.”

2. SALES CENTERS LETTER GRADE: B+PROFESSIONAL SALES CENTERS GENERALLY INSTILL CONFIDENCE. SEEING A VIBRANT, TANGIBLE PLACE WHILE A DEVELOPMENT IS YEARS FROM COMPLETION HELPS OFFSET BUYER ANXIETY.

A STRONG SALES CENTER HAS BECOME COST OF ENTRY

Damac: “The sales center reflected an impressive look from the entrance. The area was very professionally maintained. The meeting room displayed two flat screens with Internet connection to show live relay of the Dubai and Abu Dhabi stock market indices.”

Trident: “The sales center was spotlessly clean and well organized. There were materials displayed about the project being inquired about. It gave a positive impression of the project.”

Emaar: “There were dedicated parking spaces for Emaar customers a few yards away from the sales center. The exterior of the sales center was welcoming and well organized for visitors. The atmosphere was very professional.”

ETA Star: “The receptionist greeted the customer with a smile and escorted the customer to the meeting room. The salesperson arrived promptly and w a r m l y w e l co m e d t h e c u s t o m e r , offering refreshments and discussing the customer’s profession.”

Dubai Properties: “The exterior of the sales center was very nice and well designed. It gave a good impression of the project. The reception area was spacious, airy and welcoming.”

Sama Dubai: “The overall sales center exterior gave a good impression. There were clearly displayed materials about the development the customer had inquired about.”

3. SALESPEOPLE LETTER GRADE: CA CRITICAL COMPONENT, SALESPEOPLE ARE ABLE TO MAKE OR BREAK A BUYER’S IMPRESSION OF THE PROJECT. CONFIDENT, ANSWERING QUESTIONS AND FOCUSING ON THE CUSTOMER, THEY ARE THE HUMAN EMBODIMENT OF THE DEVELOPMENT.

PERFORMANCE IS INCONSISTENT; SOME SALES TEAMS SHINE

Trident: “The customer was approached immediately on arrival and welcomed with a smile. There was no visual display, model of the project or video, and the meeting wasn’t loosened up by any small talk.”

Abyaar: “The salesperson was focused and maintained eye contact on a constant basis. He explained the project in the finest detail and gave a good impression of the project. He also directly accepted the customer’s request for a written proposal and sent one immediately.”

Omniyat: “The salesperson did not discuss the customer’s buying objectives or desired housing size. However, his confidence and knowledge of the project were quite impressive.”

City of Arabia: “The employees were friendly and experienced. They were focused on the client. The salesperson was able to explain the brand and describe the amenities, views and project assets.”

Riffa Views: “The project was presented as quite appealing. However, the focus of the salesperson was directed to sell the largest villa, whereby the customer repeatedly mentioned looking for a smaller villa or semi-attached house.”

CUSTOMER EXPERIENCE

INDEPENDENT MYSTERY SHOPPERS WENT ON THE HUNT FOR A NEW HOME, INVESTIGATING 25 DEVELOPMENTS ACROSS THE GULF.

4. COLLATERAL LETTER GRADE: C–THE ONLY THING A POTENTIAL BUYER WILL TAKE HOME, REVIEW AND RE-READ IS THE MARKETING MATERIALS HE RECEIVES. MAKE SURE THESE MATERIALS FURTHER THE EFFORTS OF THE SALES CENTER AND SALES TEAM EXPERIENCES, AND LEAVE A FAVORABLE IMPRESSION.

MARKETING MATERIALS ARE TYPICALLY PROFESSIONAL ALTHOUGH OFTEN INCOMPLETE

Damac: “The customer was given a holding company brochure and xeroxed copies of project brochures in folders, unstapled.”

Mina Al Fajer: “The materials were well packaged and well presented.”

Aldar: “The package was reasonable. Professional an d accep table , but not breathtaking.”

Abyaar: “The brochure was oversized and striking. Not too convenient, and it fell apart, but it made a nice impression.”

Nakheel: “The materials and DVD were impressive, but no business card was offered to the customer.”

Emaar: “The brochure was professional, but the xeroxed and marked up price sheet seemed inappropriate and cheap.”

Mina Al Arab: “Comprehensive range of materials, but also corporate flyers thrown in.”

Sorouh: “Very glossy collection of materials, but they provided a lot of detail.”

SUMMARYIN GENERAL, THE CUSTOMER SALES EXPERIENCE WAS MUCH BETTER WITH DUBAI DEVELOPMENTS THAN ALL OTHERS, INDICATING THE RELATIVE MATURITY OF THE DUBAI MARKET. HOWEVER, THERE IS SUBSTANTIAL ROOM FOR IMPROVEMENT EVEN IN DUBAI, WITH THE SENSE THAT MUCH OF THE MARKET IS STILL ORIENTED MORE TOWARD INVESTORS WHO ARE NOT AS LIKELY AS END-USER BUYERS TO REQUIRE THE KIND OF HIGH-TOUCH SERVICE THAT COMPRISES A QUALITY CUSTOMER SALES EXPERIENCE.

SIMILAR TO LAST YEAR, BUYERS EXPERIENCED DIFFICULTY GETTING THROUGH OVER THE PHONE TO DEVELOPERS AND FOUND THAT LESS THAN ENTHUSIASTIC OPERATORS AND SALES PEOPLE OFTEN ANSWERED THE CALLS. SALES CENTER DESIGN WAS CONSIDERED IMPRESSIVE IN GENERAL, AND SALES MATERIALS AND COLLATERAL ALSO CONTRIBUTED POSITIVELY TO THE PERCEPTION OF THE PROJECTS, BUT WERE RARELY COMPLETE OR COMPREHENSIVE.

INTERESTINGLY, IT WAS THE SMALLER, SECOND-TIER DEVELOPERS THAT SHOWED UP AS THE STANDARD SETTERS OR BEST PERFORMERS IN DELIVERING A SUPERIOR BUYER EXPERIENCE. ONLY 3 OF THE 25 DEVELOPMENTS SURVEYED PROVIDED A COMPREHENSIVE SET OF BASIC PROFESSIONAL MATERIALS (I.E., BROCHURE, FLOOR PLANS, PRICE LIST AND BUSINESS CARD), SUGGESTING THE DIFFERENCE BETWEEN THE BEST AND WORST PRACTICES ACROSS ALL FOUR AREAS SURVEYED IS ABOUT GETTING THE BASICS RIGHT. THE “BAR” IS NOT ABOUT WORLD-CLASS, LEGENDARY SERVICE, BUT ABOUT DOING THE RIGHT THING CONSISTENTLY.

? ? ? ?

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DEVELOPERS THAT RECEIVED A FAILING GRADE FOR THEIR PHONE SERVICE

DEVELOPERS THAT RECEIVED A PASSING GRADE IN ALL 4 AREAS SURVEYED BY THE MYSTERY SHOPPERS

BEST AND WORST PRACTICESPHONEBEST PRACTICES• The operator picks up the call after 2-3 rings and responds in a

welcoming manner• The call is promptly transferred to a salesperson• The salesperson asks questions to determine the customer’s wants

and needs • The salesperson is very patient and calm with the customer • The salesperson suggests an in-person meeting and explains the

exact location and time of the follow-up meeting

WORST PRACTICES• An automated machine picks up the call after many rings• The call is not transferred to anyone• No one calls the customer back • The salesperson is impatient with or disinterested in the customer• The salesperson terminates the call as quickly as possible• The salesperson does not provide details for a follow-up meeting

SALES CENTERBEST PRACTICES• A parking space is provided that is close to the sales center• External areas are clean, nicely landscaped and well maintained• The receptionist greets the customer in a friendly manner• The customer is taken right away to a meeting room and offered

refreshments• The sales center and its furnishings are clean, comfortable and

in good condition• The sales center makes a good impression about the quality of

the project, engages the buyer and provides new information about the project

WORST PRACTICES• There is no dedicated parking area • There are construction materials around the building; the exterior

is not clean or well maintained• The receptionist does not greet the customer and does not behave

in a friendly manner• The sales office looks disorganized and neglected• Models of the development do not look attractive or appear

professionally designed• The sales center creates serious doubt about the project

CUSTOMER EXPERIENCE

MEETINGS AT WHICH THE CUSTOMER WAS GIVEN A BUSINESS CARD

MEETINGS AT WHICH THE CUSTOMER WAS PROVIDED WITH A COMPLETE SET OF BASIC COLLATERAL

56%

12%

28% 4%

36%

SALESPEOPLEBEST PRACTICES• The appointment begins within five minutes of the customer’s

arrival to the sales center• The salesperson is focused on the customer, allowing the

customer to talk and listening to what he had to say• The salesperson uses a variety of multimedia tools: models,

photos and displays• The salesperson explains the project clearly and is able to answer

all customer questions• The salesperson is an expert on the project

WORST PRACTICES• Sales center employees are not friendly toward the customer• The salesperson does not greet the customer • The salesperson is interrupted by phone calls• The salesperson does not look the customer in the eye• The salesperson does not want to talk and does not ask questions —

the salesperson does not seem to care about the customer’s needs at all

• The customer has to request project materials at the end of the meeting

• The salesperson does not provide sufficient information about the project but refers the customer to the developer’s website for more information

COLLATERALBEST PRACTICES• Basic materials are provided• Materials are branded and professional• Materials are high quality, aesthetically pleasing and project a

positive image about the development• The materials are simple, easy to follow and compelling

WORST PRACTICES• The materials are not consistently professional• A manual printout of a brochure PDF is provided• The materials do not comprise a coherent set but rather look like

a variety of separate pieces thrown together• Production quality is poor• Brand imagery is gratuitous and has little or nothing to do with

the project concept

ADDITIONAL INSIGHTSPHONEIT IS CLEAR THAT A LITTLE CONSIDERATION WOULD GO A LONG WAY. THERE IS NOTHING MAGICAL OR EVEN DIFFICULT IN THE BEST PRACTICES HERE, YET FOR LACK OF ENSURING THAT THESE PHONE BASICS ARE PERFORMED, MOST DEVELOPERS IN THE REGION ARE PROVIDING A CUSTOMER EXPERIENCE THAT DOES LITTLE MORE THAN TARNISH THEIR BRANDS.

SALES CENTERA CRITICAL CHANNEL FOR DEVELOPERS, SALES CENTERS MUST BE IMPRESSIVE, WELCOMING, WELL MAINTAINED AND STAFFED BY PROFESSIONALS. GIVEN THEIR IMPORTANCE, MORE ATTENTION SHOULD BE PAID TO INNOVATIVE WAYS OF SHOWCASING THE DEVELOPMENT, FROM WHAT IT WILL FEEL LIKE TO LIVE THERE TO DEMONSTRATING WHAT MAKES IT SPECIAL.

SALESPEOPLEWITH THE GROWING COST OF HOMES AND THE INTERNATIONAL NATURE OF CUSTOMERS TODAY, THE PERSONAL CONTACT BUYERS HAVE WITH A RELIABLE AND REASSURING SALESPERSON IS PARAMOUNT. GETTING A CHANCE TO ASK QUESTIONS AND HAVE THEM EXPERTLY ANSWERED, FEELING REASSURED ABOUT PURCHASING IN A SPECIFIC DEVELOPMENT, AND HAVING A POINT OF CONTACT TO HELP NAVIGATE DECISIONS AND COMPLICATIONS IS VITAL. A PATIENT PEOPLE PERSON WHO IS KNOWLEDGEABLE, APPROACHABLE AND PROACTIVE IS ESSENTIAL.

COLLATERALPRODUCING PROFESSIONAL, QUALITY COLLATERAL THAT EXPLAINS THE DEVELOPMENT AND MAKES IT SPECIAL IS IMPORTANT. DON’T XEROX HANDOUTS FOR BUYERS AND DON’T RIP OUT DATED PAGES. KEEP IN MIND YOU’RE ASKING PEOPLE TO PURCHASE ONE OF THE MOST EXPENSIVE ITEMS THEY EVER WILL BUY.

METHODOLOGYMystery shoppers graded the phone, sales center, salespeople and collateral across 182 total criteria. Phone rankings are based on an average of 37 first call and first call impression criteria. Sales center rankings are the average of 26 facility exterior, reception and facility interior ratings. For salespeople, the rankings encompass 107 criteria, including the sales meeting process, sales meeting content, personal impressions from the visit and responsiveness when the customer is not in the sales center. Collateral rankings cover 12 criteria: ratings of each of four items — brochure, floor plans, price list and business card — based on the material being creative, quality oriented and branded/professional in look.

DEVELOPERS THAT RECEIVED A “B” GRADE OR HIGHER FOR THE PERFORMANCE OF THEIR SALES TEAM

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THE FUTURE OF

SALES ENVIRONMENTS COMMUNITY CLUBSOwners will be welcomed into an exclusive residents-only community with membership benefits that extend beyond the physical boundaries of their homes or neighborhoods. The developer will provide post-purchase incentives that support the brand and build loyalty. These could include on-call private transportation, priority to purchase limited-edition designer items, or access to premium events, spas, golf memberships or residents-only dining clubs with rotating celebrity chefs. Spread across the developer’s network of completed projects, the clubs would cater to all family ages and owners’ guests. Developers will see their community clubs as social nodes and anchors to the community, which first get introduced in sales environments.

A NEW DEFINITION OF EXCLUSIVITYAs access to luxury brands becomes more commonplace and consumers amass greater wealth, developers must further extend the idea of exclusivity. Developments will need to boast more one-of-a-kind amenities and innovations, including service-focused (post-occupancy) and site-specific features. Examples span leading design and superior construction materials and techniques. Unique features like membership to a rare vintage car collection or access to a world-class art library for homes will aim to differentiate brands. Site-specific features could include structural transformations of homes each season, greater utilization of innovative materials (as employed by the high-end retail sector), or hosting world-renowned cultural events exclusively for residents and invited dignitaries. These signature items will become centerpieces of marketing campaigns and will continue to raise global profiles. Sales environments will be microcosms for signaling all this richness.

TECHNOLOGY THAT TRANSFORMSResidents will experience a continued evolution in smart home technologies. The future technologies will be more predictive and able to gather information about living routines and then apply this information to anticipate needs better. All aspects of the living environment will be enhanced, from lighting, security, home networks and audiovisual media to new areas such as spatial transformation. Imagine controlling internal “light walls,” created as air-locked spaces that allow adjustable and customized unit layouts. The challenge for sales environments is to showcase technology in meaningful ways, sometimes up to five years before the community will exist. This length of time is an eternity in the technology world, and announcing any technology product requires careful planning to future proof effectively.

SOCIAL AND ENVIRONMENTAL RESPONSIBILITY AS A SELLING POINTAs we already see starting to happen, developers will increasingly take the lead on social and environmental responsibility. More and more, these issues will be viewed as a requirement of all developments, partly led by buyer demand, but mostly due to economic, social and moral necessity. Buyers will see the introduction of a customer rating system that provides a universal “sustainability index” for each home. Beyond carbon footprint statistics and LEED certification, buyers will be able to compare homes as they now compare cars and related gas consumption. Government rebates for performance against indices will encourage owners to invest in the early stages of adoption.

WELCOME TO THE AGE OF TOTAL CUSTOMIZATIONConsumers continue to be more involved in home building by choosing from a range of customization options. Potential buyers will form an emotional attachment to their new homes, facilitated by the personalization of each property to directly suit the buyer’s needs and desires. Developers will have a team of in-house designers and facilitators that will lead buyers through the process of transforming a raw product into a home. From exterior and interior aesthetic choices to feature-rich technology and appliance options, customers will feel empowered by the ability to decide among many varieties of features and build unique homes.

SALES ENVIRONMENTS ARE A CRITICAL COMPONENT OF A HOLISTIC BRAND EXPERIENCE AND SERVE AS A PRIMARY CHANNEL FOR MOST MARKETING PROGRAMS. ACCORDING TO RESEARCH COMMISSIONED FOR THIS STUDY, SALES ENVIRONMENTS (25%) ARE THE MOST IMPORTANT TOUCHPOINT IN INFLUENCING BUYER PREFERENCE, AHEAD OF ADVERTISING (21%), VIDEOS (6%) AND WEBSITES (5%). SO WHAT MAKES A GREAT SALES ENVIRONMENT? AND WHAT ROLE WILL SALES ENVIRONMENTS PLAY IN GUIDING THE BUYING PROCESS IN THE FUTURE?

WE BELIEVE SUCCESSFUL SALES ENVIRONMENTS IMPART A CLEAR AND ENGAGING MESSAGE ABOUT THE VALUES OF A DEVELOPMENT. SINCE MANY OF THE HUMAN SENSES CAN BE ENGAGED IN THESE ENVIRONMENTS, THE CENTERS CAN BECOME BOTH CHALLENGES AND OPPORTUNITIES. IN REAL ESTATE ESPECIALLY, CUSTOMER ENVIRONMENTS BECOME THE MANIFESTATION OF THE DESIGN AND QUALITY OF BUILT FORM DEVELOPERS AIM TO PRODUCE. IDEALLY, THE SALES ENVIRONMENT SHOULD BE AS ENGAGING AS IT IS INFORMATIVE, A POWERFUL TOOL IN SHAPING PERCEPTIONS, MOTIVATING BRAND COMMITMENT AND INFLUENCING PURCHASE. “THE FUTURE OF SALES ENVIRONMENTS” IS A SNAPSHOT OF RESEARCHED RETAIL ENVIRONMENT TRENDS COMBINED WITH FUTUREBRAND’S VIEWPOINT AROUND FIVE KEY AREAS OF FOCUS.

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KEY CONTACTS

RINA [email protected]+ 1 212 931 6443

WILLIAM [email protected]+ 971 4 367 8285

For more information about The Gulf Real Estate Study, purchasing customized research data, marketing seminars or FutureBrand’s services, please contact:

ADVICE FOR BUYERS AND BRANDS

FOR BUYERS• DUE DILIGENCE CONTINUES TO BE KEY.

INVESTIGATION OF PROJECT COMPLETION, SUPPORT FACILITIES AND INFRASTRUCTURE IS CRITICAL TO ENSURING YOUR HOME WILL BE REALISTICALLY READY WHEN YOU NEED IT TO BE.

• THE MORE MORTGAGE PROVIDERS THAT A DEVELOPER HAS MANAGED TO SECURE, THE MORE CONFIDENCE YOU CAN HAVE IN THE DEVELOPMENT.

• INVESTORS MAY WANT TO CONSIDER BUYING A PROPERTY THAT IS NOT NECESSARILY GLAMOROUS BUT IS LIKELY TO APPEAL TO THE MAJORITY OF THE WORKING POPULATION, AN UNDERSERVED AUDIENCE.

• HOTEL MANAGEMENT CONTRACTS ARE OFTEN RUN FOR 20 YEARS, SO SUPPLYING ACCOMMODATION FOR HOSPITALITY STAFF IS A GOOD LONG-TERM INVESTMENT VEHICLE.

• EXCELLENT OPPORTUNITIES EXIST IN THE NORTHERN EMIRATES FOR MORE AFFORDABLE HOMES AND SUPPORT OFFICE SPACE FOR THOSE SEEKING ALTERNATIVES TO DUBAI.

• IN ADDITION TO OTHER EMIRATES, QATAR AND BAHRAIN ARE OFFERING SOUND PROPERTY INVESTMENT OPPORTUNITIES AND ARE ATTRACTING CONSIDERABLE REGIONAL AND INTERNATIONAL INTEREST.

FOR BRANDS• THINK OF YOUR BRAND AS A SINGULAR

EXPRESSION. DON’T TRY TO BE ALL THINGS TO ALL PEOPLE. DECIDE WHAT IS MOST RELEVANT TO CONVEY TO CUSTOMERS AND KEY AUDIENCES, AND THEN RUN EVERY DECISION YOU MAKE — FROM DESIGN, MESSAGING AND COMMUNITY FEATURES TO BUILDING FINISHES AND AMENITIES — THROUGH THAT FILTER.

• A BRAND IS ABOUT CREDIBILITY. ROOT YOURSELF IN SOMETHING INHERENTLY TRUE. USE YOUR SURROUNDINGS AND DEVELOPMENT FOUNDATION IN AN AUTHENTIC WAY.

• STAY THE COURSE, PARTICULARLY IN A SATURATED MARKET. PEOPLE TEND TO WANT TO CHANGE A BRAND FOR THE WRONG REASONS (E.G., IT WAS INHERITED, IT HASN’T CHANGED). BRAND AWARENESS TAKES TIME AND CONSIDERABLE COST TO BUILD. YOU WANT TO PIGGYBACK ON EXISTING EQUITY AND NOT START ALL OVER AGAIN.

• THINK POST-SALE. YOU ARE CREATING A COMMUNITY THAT ENDURES. GETTING SOMEONE TO PURCHASE A HOME IS ONLY THE BEGINNING. FOCUS ON NURTURING THE CUSTOMER RELATIONSHIP FROM PAYMENT THROUGH HANDOVER. ESTABLISH COMMUNITY PRINCIPLES AND GUIDELINES THAT CAN LAST.

Disclaimer: All material presented herein is intended for informational purposes and has been compiled from sources deemed reliable including Developers, Sales Staff, Published Data, Ministry of Planning and Secondary Sources. Though content is believed to be correct, material presented is subject to errors, omissions, changes or withdrawal without notice.

MEDIA & EVENT PARTNERS

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12. Zawya, July 22, 2007

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14. NBK Economic Brief,

August 28, 2007

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and September 17, 2007

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30. AME Info, April 22, 2006


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October 5, 2006

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& Young Middle East Hotel

Benchmark Study, 2006 World

Tourism Organization data

38. Plan Abu Dhabi 2030, AME

Info, September 19, 2007

1. MEED Magazine,

September 7-13, 2007

2. AME Info, September 7, 2007

3. AME Info, February 12, 2007

4. Gulf News, February 4, 2007

5. Meed 2007 Dubai Residential

Real Estate Report

6. Gulf News, February 4, 2007

7. Arabian Business, May 30, 2007

8. Arabian Business, April 23, 2007


10. AME Info, August 28, 2006

SPONSOR

The Real Estate Division of Istithmar is the proud sponsor of this year’s Study.

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FutureBrand's 2007 Gulf Real Estate Study

Real Estate

Transcript of FutureBrand's 2007 Gulf Real Estate Study