Commercial Properties Price Index (CPPI)

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The Dubai Commercial Property Price Index (CPPI) has been created in partnership with Dubai Land Department (DLD) and JLL. It is the sole commercial price index in Dubai, which uses official transactions data recorded by the DLD to provide a broad measure of movement in sale prices for properties classified as commercial. It aims to provide valuable insights to investors and corporates on commercial property price trends in Dubai.

“Around 2,845 commercial property transactions worth AED 33.9 billion were recorded by the Dubai Land Department (DLD) in Q3 2021. ”

Key Figures
Key Figures

0.781

CPPI, Quarter (Q3 2021)

0.794

CPPI, Quarter (Q3 2020)
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Key Findings
Key Findings
  • In Q3 2021, the Dubai Commercial Property Price Index posted a value of 0.781 – flat when compared with the preceding quarter, but down 2% in annual terms. An imbalance between demand and supply, especially for Grade B and C office space.

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Index Methodology
Index Methodology

The CPPI aims to be a key benchmark in terms of analyzing the performance of commercial real estate. It will provide valuable insights to investors and corporates on commercial property price trends in Dubai.

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Key Figures

CPPI, Quarter, preliminary values

0.781

Index Q1 2016 = 1

Reference Period: 3rd Quarter 2021

-1.6 %

compared with the same period previous year

-0.3 %

compared with the previous period
Key Findings

Around 2,845 commercial property transactions worth, AED 33.9 billion were recorded by the Dubai Land Department (DLD) in Q3 2021.

Transaction volumes were up 1% when compared with the preceding quarter and stood 34% higher year-on-year.

These figures demonstrate that 2021 saw a significant pick-up in sales activity in this sector when compared with last year.

Sale transactions, which represent cash-bought commercial properties, accounted for the largest proportion of the overall volume of transactions registered in the third quarter of 2021.

Ready (existing) properties accounted for 86% of transaction volumes in Q3 2021. Off-plan sales comprised the remaining 14%.

In Q3 2021, the Dubai Commercial Property Price Index posted a value of 0.781.

The Dubai Office Property Price Index recorded a value of 0.822 in the third quarter of 2021.

Dubai’s Retail Property Price Index registered 0.883 in the first half of 2021.

Commercial Price Index (CPPI) - Methodology
Dubai commercial property price index is created using a hedonic regression model

We have applied the hedonic price methodology to construct the Dubai Commercial Property Price Index (CPPI). The hedonic method is an effective method to utilize data and construct constant quality CPPIs for various types of property.

In compiling the hedonic price index, we have selected the characteristics approach. This approach runs separate regressions for all time periods and the index is constructed by making use of predicted prices based on the regression coefficients. This approach is more flexible than the time dummy variable approach as the implicit characteristics can vary over time.

The overall CPPI and the office index will be calculated on a quarterly basis, whereas the retail index will be calculated on a semi-annual basis to provide regular insights into the commercial property market in Dubai.

Disclaimer

This report has been prepared solely for information purposes and does not necessarily purport to be a complete analysis of the topics discussed, which are inherently unpredictable. Any views expressed in the report reflect our judgment at this date and are subject to change without notice. Statements that are forward-looking involve known and unknown risks and uncertainties that may cause future realities to be materially different from those implied by such forward-looking statements. No investment or other business decisions should be made based solely on the views expressed in this report.

Full Methodology
Date: 04 Nov, 2021 Size: 249 KB File: PDF
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