La Riviera Estates

Jumeirah Village Circle

One Bed Room
AED 445,000 TARGET FUNDS
8.55% Current NET YIELD

Private & Confidential Slide 1

DISCLAIMER

This paper has been constructed for a specific purpose and is not intended for distribution to third parties. Third parties
who obtain copies of this paper, use it entirely at their own risk and, in the absence of express written consent, no
responsibility is taken or accepted for any losses which may result therefrom.

The value of your Smart Crowd investment can go down as well as up and historic performance is not a guide to future
performance. Achievement of rental and capital returns will depend on a range of factors including the property asset as
well as the wider economy. A fall in the value of your investment may be due to a number of reasons, such as a fall in
the underlying value of the property or a problem with the property that will need to be funded from future rental
income. Real estate investments can perform in a cyclical way, and values may increase or decrease accordingly.
Economic, political and legal issues can affect values as they would other asset classes. Any future downturn in the real
estate market could materially adversely affect the value and income generated from a property investment. Investors
are to individually assess and establish their level of comfort with this risk from the outset.

Smart Crowd Limited (Smart Crowd) is regulated by the DFSA. Smart Crowds. Investments in property and unlisted
shares carry a risk. Your capital may be at risk and you may not receive the anticipated returns. The estimates provided
in this paper are based on past performance and current market conditions, which cannot be regarded as an accurate
indicator of future results. You should do your own due diligence or consult with an independent third-party advisor.
Please review the full set of risk disclosure on our website www.smartcrowd.ae.

Private & Confidential Slide 2

THE EFFECT OF COVID-19 ON REAL ESTATE
Recent times are a stark reminder about the synergy between global markets and
Fig. 1: Moody’s Covid-19 Sector Impact
the unpredictability of daily life. We can seemingly do everything right and yet get
blindsided by an event like the Covid-19 pandemic. Unfortunately, there was simply
no way to predict its occurrence – it’s a classic black swan event (a regrettable rare
event).

The stock market crashed in a week while the residential real estate market, at
present, has remained relatively stable. In tough times people may cut back on
discretionary spending such as dining out, leisure activities, entertainment, and
alike, but they’re not going to cut back on necessities. People will always need to
eat and sleep, i.e., they’ll need the essentials and a roof over their heads.

While residential real estate is one of the strongest investment asset classes, it will
not be immune to the impact of Covid-19. Tenant’s may experience salary cuts or
worse, lose their jobs, management companies may be financially stretched due to
late payments, resulting in poorly maintained buildings. Buy-side demand is likely to
be depressed with investors choosing to delay deploying new capital or looking be
to capitalize on delinquencies. High-density business models trending globally such
as co-living, co-working, and holiday homes have come under pressure while Referencing Fig 1, Real Estate and REITS are considered to have low exposure
questions around hygiene and cleaning standards are fresh in end-users’ minds. when it comes to the immediate and ongoing impact of Covid-19 due to the
overriding requirement for bricks and mortar. However, REITS may be more
All being said, the variables mentioned above are all short-term consequences in susceptible to a negative impact as the values of which are closely correlated to
the grand scheme of things, economies and markets have proven to recover from the stock market. Further negative impact may be felt if portfolios are liable for
similar, if not worse, events over time and we view the current landscape as a great debt repayments or subject to increased investor withdrawals.
opportunity to put capital to work.
Moody’s baseline scenario, using data as of mid-March 2020, forecasts
When it comes to investing with SmartCrowd, our approach will be more normalisation in economic activity from H2 2020. However, given the unknowns
meticulous than ever. We take our work very seriously and feel as though we have a that still surround Covid-19 and the velocity at which information is changing on
fiduciary duty to our users. After all, we’ve been trusted with people’s hard-earned a daily basis, said forecast should only be used as a very loose guide.
money.
Source: JLL and Moody’s

Private & Confidential Slide 3

PROCESS

1 2

SmartCrowd lists the final

investment details on the SmartCrowd Investors
SmartCrowd platform with collectively commit 100% of
full internal and external the Target Purchase Price
reports

3 4

SmartCrowd Investors have

30 days to review the SmartCrowd completes the
investment details on the transaction or returns funds
SmartCrowd platform and to investor wallets
confirm their investment

This paper has been constructed for a specific purpose and is not intended for distribution to third parties. Third parties who obtain copies of this paper, use it entirely at their own risk and, in the absence of express written consent, no responsibility is taken or accepted for any losses which may result therefrom. Past performance is not indicative of future results.

The value of your SmartCrowd investment can go down as well as up and historic performance is not a guide to future performance. Achievement of rental and capital returns will depend on a range of factors including the property asset as well as the wider economy. A fall in the value of your investment may be due to a number of reasons, such as a fall in the
underlying value of the property or a problem with the property that will need to be funded from future rental income. Real estate investments can perform in a cyclical way, and values may increase or decrease accordingly. Economic, political and legal issues can affect values as they would other asset classes. Any future downturn in the real estate market could
materially adversely affect the value and income generated from a property investment. Investors are to individually assess and establish their level of comfort with this risk from the outset.

SmartCrowd Limited (SmartCrowd) is regulated by the DFSA. Investments in property and unlisted shares carry a risk. Your capital may be at risk and you may not receive the anticipated returns. The estimates provided in this paper are based on past performance and current market conditions, which cannot be regarded as an accurate indicator of future results.
You should do your own due diligence or consult with an independent third-party advisor. Please review the full set of risk disclosure on our website www.smartcrowd.ae

Private & Confidential Slide 4

EXECUTIVE SUMMARY
Following a high-level review, SmartCrowd has identified a one-bedroom apartment
located in Jumeirah Village Circle (JVC) as assets of investment interest. La Riviera
Estate is a gated community with two apartment blocks surrounded by townhomes.
The project in built by B&M Riviera Group a quality developer that has many projects Sensitivity Analysis Market Rent
under their belt across Dubai.
41,000 43,000 45,000 47,000 48,000
The expected acquisition price of the unit if AED 445,000 which equates to AED 596 per

Service Charges
sqft. This is approximately 10% below the current market average of AED 656.9 per (7,226) 7.04% 7.48% 7.91% 8.34% 8.55%
sqft.
(6,865) 7.13% 7.56% 7.99% 8.42% 8.64%
This fully furnished unit is currently rented until for AED 48,000 until May 13th, 2021.
This represent an annualized current gross and net yield of approximately 10.79% and (6,178) 7.28% 7.71% 8.14% 8.57% 8.79%
8.55%, respectively. The market average gross and net yields are approximately 6.98%
and 5.39%, respectively. Even with a 10-15% reduction in rent, the net yield will remain
over 7%, well above the market averages as demonstrated on the right in the sensitivity
table.
SmartCrowd Investors are requested to pledge their interest and commit funds to
The service charges are very reasonable for such a well-maintained community. This is acquire this one bedroom apartment within Jumeirah Village Circle. Upon raising the
one of the key factors protecting investors return and the service charge to rent ratio of Target Funds, SmartCrowd will identify and agree indicative terms on a property that
15.10% is the lowest we have witnessed in a very long time. Hence reduction in rent meets set KPIs, as detailed within this paper.
rate does not have a significant impact on the overall return. Have lower servicing costs
makes the unit more competitive in the current market to ensure high occupancy. This
building has an occupancy of over 90% and is among the best rated for investment
purposes.

This building is located close to a school in JVC making it attractive for families and
teachers working at the school. Its is also close to Exit #2 in JVC making it very
accessible to major highways. Lastly this two bedroom on the ground floor comes with
a nice patio/balcony opening up to the common podium with pool gym and green
space.

Private & Confidential Slide 5

EXECUTIVE SUMMARY
JUMEIRAH VILLAGE CIRCLE AED 445k 10.79%* 8.55%** 1 BHK
Due to Covid 19 pandemic number of ready apartment transactions in Dubai had Purchase Price Annualized Annualized Net TYPE
dropped off considerably in April to only 227 transaction compared to 887 in March 0f Gross Yield Yield
2020. The activity has returned to market with 278 transactions taking place in May
and 314 in the first half of June already. In the last 180 days Jumeirah Village Circle
Area JVC
ranks second most transacted area in all of Dubai just behind Dubai Marin and in the Building TBD
last 90 days it ranks in the top 5. Unit Type Apartment
Bedrooms 1 BHK
Also JVC has been one of the best performing areas since the market bottom of 2011.
The prices in JVC had risen by approximately 35% during that time only behind Floor TBD
Business bay that saw an increase of 45%. Furthermore it has witnessed the least Net Area PSF 747
amount of price depreciation since the 2014 peak. The prices in JVC have dropped by Balcony / Garden Balcony
only 10% compared to the Dubai average of 28% during the same time frame. This is
mainly because of its popularity and growth of JVC. The population in JVC has seen a
Parking 1 Basement Space
rapid rise over the last couple of years according to Reidin and continue to attract Other N/A
tenants and investors due to its affordability and amenities offered.
Purchase Price 445,000
The current average market rent for one-bedroom apartments in JVC is approximately Purchase Costs 27,076
AED 46,000. Even with approximately 10% reduction in the future the net yield will be 6,675
Transaction Costs
above 7%, well above the current market yield of 5.39%.
Other Costs N/A
There are expectations that the service charges might decrease in the future further Adjustments TBC***
protecting the net returns. Total Costs 478,751
Given the track record of the developer and the quality of the asset, this asset makes
*Gross Yield is calculated on the Purchase Price, exclusive of Purchase Costs and Transaction Costs
for a good investment option. Below is the sensitivity analysis on the returns based on **Gross Yield, less Service Charge, Management Costs and Insurance
varying rental and service charges. ***Rounded numbers are subject to the final Transfer Date. Adjustments such as service charge payments will be applicable
and reconciled, positive or negative, in the first dividend.

Private & Confidential Slide 6

Jumeirah Village Circles
JVC is an affordable, residential and commercial location from Master Developer
Nakheel, situated between the E44 and E311 highways, providing quick and easy AED 656.9 5.39%* 7.99%** 6.3%
access to areas such Jumeirah Lakes Towers, Al Barsha, Dubai Production City and
the upcoming Expo 2020 site. Average Price Average Net Annualised Return Supply Increase
PSF Yield Since 2011 by 2021
The community offers a wide range of low and high rise developments, delivered by
an array of private developers, adding a variety of unique architecture to the area.
According to the 2019 Dubai Real Estate Market H1 Report by Bayut, JVC is one of JVC Provides
the most popular areas in Dubai to buy and rent both apartments and villas. Adventure Activities
Park
Children’s Play Area
The neighbouring E11 highway, provides easy access to Jumeirah Lakes Towers via Community Retail
road (2km+), Media City (3.7km), Downtown Dubai (22.7km), and Abu Dhabi Fitness Centres
Hotels
(95km). Mall
Mosques
Recreational Centre
Jumeirah Village Circle attracts an equal mix of families, young couples and singles. Restaurants
Spas
JVC is an attractive destination for many due to abundance of schools, parks and Supermarkets
Hospital
fitness centers. This makes it’s a popular destination for investors due to its lucrative Schools

pricing and high rental yields from the area.

Further, its proximity to Dubai Marina and JLT and the lack of traffic makes
commuting to the city fuss-free. It’s easy to see why investors and renters are
interested in this community, leading it to be a benchmark for family-friendly
developments in the city.

Jumeirah Village Circle Dubai is home to over 2,000 residential units. The
development is fashioned as a series of villages connected by parks and canals, with
a mix of apartments, villas and townhouses. Most residential apartments in JVC
come with shared amenities including access to a gym, swimming pool and
launderette. As the area has many upcoming developments, JVC has a range
of brand new apartments up for rent.

Private & Confidential Slide 7

THE PROPERTY
Constructed by Riviera group in 2014, La Riviera Eastates apartments are nestled in
Jumeirah Village Circle one of the most popular areas in all of Dubai both for 1 1 747 AED 7,246
tenants and investors.
Bedroom Plus Garden (1) Gross Square Feet Service Charge
Riviera Group is a reputable developer with an impressive roster of developments Kids Bedroom Balconies (2) Per Annum
that includes La Riviera Tower in Dubai Marina and La Riviera Estates in Jumeirah
Village Circle. Since 2002, the Group has built approximately 1.45 Million square
feet resulting in a 100% delivery track record of 969 units in Dubai.

La Riviera Estate is a gated community comprising of two apartment blocks

consisting of 90 apartments each surrounded by Town homes. The two apartment
building shares a secured podium that comprises of common pool, gym and green
space. The community is nicely developed and very family friendly.

The building is located close JSS school making it very attractive location for families
and teachers. Furthermore the property is conveniently located close Exit #2 in JVC
making it very accessible to enter and exit JVC.

This particular unit is 747 square foot comprising of one bedroom, 1.5 bathroom
and a balcony. The building consist of retreat lounge for the benefits of the tenants,
gym, pool, childrens play area and a fully equipped BBQ area.

Service Charges for the unit are approximately AED 7,470 or AED 10 per sqft
/annum. Per the current rent that service charge to rent ratio of 15.1% is very
competitive where most units are above 20% currently. Lower service charge ratio
help protect your income yield on the asset as your servicing costs are lower making
your unit more competitive in the market both for renting and resale purposes.

SmartCrowd has visited the Property, inspected the Unit and its surroundings but
has not carried out, or commissioned any third parties to carry out, a full technical
survey on the Property or Unit. To the best of SmartCrowd’s knowledge, the
Property and Unit are in working order and a liveable condition.
Private & Confidential Slide 8
JVC RESIDENTIAL MARKET COMMENTARY
JVC has been one of the most transacted areas in all of Dubai over the last few years
both in terms off-plan and secondary market. The population in the area has also Referencing Fig.2; The table provides an overview of how the various Dubai
increased substantially as new supply has been completed and handed over. As one real estate cycles have affected pricing across Dubai and JVC since the last
of the most affordable new areas its high on many residents' lists looking for quality market wide bottom during 2011. Assuming a 6% net return p.a. for Dubai and
affordable dwellings and attractive for investors to capture good returns. a 6.5% net return p.a. for JVC, investors that acquired units in the latter during
2011 and continue to hold, would have benefitted from a strong annualised
Referencing Fig.1; JVC was launched in 2011 near the bottom of the market and return across the 9-year period, bolstered by both yield and capital gains. If
since saw steady increase in property prices until 2014. Given the community is new sold, an annualised return in the region of 7.77% would’ve been achieved.
and popular among a wider segment of the population the prices have declines the
least in all of Dubai since the last cycle peak in 2014. The rents have declined in
lined with the overall Dubai average. In the current climate new affordable areas
will continue to attract residents and inventors providing support to both rental and Fig. 2: JVC vs Dubai - Average Price PSF Cycles
property prices.

1,600
Fig. 1: JVC vs Dubai - Average Price PSF and Rent 120 From To Period Open Close Capital Net Annualised
Area (Year) (Year) (Years) (PPSF) (PPSF) Gain Income Return
1,400 Dubai 2011 2014 3 831 1444 73.70% 150 24.22%
100
1,200 JVC 2011 2014 3 630 961 52.64% 132 20.19%
Dubai 2014 2020 6 1444 1055 -26.95% 520 1.45%
80
1,000 JVC 2014 2020 6 961 861 -10.41% 404 4.68%
Dubai 2011 2020 9 831 1055 26.89% 449 6.81%
800 60
JVC 2011 2020 9 630 861 36.75% 397 7.99%
600
40
400
20
200

0 0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Dubai Sales Jumeirah Village Circle Sales

Source: REIDIN Dubai Rent Jumeirah Village Circle Rent

Private & Confidential Slide 9

DUBAI MARKET COMMENTARY
Fig. 5: Dubai Apartments Sales Price Trend
Secondary Market Transactions

Residential secondary market total transaction values for 2019 stood at

approximately AED 54.6bn, representing a growth of 11.7% when compared to
2018 (AED 48bn). The number of transactions was up 2.6%, from 24,812 to 25,466,
and the average price per sq. Ft. declined 10.5%, from AED 830 to AED 743, when
comparing the same year-on-year period.

Q1 of 2020 shows the highest level of transactions since Q1 2017, an increase of

9.7% compared to Q1 2019. Compared to Q4 2019, the volume was down, but the
off-plan suffered a more significant drop than the secondary market.
Total Value of transactions increased in Q1 2020 compared to Q1 2019 by
approximately 15% in the secondary market and saw a modest decline of 15%
compared to the previous quarter

Average rents across Dubai apartments fell 0.55% M-o-M between Feb & March Fig. 6: Dubai Apartments Rent Price Trend
and 9.19% compared to the prior year. The current Gross yield is 7% on average for
flats in Dubai.

The pace of decline had slowed down, leading to Q1 2020. We do anticipate some
pressure on both prices and rent in the near-term presenting opportunities to
acquire quality assets at reasonable prices.

Source: REIDIN

Private & Confidential Slide 10

RED BOOK VALUATION
TBC
Cavendish Maxwell’s Market Commentary

Dubai
MARKET VALUE
The residential real estate market in Dubai saw unprecedented levels of growth
during 2007 and early 2008 following the establishment of the freehold areas, and
the subsequent law governing them in 2006. Prices peaked in 2008 following high TBC
levels of speculation and then dropped just as drastically in the wake of the global MARKET VALUE PSF
financial crisis. The emerging market of Dubai has seen relatively short cycles with
prices bottoming out in Q1 of 2011 before seeing growth till Q2 2014. This new
market peak was short-lived as prices began to decline in the second half of 2014
and have continued to drop into 2018.
TBC
MARKET RENT ESTIMATE
UAE Economic Performance and Demographics A third-party RICS accredited Red Book valuation will be conducted once a
property has been identified.
Despite economic and geo-political headwinds in the region, UAE's GDP is expected
to grow 3.7% in 2019, according to the International Monetary Fund. Government
spending on infrastructure in Dubai for Expo 2020 and the AED 50 billion stimulus
package announced for the period of 2019-2021 in Abu Dhabi are expected to spell
a revival for the largest economies within the country. Forecasts for Dubai GDP
stand at 4% in 2019 compared to 3.4% in Abu Dhabi for the same period.
Diversification in the fiscal base is expected to continue even as oil price volatility
remains a key determinant of market sentiment and investments in the region.
Business activity and job growth are primary drivers of real estate demand in the
UAE and structural shifts in the regulatory framework, especially around foreign
ownership and longer term visas, could provide an impetus for resilient economic
performance. Among the Northern Emirates, manufacturing, real estate, wholesale
and retail trade sector are the leading contributors to GDP. Infrastructure and
tourism have been outlined as the key sectors for government spending in the
coming years and this is expected to improve the investment profile of the areas.
Source: Cavendish Maxwell January Valuation Report

Private & Confidential Slide 11

INVESTMENT SUMMARY
Location JVC The current unit is attractively priced and well below the market average
providing investors down-side protection both on the capital value as well as
Unit Type One Bedroom Apartment the rental income. Due to low entry point the current annualized yield is well
AED 445,000 (four hundred and forty-five thousand above market and will remain so even with 9-10% reduction in current rent
Target Funds which is in line with market.
dirhams)
Structure Rented The unit price is approximately 14% below market resulting in annualized net
yield of 8.55% well above the market average of 5.39%. Even with rent
8.55% - (After Service Charge, Management Costs & Insurance)
Current Net Yield* reduction the yield will remain strong due to lower service charges.
Market Average is 5.39% (After Service Charge, Management Costs &
Insurance)
The sensitivity below demonstrates the returns based on varying rental rates
JVC is one of the most popular areas both among residents and investors. Its one of and service charges.
the newest communities in Dubai offering many amenities such as schools, Sensitivity Analysis Market Rent
hospitals, parks, shopping mall and easy connectivity to all major highways. Most
building are less than 5 years old offering facilities such as pools and gyms making it 41,000 43,000 45,000 47,000 48,000
an appealing option compared to other affordable areas.

Service Charges
(7,226) 7.04% 7.48% 7.91% 8.34% 8.55%
In the current environment many residents will be looking for affordable options
(6,865) 7.13% 7.56% 7.99% 8.42% 8.64%
and JVC provides that with. The population in the area has increased significantly
over the last few years helping observe supply. We anticipate there will be delay in
(6,178) 7.28% 7.71% 8.14% 8.57% 8.79%
new supply providing some support to both rent and property prices. We do
anticipate lower demand Dubai wide but can see migration into JVC from other
areas further providing support. Compare to past cycles, established areas like A mid to long term hold strategy is suggested for this Unit, which is projected
Greens and Views lead the price recovery from the 2011 bottom. Similarly as JVC to provide steady income throughout the recommended investment holding
gets further established can be the leader for the next cycle. It has been one of the period of 5 years.
best performers since the peak of 2014.
Investors are reminded that the 5-year holding period is not a lock-in period.
As such, investors can call a vote at any time to sell the property if, for
example, values have increased to a point where selling the Unit makes
*Current annualized Net Yield is calculated on the Purchase Price, exclusive of Purchase Costs and Transaction Costs
Market net Yield, less Service Charge Sources: REIDIN
financial sense.

Private & Confidential Slide 12

INVESTMENT SUMMARY
Location JVC AED 445k 10.79%* 8.55%** One BHK
Unit Type One Bedroom Apartment Target Funds Target Gross Target Net Rented
AED 445,000 (four hundred and forty-five thousand Yield Yield
Target Funds
dirhams)
Structure Rented
STRENGTHS WEAKNESSES
8.55% - (After Service Charge, Management Costs & Insurance)
Current Net Yield* - Popular location with strong target net - Expected increase in Supply over the new
Market Average is 5.39% (After Service Charge, Management Costs &
Insurance) return of 8.55% few years

- Affordable location - Unit market value declines, reducing

A mid to long term hold strategy is suggested for this Unit, which is projected to investor returns and potential exit strategy
provide steady income throughout the recommended investment holding period of - Sourced directly, no broker fees, lowering
5 years. the transaction costs - Micro and Macro factors have a
detrimental impact the real estate market
- Chiller included in DEWA making it more
Investors are reminded that the 5-year holding period is not a lock-in period. As attractive among tenants.
such, investors can call a vote at any time to sell the property if, for example,
values have increased to a point where selling the Unit makes financial sense. - One of the most transacted areas in all of
Dubai

- Historical evidence of capital appreciation

over time

- Location is close to many amenities such

as schools, parks, hospitals and shopping
malls

- Newer area

- Good access to all major highways

*Current annualized Net Yield is calculated on the Purchase Price, exclusive of Purchase Costs and Transaction Costs
Market net Yield, less Service Charge Sources: REIDIN

Private & Confidential Slide 13