_Asset Class Risk

Sectors already over supplied e.g. UAE Retail, UAE Residential, UAE Hospitality we expect to be swoosh shaped, with a prolonged recovery time, due to a combination of oversupply, increasing vacancies, softening consumer demand, employment uncertainty, limited new debt finance. Sectors that could rebound more quickly include prime logistics and datacentres, self storage with a robust V shaped recovery expected. We also see a medium term positive outlook for the healthcare sector, with a potential U shaped recovery. In KSA, we expect any recovery in the secondary and tertiary office markets to be swoosh shaped due to oversupply, increasing vacancy rates due to local covenants cashflows being impacted negatively. We view residential assets as having the potential for a more positive U shaped recovery as the fundamentals are more robust alongside the policies that are in place for provision of new housing, especially in the capital. Prime logistics should endure relatively well and have a short recovery due to the growth in ecommerce, together with food based retail, based on the social habits of Saudis.