Monday, April 20, 2009

2010, best time to invest in Middle East realty sector

With the investors beginning to consider Abu Dhabi as the top regional market in terms of city competitiveness, the year 2010 would be the best time to invest in the Middle East and North Africa (MENA) real estate market, says a new report.

The Head of MENA Investment Transactions at Jones Lang LaSalle, Ian Ohan, says "Investors expect Abu Dhabi to be the best performing property market in the MENA region during the next one or two years."

Given the current scarcity of institutional quality real estate in most sectors of the market, investors are finding the most attractive investment environment in Abu Dhabi, compared to other major markets in the region.

The long-term success and sustainability of the city, including the planned infrastructure, real estate planning, strong corporate governance, environment sustainability, quality of leadership and political stability have all further contributed to this fact.

The financial strength of the government also offers a solid platform for continued infrastructure spending over the next couple of years. As in the other markets, decreased cost of construction and falling land values would result in high returns, particularly, on the projects at their early stages of development.

According to a Jones Lang LaSalle report in March, the Abu Dhabi market is dominated by government-related companies, who are beginning to intervene to rationalize and delay projects, thereby avoiding potential over-supply in future.

Saudi Arabia is also increasingly being considered as offering strong potential, with several respondents suggesting that it would be the strongest performing property markets across the MENA region in the next one or two years.

However, despite concerns over short-term risks, Dubai has been ranked second (following Abu Dhabi) on the most of long-term underlying factors, which promises a recovery of the market in the medium-term. With significant market adjustments in rental values and capital, already in place, Dubai too, may be one of the most lucrative property investment opportunities in the region.

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