Majority of investments in the GCC region flows into property sector
Wednesday, September 24, 2008
About 50 percent of all investments in the UAE, and the rest of GCC region, goes into the property sector, as against just 30 percent in other Arab states, noted a development expert.
Also, it should be pointed out at this juncture that the Gulf is not subject to the risk of sub-prime crisis, such as that experienced in the United States, said Dr. Refat Abdelhalim Alfaouri, Director-General, Arab Administrative Development Organization (AADO).
Speaking to the media, Dr. Al Faouri, said any crisis would be the result of an excessive supply of residential units, and political problems, which could lead to possibility of instability in the region.
These factors are not predominant in the UAE and other GCC states, right now, as the states are enjoying security and political stability. Also, the gap between supply and demand of residential units is still large.
The AADO, on monitoring the currently flow of investments into the Arab world's property sector, noticed that about $90bn worth of total investments flowed into the real estate sector each year.
The best areas for investment in the Arab World currently are gold and real estate, both of which, offer safety and stability. The property sector has several benefits, the most prominent of which is the availability of large amount of capital, due to huge increase in prices of oil and high demand for residential units due to growth in population in the Arab countries.
But, shortage of skilled manpower to run properties, and weakness of laws governing the industry and property finance institutions are few of the challenges faced by realty sector.
A study by the Abu Dhabi Chamber of Commerce and Industry (ADCCI) reveals that projects in excess of Dh.1.300 trillion are underway and will be implemented in Abu Dhabi in the next few years. This includes construction and property ventures worth more than Dh.752bn.
The construction boom in Abu Dhabi and several other parts of UAE has helped boost the value of the sector over the past couple of years. The contribution to the gross domestic product of the country has increased from Dh.25bn in 2002 to Dh.45.5bn in 2007, and is expected to touch a maximum of Dh.53.3bn this year.
The property sector contributes an approximate of 6.5 percent of the nominal GDP of the UAE, and about Dh.697bn in 2007.
Social BookmarkingAlso, it should be pointed out at this juncture that the Gulf is not subject to the risk of sub-prime crisis, such as that experienced in the United States, said Dr. Refat Abdelhalim Alfaouri, Director-General, Arab Administrative Development Organization (AADO).
Speaking to the media, Dr. Al Faouri, said any crisis would be the result of an excessive supply of residential units, and political problems, which could lead to possibility of instability in the region.
These factors are not predominant in the UAE and other GCC states, right now, as the states are enjoying security and political stability. Also, the gap between supply and demand of residential units is still large.
The AADO, on monitoring the currently flow of investments into the Arab world's property sector, noticed that about $90bn worth of total investments flowed into the real estate sector each year.
The best areas for investment in the Arab World currently are gold and real estate, both of which, offer safety and stability. The property sector has several benefits, the most prominent of which is the availability of large amount of capital, due to huge increase in prices of oil and high demand for residential units due to growth in population in the Arab countries.
But, shortage of skilled manpower to run properties, and weakness of laws governing the industry and property finance institutions are few of the challenges faced by realty sector.
A study by the Abu Dhabi Chamber of Commerce and Industry (ADCCI) reveals that projects in excess of Dh.1.300 trillion are underway and will be implemented in Abu Dhabi in the next few years. This includes construction and property ventures worth more than Dh.752bn.
The construction boom in Abu Dhabi and several other parts of UAE has helped boost the value of the sector over the past couple of years. The contribution to the gross domestic product of the country has increased from Dh.25bn in 2002 to Dh.45.5bn in 2007, and is expected to touch a maximum of Dh.53.3bn this year.
The property sector contributes an approximate of 6.5 percent of the nominal GDP of the UAE, and about Dh.697bn in 2007.
Labels: Investment Property, Latest News, Middle-East, UAE
Credit Crunch in the US will impact property sectors in Gulf
Monday, September 22, 2008
The current credit crunch being witnessed in the US, with Lehman Brothers Holdings Inc being the latest victim, is sure to have its impact across property markets across the world, particularly with banks getting more cautious to lend, commented the Chief Executive of a top real estate company in Abu Dhabi last week.
Ronald Barrot, the Chief Executive of Aldar Properties, when speaking to the media, revealed that "The ongoing crisis will influence the climate of property markets across the world. It will impact the margins and conditions for lending, and banks will get more cautious on matters associated with lending."
Property companies in the Gulf are currently enjoying an economic boom due to high oil prices that have been untouched by the global credit crunch. However, a reluctance by banks to lend in the region could hinder $2.3tn infrastructure, and thereby, real estate investments across the region.
According to Barrot, despite the probability of stringent lending criteria, Aldar would continue with its plans as usual, as the company is confident of being able to maintain business inline with their plans. However, smaller companies may face problems, Barrot said.
Aldar is eyeing real estate opportunities in the US and European sectors during the current situation of global economic recession.
Barrott said that it is too early to predict the impact that the collapse of Lehman Brothers would have on real estate market in the UAE, but "confidence levels were key."
"Markets in the region are amongst the most robust, and will continue to be interesting for people willing to invest. Our market is more insulated from the slowdown than others," said Barrot.
However, a few analysts warn that increasing borrowing costs and tightening liquidity could dampen the developer investment and buyer interest in the UAE. This advance perception of risk will limit the ability of raising funds by the Bank, and will dampen their ability to finance future real estate investment and mortgages. Higher mortgage cost may also slow buyer demand, said Robert McKinnon, a real estate analyst, who is also the Head of Equity Research at Al Mal Capital.
Property shares in the UAE have declined considerably with fears of economic slowdown gripping the region, and the numbers of police probes in real estate companies are growing.
Social BookmarkingRonald Barrot, the Chief Executive of Aldar Properties, when speaking to the media, revealed that "The ongoing crisis will influence the climate of property markets across the world. It will impact the margins and conditions for lending, and banks will get more cautious on matters associated with lending."
Property companies in the Gulf are currently enjoying an economic boom due to high oil prices that have been untouched by the global credit crunch. However, a reluctance by banks to lend in the region could hinder $2.3tn infrastructure, and thereby, real estate investments across the region.
According to Barrot, despite the probability of stringent lending criteria, Aldar would continue with its plans as usual, as the company is confident of being able to maintain business inline with their plans. However, smaller companies may face problems, Barrot said.
Aldar is eyeing real estate opportunities in the US and European sectors during the current situation of global economic recession.
Barrott said that it is too early to predict the impact that the collapse of Lehman Brothers would have on real estate market in the UAE, but "confidence levels were key."
"Markets in the region are amongst the most robust, and will continue to be interesting for people willing to invest. Our market is more insulated from the slowdown than others," said Barrot.
However, a few analysts warn that increasing borrowing costs and tightening liquidity could dampen the developer investment and buyer interest in the UAE. This advance perception of risk will limit the ability of raising funds by the Bank, and will dampen their ability to finance future real estate investment and mortgages. Higher mortgage cost may also slow buyer demand, said Robert McKinnon, a real estate analyst, who is also the Head of Equity Research at Al Mal Capital.
Property shares in the UAE have declined considerably with fears of economic slowdown gripping the region, and the numbers of police probes in real estate companies are growing.
Labels: Latest News, Market Trends, Middle-East
Banks overexposed to expanding Gulf property markets: HSBC
Saturday, September 06, 2008
Being exposed to the overheated property market in the Gulf, the Banks such as the First Gulf in Abu Dhabi are in a vulnerable position, where funding conditions for financial firms are likely to deteriorate HSBC stated.
HSBC has reduced price targets on several major banks in the emirate, stating the financial sector would remain challenged by the lack of economic diversification in the country.
HSBC, in its note to the clients, stated that the high concentration of real estate and construction loans in the portfolio of banks is a matter of concern, although it is not an immediate threat.
Banks such as the First Gulf and National Bank of Abu Dhabi are the most exposed to any downturn in the property market.
HSBC has reduced its investor recommendation on First Gulf to neutral from overweight, with a price target of Dh.24.5, while also lowering its price target on National Bank of Abu Dhabi to Dh.19.9 from Dh.22.5.
Banks in the Gulf have considerably weakened during the recent weeks, based on the bourses in the region, on concern that a rapid expansion in the realty market, to which the Banks are exposed, may have gone too far.
For instance, the Abu Dhabi Commercial Bank has shed 24 percent this year so far, while the First Gulf Bank has gained about 10 percent. There is overheating in the real estate market in the region, but we do not notice any immediate threat to asset quality, the note stated.
HSBC has also lowered its price target on Union National Bank to Dh.11.0 from Dh.11.9, and from Dh.7.8 to Dh.6.4 on Abu Dhabi Commercial Bank.
Social BookmarkingHSBC has reduced price targets on several major banks in the emirate, stating the financial sector would remain challenged by the lack of economic diversification in the country.
HSBC, in its note to the clients, stated that the high concentration of real estate and construction loans in the portfolio of banks is a matter of concern, although it is not an immediate threat.
Banks such as the First Gulf and National Bank of Abu Dhabi are the most exposed to any downturn in the property market.
HSBC has reduced its investor recommendation on First Gulf to neutral from overweight, with a price target of Dh.24.5, while also lowering its price target on National Bank of Abu Dhabi to Dh.19.9 from Dh.22.5.
Banks in the Gulf have considerably weakened during the recent weeks, based on the bourses in the region, on concern that a rapid expansion in the realty market, to which the Banks are exposed, may have gone too far.
For instance, the Abu Dhabi Commercial Bank has shed 24 percent this year so far, while the First Gulf Bank has gained about 10 percent. There is overheating in the real estate market in the region, but we do not notice any immediate threat to asset quality, the note stated.
HSBC has also lowered its price target on Union National Bank to Dh.11.0 from Dh.11.9, and from Dh.7.8 to Dh.6.4 on Abu Dhabi Commercial Bank.
Labels: Middle-East, Mortgages
Morgan Stanley report positive about MENA property sector
Saturday, August 09, 2008
Morgan Stanley, in their coverage on twelve property stocks in MENA region (Middle East and North Africa), has identified Emaar, Aldar, Qatar Real Estate and Palm Hills, as top pick for investors seeking to take advantage of the thriving real estate sector in the region.
Mai Attia, a Morgan Stanley analyst, in her report, titled "Winners and Losers in MENA Property", indicated a positive note on MENA property market, and said that a growth, driven by Qatar and Abu Dhabi, is likely to happen, with the market remaining undersupplied until 2012.
The report states that for the first time, a proper assessment of the Net Asset Value (NAV) has been considered in the region for pricing of property stocks. Till date, the analysts had set price targets for property companies at 100 percent of Discount Cash Flow (DCF), which is not so accurate, when compared to the NAV approach while pricing property stocks.
The report said that the main beneficiaries in the booming property market in the region will be Emaar, which will benefit from the high growth and low risk of its diversified business model, followed by Aldar, the pioneer in Abu Dhabi market, which will benefit from escalation in property prices and increase in demands. The Qatar Real Estate, a leader in booming industrial property segment in Qatar, and Palm Hills, an Egyptian company, which has diversified landbank, high profitability, partnerships and exposure to the Saudi market.
Morgan Stanley is a leading global financial services company, offering services in investment banking, investment management, securities and wealth management services.
The employees serve clients worldwide including governments, corporations, individuals and institutions from about 600 offices in 32 countries.
Social BookmarkingMai Attia, a Morgan Stanley analyst, in her report, titled "Winners and Losers in MENA Property", indicated a positive note on MENA property market, and said that a growth, driven by Qatar and Abu Dhabi, is likely to happen, with the market remaining undersupplied until 2012.
The report states that for the first time, a proper assessment of the Net Asset Value (NAV) has been considered in the region for pricing of property stocks. Till date, the analysts had set price targets for property companies at 100 percent of Discount Cash Flow (DCF), which is not so accurate, when compared to the NAV approach while pricing property stocks.
The report said that the main beneficiaries in the booming property market in the region will be Emaar, which will benefit from the high growth and low risk of its diversified business model, followed by Aldar, the pioneer in Abu Dhabi market, which will benefit from escalation in property prices and increase in demands. The Qatar Real Estate, a leader in booming industrial property segment in Qatar, and Palm Hills, an Egyptian company, which has diversified landbank, high profitability, partnerships and exposure to the Saudi market.
Morgan Stanley is a leading global financial services company, offering services in investment banking, investment management, securities and wealth management services.
The employees serve clients worldwide including governments, corporations, individuals and institutions from about 600 offices in 32 countries.
Labels: Latest News, Market Trends, Middle-East
Gulf Property market unlikely to succumb to global property fall trend
Tuesday, July 08, 2008
For those of you, who are on the look out for an investment opportunity that doesn't succumb to the global fall in property investment transactions, the Gulf property market is still a welcoming one.
According to Robin Williamson, the Managing Director-Middle East operations of DTZ, expert real estate firm, although the initial phase of sub-prime crisis seems to have passed, the credit crunch is likely to continue well into 2009, particularly, in the European and US property markets.
However, on the contrary, the Gulf region and few other markets such as the Asia Pacific, will be less affected to a great extent, and will continue to be an attractive one, he added.
This positive stance about the Gulf Market follows the publication of DTZ's annual Money into Property report, which studies the global property trends. The report shows that the value of real estate capital market has touched $12trillion in 2007, an increase of over 18 percent from the previous year.
As against the year 2007, when Global Investment transactions grew to $730bn, DTZ expects a fall of 30 percent this year touching $500bn, due to the global investment environment last year. Even the global direct real estate transactions have fallen by 50 percent during the first quarter of 2008, as against the same period during 2007.
Williamson revealed that only a few regions can escape the effects of the sub-prime fall out. Based on the company's research and on-the-ground experience in dealing with Gulf markets, there are strong indications that the global property markets are less likely to surrender to these global trends.
DTZ, which began its operations in 1975, is one of the most established realty firms in the region, with a strong presence in six GCC locations, including Dubai, Abu Dhabi, Bahrain, Qatar, Kuwait and Saudi Arabia.
Social BookmarkingAccording to Robin Williamson, the Managing Director-Middle East operations of DTZ, expert real estate firm, although the initial phase of sub-prime crisis seems to have passed, the credit crunch is likely to continue well into 2009, particularly, in the European and US property markets.
However, on the contrary, the Gulf region and few other markets such as the Asia Pacific, will be less affected to a great extent, and will continue to be an attractive one, he added.
This positive stance about the Gulf Market follows the publication of DTZ's annual Money into Property report, which studies the global property trends. The report shows that the value of real estate capital market has touched $12trillion in 2007, an increase of over 18 percent from the previous year.
As against the year 2007, when Global Investment transactions grew to $730bn, DTZ expects a fall of 30 percent this year touching $500bn, due to the global investment environment last year. Even the global direct real estate transactions have fallen by 50 percent during the first quarter of 2008, as against the same period during 2007.
Williamson revealed that only a few regions can escape the effects of the sub-prime fall out. Based on the company's research and on-the-ground experience in dealing with Gulf markets, there are strong indications that the global property markets are less likely to surrender to these global trends.
DTZ, which began its operations in 1975, is one of the most established realty firms in the region, with a strong presence in six GCC locations, including Dubai, Abu Dhabi, Bahrain, Qatar, Kuwait and Saudi Arabia.
Labels: Market Trends, Middle-East, Real Estate News
Region's investment in theme parks exceeds Dh.11 trillion
Tuesday, May 27, 2008
The region's leisure and tourism sector is likely to receive a major boost with the planned investment of Dh.11 trillion on theme parks and other leisure and tourism projects in the Middle East, over the next twenty years.
The forthcoming attractions in the region include the Restless Planet and Universal Studios in Dubailand, Entertainment City in Qatar, Ferrari World in Abu Dhabi, Aquaventure Waterpark at Atlantis in Dubai, Warner Bros theme park at Abu Dhabi, Marvel Entertainment Theme Park in dubai, Paramount Pictures-branded theme park in Dubai and the WOW RAK theme park comples in Ras Al Khaimah.
As per the region's current estimates, the entertainment and leisure sector is witnessing an annual growth of 20 to 25 percent, touching Dh.36billion.
Dubailand, the Dh.235bn tourism and entertainment project is being built in the emirate, announced that it would be located at new Dream Works Animation theme park, through a strategic alliance with the US studio. Comprising a collection of 24 theme parks, Dubailand will be the biggest leisure attractions in the world.
The construction of theme parks will happen in phases. The preliminary design work and site planning is underway and the first phase is likely to open by 2012.
The massive investment on theme parks is expected to increase demand for gardening equipment and products and services of landscape design companies and landscape artists too are likely to increase considerably over the next couple of years in the region.
Social Bookmarking
The forthcoming attractions in the region include the Restless Planet and Universal Studios in Dubailand, Entertainment City in Qatar, Ferrari World in Abu Dhabi, Aquaventure Waterpark at Atlantis in Dubai, Warner Bros theme park at Abu Dhabi, Marvel Entertainment Theme Park in dubai, Paramount Pictures-branded theme park in Dubai and the WOW RAK theme park comples in Ras Al Khaimah.
As per the region's current estimates, the entertainment and leisure sector is witnessing an annual growth of 20 to 25 percent, touching Dh.36billion.
Dubailand, the Dh.235bn tourism and entertainment project is being built in the emirate, announced that it would be located at new Dream Works Animation theme park, through a strategic alliance with the US studio. Comprising a collection of 24 theme parks, Dubailand will be the biggest leisure attractions in the world.
The construction of theme parks will happen in phases. The preliminary design work and site planning is underway and the first phase is likely to open by 2012.
The massive investment on theme parks is expected to increase demand for gardening equipment and products and services of landscape design companies and landscape artists too are likely to increase considerably over the next couple of years in the region.
Labels: Middle-East, Theme-Parks, Tourism
Realty projects in Gulf Countries exceeds Dh.8.8trillion
Thursday, April 24, 2008
The real estate projects that are underway in GCC have cross Dh.8.8trillion mark, according to an industry research.
The figure has been arrived at, taking into account all additional developments (even in their concept stage) that are currently happening in the GCC, which accounts for a total of 3,519 projects worth Dh.9.27 trillion.
Majority of these developments are happening in the Saudi Arabia and UAE.
The biggest project under construction in the region is the 'King Abdullah Economic City' at Saudi Arabia, worth Dh.440.4 billion, followed by the 'Dubailand' in Dubai, which is valued at Dh.403.7billion, and thereafter the 'Silk City' real estate project worth Dh.315.6 in Kuwait.
In the light of such massive construction activities, the 2008 edition of Hardware and Tools Middle East will be held at the Dubai International Convention and Exhibition Center between 25th and 27th of May 2008. The exhibition is worth visiting for construction companies, realty firms, maintenance firms, buyers, and contractors from across the region.
Social BookmarkingThe figure has been arrived at, taking into account all additional developments (even in their concept stage) that are currently happening in the GCC, which accounts for a total of 3,519 projects worth Dh.9.27 trillion.Majority of these developments are happening in the Saudi Arabia and UAE.
The biggest project under construction in the region is the 'King Abdullah Economic City' at Saudi Arabia, worth Dh.440.4 billion, followed by the 'Dubailand' in Dubai, which is valued at Dh.403.7billion, and thereafter the 'Silk City' real estate project worth Dh.315.6 in Kuwait.
In the light of such massive construction activities, the 2008 edition of Hardware and Tools Middle East will be held at the Dubai International Convention and Exhibition Center between 25th and 27th of May 2008. The exhibition is worth visiting for construction companies, realty firms, maintenance firms, buyers, and contractors from across the region.
Labels: Middle-East, Real Estate Projects
UAE - the most preferred choice of property investment in the region
Tuesday, April 22, 2008
Majority of foreign investors have purchased properties in the UAE than in any other Gulf States, reveals a recent survey by ArabianBusiness.com (Property Survey 2008).
About 95.5% of the respondents in the survey agreed that UAE was their popular choice of investment, being the leading market in the Gulf real estate boom.
According to the survey, majority of foreigners are purchasing properties as an investment, and are of the opinion that UAE would be the best Gulf market to yield maximum returns over the next two years.
Ever since the government opened its market for foreigners in 2002, the housing and rental prices have been on the increase, more so in recent years, due to housing shortage and high cost of construction.
The property prices in Abu Dhabi are likely to shoot up by 25% this year, according to a recent report by HSBC. In Dubai, a 15% rise is expected, as revealed by Standard Chartered Bank.
Among the 3000 respondents who participated in the survey, about 1.24% have purchased properties in Qatar, 1.04% in Bahrain, 0.52% in Saud Arabia, and 0.21% in Oman and Kuwait.
According to the survey, UAE is much ahead than Qatar, Saudi Arabia, Oman, Bahrain and Kuwait when it comes to offering best returns on buyer investments within a short-term.
For purchase of property, almost all nationalities favoured UAE over the other Gulf states. However, 10% of New Zealand nationalities had purchased properties in Bahrain, while 12.5% bought from Netherlands and Qatar.
The survey pointed out that no nationality had invested in the Kuwait realty sector, except Indians. It was also found that as majority of expatriates in the Gulf are Indians, they were the most active investors in the region, purchasing property in all the six Gulf States.
The survey pointed out that no nationality had invested in the Kuwait realty sector, except Indians. It was also found that as majority of expatriates in the Gulf are Indians, they were the most active investors in the region, purchasing property in all the six Gulf States.
Labels: Market Trends, Middle-East, Property Prices, UAE
Middle East retail property developers urged to go 'green'
Tuesday, April 15, 2008
The organizers of Retail City 2008 in Dubai, have urged property developers in Middle East to adhere to the emerging global trend of building 'green' malls, which is something that cannot be ignored.
The fast-paced Arabian Gulf economies have been developing ambitious retail infrastructure projects. The 'Retail City 2008' expected to take place between 1st and 3rd June 2008 at the Dubai International Exhibition Center, will witness a gathering of investors, global retailers, shopping center developers, shopping center management, franchise networks, architects and regional authorities all under a single roof, to focus on all aspects of retail development cycle.
The Project Manager of Retail City 2008, Naomi Koningen, has said that the Middle East retail sector currently exceeds $100bn in value annually, and is second to the residential property sector in the non-oil economy. Hence, it is vital that this huge economic sector takes into account the impact that it bears on the environment and the need for sustainability in design and construction of malls and stores.
Social BookmarkingThe fast-paced Arabian Gulf economies have been developing ambitious retail infrastructure projects. The 'Retail City 2008' expected to take place between 1st and 3rd June 2008 at the Dubai International Exhibition Center, will witness a gathering of investors, global retailers, shopping center developers, shopping center management, franchise networks, architects and regional authorities all under a single roof, to focus on all aspects of retail development cycle.
The Project Manager of Retail City 2008, Naomi Koningen, has said that the Middle East retail sector currently exceeds $100bn in value annually, and is second to the residential property sector in the non-oil economy. Hence, it is vital that this huge economic sector takes into account the impact that it bears on the environment and the need for sustainability in design and construction of malls and stores.
Labels: Environment-friendly, Middle-East, Property-show
Gulf Realty Companies likely to report strong growth in 2008
Tuesday, April 01, 2008
The realty companies in Gulf, whose profits have increased by more than 20% last year, are expected to continue their strong growth in 2008, remaining immune to global economic slowdown, maintaining favorable market conditions and foreign investments, say analysts.
A Real Estate Analyst, Stefan Schurmann, at EFG Hermes, said "The fundamentals for the Gulf region in 2008 are good, and this will help real estate developers in the region to post healthy profits."
Delivery of projects is happening, and residential units are being delivered and booked accordingly, and the realty companies are re-evaluating their land value and lowering interest rate, which is, in turn, motivating people to buy, he said.
The net income of 17, out of top 20 realty companies in the six member GCC region increased to 21%, while their combined assets increased to 55%, touching $46,98bn, according to Zawya Investor data.
Schurmann said that Gulf realty developers are benefiting from the global slowdown with foreign investors putting their money into the region. An increasingly sophisticated legal framework is also helping to attract international buyers.
The London-based MEED (Middle East Economic Digest) indicates that Kuwait, Bahrain, Saudi Arabia, UAE and Qatar are spending $1.45 trillion on an average on real estate projects.
The Gulf's largest construction market, the UAE, has approximately $223.8bn worth of realty projects under construction, with some of the main benefactors of construction boom.
Deyaar Development has seen a 29% increase in profit, touching $145.7million, with the value of projects touching Dh.8bn in 2207, as against Dh.2.4bn in 2006.
Union Properties had a 12% profit, touching $186.5mn, due to increase in profit margin from sales and management.
Emaar Properties, the largest realty developer in the region, has however, recorded only a small increase of 3.2% in profit, touching Dh.6.57bn last year, due to its diversification activities. Gowever, Emaar expects its profit to be in line with 2007 this year too, while a few analysts expect Emaar to perform even better.
In Abu Dhabi, Sorouh Real Estate and Aldar Properties posted strong gains with the property market continuing to boom. Aldar's profit soared to 29%, touching $342.3mn, while Sorough saw its profit climbing by 55%, touching $528.5mn.
Even the Saudi-based realty companies, involved in construction of 'economic cities' reported strong results, as demand for property in the Kingdom continued to grow.
Social BookmarkingA Real Estate Analyst, Stefan Schurmann, at EFG Hermes, said "The fundamentals for the Gulf region in 2008 are good, and this will help real estate developers in the region to post healthy profits."
Delivery of projects is happening, and residential units are being delivered and booked accordingly, and the realty companies are re-evaluating their land value and lowering interest rate, which is, in turn, motivating people to buy, he said.
The net income of 17, out of top 20 realty companies in the six member GCC region increased to 21%, while their combined assets increased to 55%, touching $46,98bn, according to Zawya Investor data.
Schurmann said that Gulf realty developers are benefiting from the global slowdown with foreign investors putting their money into the region. An increasingly sophisticated legal framework is also helping to attract international buyers.
The London-based MEED (Middle East Economic Digest) indicates that Kuwait, Bahrain, Saudi Arabia, UAE and Qatar are spending $1.45 trillion on an average on real estate projects.
The Gulf's largest construction market, the UAE, has approximately $223.8bn worth of realty projects under construction, with some of the main benefactors of construction boom.
Deyaar Development has seen a 29% increase in profit, touching $145.7million, with the value of projects touching Dh.8bn in 2207, as against Dh.2.4bn in 2006.
Union Properties had a 12% profit, touching $186.5mn, due to increase in profit margin from sales and management.
Emaar Properties, the largest realty developer in the region, has however, recorded only a small increase of 3.2% in profit, touching Dh.6.57bn last year, due to its diversification activities. Gowever, Emaar expects its profit to be in line with 2007 this year too, while a few analysts expect Emaar to perform even better.
In Abu Dhabi, Sorouh Real Estate and Aldar Properties posted strong gains with the property market continuing to boom. Aldar's profit soared to 29%, touching $342.3mn, while Sorough saw its profit climbing by 55%, touching $528.5mn.
Even the Saudi-based realty companies, involved in construction of 'economic cities' reported strong results, as demand for property in the Kingdom continued to grow.
Labels: Latest News, Market Trends, Middle-East, UAE
Middle East property market faces risk of being overstretched
Saturday, March 22, 2008
The regions property market is facing the risk of being overstretched, said an industry official during a recent conference held at Dubai.
The real estate transactions in Dubai were worth $18billion in 2006, and as per current estimates a staggering $158billion is invested in the property sector of Dubai.
A survey, conducted by 'The Financial Times' reported that Dubai is 'at the cutting edge' of world property markets, with property values shooting up by 150 percent over the last two years, which is a total contrast to the UK property values, which increased only by 240 percent over the past ten years.
According to a UAE-based developer, there is a lot of pent-up capital, looking closely at this region, but, returns will be crushed based on escalating costs. Over the past two years, Dubai has witnessed that rents for premium office space has grown more than double, mounting to $1,172 per square meter in few areas. Three years ago, this figure was only about $538.
The main factor contributing to Dubai's property boom is the ever-increasing population, which is expected to touch 1.9million in 2010. Low-cost property is high in demand, but due to soaring prices of materials, investment in this sector is losing its appeal.
To add to this, high construction costs are hindering the progress of many projects, which is a growing cause of worry among developers and investors, alike. Few developers are even buying back their own stock, unable to continue construction.
A Dubai-based developer has agreed that during the past three months, there has been a steady increase in the sale of partly finished buildings.
The Managing Director of an international consultancy firm says that the problem in Dubai is that it has plenty of inexperienced developers, who are building too much, too quickly, and it is getting hard to sustain them.
Social BookmarkingThe real estate transactions in Dubai were worth $18billion in 2006, and as per current estimates a staggering $158billion is invested in the property sector of Dubai.
A survey, conducted by 'The Financial Times' reported that Dubai is 'at the cutting edge' of world property markets, with property values shooting up by 150 percent over the last two years, which is a total contrast to the UK property values, which increased only by 240 percent over the past ten years.
According to a UAE-based developer, there is a lot of pent-up capital, looking closely at this region, but, returns will be crushed based on escalating costs. Over the past two years, Dubai has witnessed that rents for premium office space has grown more than double, mounting to $1,172 per square meter in few areas. Three years ago, this figure was only about $538.
The main factor contributing to Dubai's property boom is the ever-increasing population, which is expected to touch 1.9million in 2010. Low-cost property is high in demand, but due to soaring prices of materials, investment in this sector is losing its appeal.
To add to this, high construction costs are hindering the progress of many projects, which is a growing cause of worry among developers and investors, alike. Few developers are even buying back their own stock, unable to continue construction.
A Dubai-based developer has agreed that during the past three months, there has been a steady increase in the sale of partly finished buildings.
The Managing Director of an international consultancy firm says that the problem in Dubai is that it has plenty of inexperienced developers, who are building too much, too quickly, and it is getting hard to sustain them.
Labels: Latest News, Middle-East
Middle east set to be third largest property investor
Friday, July 28, 2006
Middle East spending on global real estate will surge 50 per cent in 2006 to $15 billion, making the region the world's third-largest foreign property investor, according to a top industry firm.
Tony M Horrell, international director for Jones Lang LaSalle, told Gulf News record oil revenues of the Gulf countries and the diversification of regional economies is leading Middle East investors to make significant investments in property outside their home markets.
"After a few years of absence, Middle East funds are again investing heavily in the US, followed by Europe."
According to Jones Lang LaSalle's latest Global Real Estate Capital Report, Middle East investors spent nearly $6 billion in buying foreign commercial real estate in the first half of 2006, $4 billion in the US and $2 billion in Europe, mainly the UK.
"My estimate is that this figure for the Middle East will get to $15 billion by the end of the year on the basis of the transactions that are under way," Horrell said.
That would make the Middle East the world's third-largest buyer of commercial real estate in foreign markets after the US and Germany, he added.
Jones Lang LaSalle, which recently acquired Dubai's RSP Group, has identified the GCC region as a key source of global capital against a backdrop of the rising investment by Middle Eastern investors in international real estate markets. The main buyers include private equity funds and family offices.
The year 2006 is also on target to be another record year as total direct real estate investments approach $600 billion, up from some $480 billion in 2005, according to Jones Lang LaSalle.
[Gulf News - October 6, 2006]
Social BookmarkingTony M Horrell, international director for Jones Lang LaSalle, told Gulf News record oil revenues of the Gulf countries and the diversification of regional economies is leading Middle East investors to make significant investments in property outside their home markets.
"After a few years of absence, Middle East funds are again investing heavily in the US, followed by Europe."
According to Jones Lang LaSalle's latest Global Real Estate Capital Report, Middle East investors spent nearly $6 billion in buying foreign commercial real estate in the first half of 2006, $4 billion in the US and $2 billion in Europe, mainly the UK.
"My estimate is that this figure for the Middle East will get to $15 billion by the end of the year on the basis of the transactions that are under way," Horrell said.
That would make the Middle East the world's third-largest buyer of commercial real estate in foreign markets after the US and Germany, he added.
Jones Lang LaSalle, which recently acquired Dubai's RSP Group, has identified the GCC region as a key source of global capital against a backdrop of the rising investment by Middle Eastern investors in international real estate markets. The main buyers include private equity funds and family offices.
The year 2006 is also on target to be another record year as total direct real estate investments approach $600 billion, up from some $480 billion in 2005, according to Jones Lang LaSalle.
[Gulf News - October 6, 2006]
Labels: Middle-East
