MENA real estate market sentiment improves

Published October 1st, 2009 - 01:36 GMT

According to 225 of the region’s premier Investors responding to Jones Lang LaSalle’s Third Real Estate Investor Sentiment Survey conducted in association with Cityscape Intelligence.
• A sense that the worst of the downturn is behind us and a more realistic acknowledgement of the ‘new normal’ has resulted in a significant improvement in sentiment about the outlook for real estate markets.
• Dubai – becoming the competitive city – Concerns of over-supply remain, but Investors acknowledge Dubai as the regional leader in terms of long term city competitiveness and infrastructure.
• Abu Dhabi, Saudi Arabia and Qatar expected to recover first – strong fundamentals in the hydro-carbon power-houses of the region will ensure more Investor attention in these markets which are expected to recover most quickly.
• There are more buyers than sellers in the market for ‘investable assets’ – high quality, professionally managed and realistically priced assets remain in demand.

1 October 2009: The real estate markets of the MENA region have seen a marked improvement in sentiment, according to findings from the third semi-annual Real Estate Investor Sentiment Survey, an in-depth study of real estate investment professionals conducted by Jones Lang LaSalle in association with Cityscape Intelligence.  The findings of the third semi-annual survey reveal a significant demand for the right product, with these ‘investible assets’ currently in short supply as most owners plan to hold assets.

Ian Ohan, Head of MENA Investment Transactions at Jones Lang LaSalle, commented:

“Investors are much more positive than they were six months ago. Our previous survey concluded that 2010 was shaping up to be the ‘vintage year’ for real estate investment in the MENA region and our latest report confirms this view. What we can also see now is a clear rationale for investment strategy over the next 12-24 months and a recognition that the right products located in the right places will attract investment.

Dubai’s has received high marks from Investors for its achievements including its world class infrastructure, appeal to international corporate occupiers, market openness and quality of life. While short-term concerns around liquidity and over-supply remain, a return to 2007 pricing will see Dubai enforce its competitiveness as one of the region’s leading destinations for investment.

 

Abu Dhabi is considered by our respondents to offer significant over-all potential. Second only to Dubai in terms of its infrastructure achievements but second to none in terms of fiscal strength, the emirate is well placed to increased investment in its real estate sector.

Surprising to many will be our finding that there are more buyers than sellers for genuine investment grade product. This highlights the paucity of such product in the MENA markets and the obvious opportunity for owners to better package their projects in line with the expectations of the sophisticated long term investor.

That MENA has returned to a more positive footing just 6 months after the first crack in sentiment appeared is an incredible turn around and suggests 2010 will be a year of significant development.”


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