Investors can look for value buys in affordable housing

Visitors check out the Meydan One pavilion during Cityscape Global.

This year's Cityscape Global Exhibition and Conference was forecast to be the largest yet and comes at a time when Dubai's real estate industry is expected to start entering a cyclical growth phase in the lead up to Expo 2020.

The importance of Cityscape Global cannot be overstated. As with many exhibitions, it provides a concentrated and focused forum which allows the industry to showcase its vision and capabilities and demonstrate what shape Dubai will take in the future. But Cityscape is much more than that.

Cityscape Global is an open invitation for all stakeholders to understand, evaluate, participate and prosper in an industry that continues to literally change the shape of Dubai. It allows these stakeholders to gain a macro sense of industry direction and a micro understanding of the various elements that will shape the industry going forward.

For buyers and investors, there is no better place to gain an appreciation of the myriad of opportunities that are on offer, but the sheer scale of the exhibition can become a little overwhelming, especially when you are looking to invest in the short term.

I advise my investors to look for value opportunities in the affordable housing segment, particularly in Dubai South. This segment has outperformed its more luxurious alternatives and has continued to show a lot of potential, even through the recent cyclical correction. Affordable properties will continue to be in high demand as Dubai's population growth gains momentum during a period of expected strong economic growth leading up to the end of the decade.

And while the value is irrefutable, the risks associated with investing in the affordable segments of the industry as opposed to the luxury segments are much lower. As Dubai continues to grow, so does the need for affordable housing.

Yet, although I see great value in investing in the affordable segment, it doesn't mean some interesting opportunities won't appear in other segments as well. You need to keep an open mind and be wary of unique opportunities that may be present.

I always advise my clients that the best way to get the most out of the event is to canvass all the interesting opportunities on display and gradually establish a short list of the best opportunities. Establishing such a list from an exhibition as huge as Cityscape is not easy and requires a disciplined approach. This is where a property asset management professional can assist.

Why? It's important to understand what factors are going to determine the potential of any investment. For property, these factors include everything from macro level influences such as global economic performance and policies, geopolitical issues, currency rates and oil prices to more regional factors such as supply/demand, consumer confidence, government policy and regulatory framework, industry cycles and liquidity in the market.

So, a lot of the work in ensuring that investors and potential buyers make the most of their Cityscape experience is actually done beforehand in preparing an understanding of what the overall investment environment looks like.

It's important for the investor to understand why he or she wants to invest in property and what the investment objectives are. Too many investors formulate the answers to these questions "on the run", once they are traipsing around the exhibition. This lack of preparation just leads to confusion and ultimately, poor decision making.

The writer is CEO of Harbor Real Estate. Views expressed are his own and do not reflect the newspaper's policy.