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Investors Confident about Real Estate Recovery: Poll

The global real estate services company said confidence in MENA’s real estate sector has improved dramatically since its real estate investor sentiment survey last April.

“Investors feel significantly more positive about the value proposition of Middle Eastern real estate, and 2010 is shaping up to be the vintage year for real estate investment in the MENA region,” said Ian Ohan, head of MENA investment transactions at Jones Lang Middle East.

“Although they recognise that not all markets have yet bottomed, there is a real sense among investors that the worst is generally behind us,” said Ohan. Dubai, the worst-hit in the region by the global economic slump, has seen the biggest improvement in sentiment, with respondents to the Jones Lang Survey recognising the emirate as the regional leader in terms of long-term city competitiveness 
and infrastructure.

Within MENA, investors perceived the United Arab Emirates, particularly Abu Dhabi and Dubai; Saudi Arabia and Qatar, to be the strongest performing real estate markets in the next two years. These markets were seen as having the resources to overcome existing challenges, as they are cushioned by their oil and gas wealth.

Forty-two per cent of the 225 investors polled said the UAE is expected to be the strongest perfoming market when recovery happens, with 26 per cent favouring Abu Dhabi over Dubai.

Sentiment towards Dubai, though, has improved significantly, with 16 per cent expecting the emirate to be strongest performer in the next 12 months, compared to only 11 per cent in the survey. “Dubai 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,” said Jones Lang in its report.

A critical factor for Dubai is the ability of government-owned property developer Nakheel, to successfully refnance its maturing bonds later this year, regarded as a “litmus test” of the strength of the emirate’s property sector, and a benchmark for the pricing of regional risk, said Ohan.

· rocel@khaleejtimes.com