While Dubai’s economic environment is improving rapidly, the real estate sector is likely to go through more pain and fall by a further 15-20% before bottoming out, says Rasmala.

While Dubai’s economic environment is improving rapidly, the real estate sector is likely to go through more pain and fall by a further 15-20% before bottoming out, says Dubai-based Rasmala. READ MORE HERE

UAE Macroeconomic Analysis Report

The USD350 UAE Macroeconomic Analysis Report, examines the prospects for the Middle East’s most dyanmic ad diversified economy. The country is poised for growth over the next few years, but also faces significant economic challenges as it looks to revive key sectors such as real estate and tourism.

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Country Risk

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Key Government Ministries

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Weekly Alifarabia.com Newsletter for FREE, including articles on UAE economy

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Saudi Arabia Country Report

The USD350 Saudi Arabian Macroeconomic Analysis Report, examines the prospects for the Middle East’s largest economy. The country is poised for growth over the next few years, but also faces significant political and social challenges. The independent study on Saudi Arabia examines all the key issues that could shape the future of Saudi Arabia: including succession issues inside the Al Saud dynasty, demographic challenges, unemployment issues, domestic business climate and key regulations that could unlock new opportunities for new businesses and investors in the country.

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3. Weekly Alifarabia.com Newsletter for FREE, including articles on Saudi Arabia’s economy
4. FREE White labelling of report: Send your company logo to aa@alifarabia.com to convert our report into your own report. This is especially suitable for company presentations to your clients, board meetings and internal research.
   
   WHY DO I GET MY REPORT AFTER 48 HOURS?
   You may be thinking why you have to wait 48 hours to get the report? The truth is that we don’t create off-the-shelf reports like everybody else. We constantly update the reports and once we get an order, we will go over the entire research to ensure we have the most up-to-date information which you can be certain is current to the day you receive it.This is yards better than a report that’s sitting on the virtual shelf for six months. Plus, we are a small team looking after lots of orders - but we make up for it by being excellent, diligent and thorough with our research.

Kuwait-based KAMCO sheds light on the future economic outlook of the GCC based on 2011 and 2012 GDP growth expectations. In addition, the report incorporates growth analysis of consumer loans in Saudi Arabia, Qatar and Kuwait for 9M-11. GDP in Saudi Arabia, Qatar and Kuwait is expected to post growth rates for 2011 and 2012, by 29% and 7% in Saudi Arabia, 35% and 7% in Qatar, while Kuwait is expected post growth of 25% and 12%, respectively, supported by the growth in oil GDP.
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From a position of chronic under-supply, the Abu Dhabi real estate market is suddenly oversupplied, which is hurting developers, banks and the end investors.

While the country and the emirate has taken certain regulatory steps to stem the slide, it seems an uphill battle, with analysts expecting a turn around only after another two years. READ MORE HERE

Standard & Poor’s Ratings Services said today that issuers in the Gulf Cooperation Council (GCC) countries face rising refinancing risks over the next three years because the amount of debt maturing in the region will increase significantly between 2012-2014.

Industry experts estimate bonds and sukuk of about $25 billion will mature in 2012, rising to about $35 billion in 2014. Standard & Poor’s believes the region is therefore entering a challenging loan and bond refinancing cycle, especially given the ongoing volatility in capital markets and fears that slowing global economic growth is already curbing corporate debt issuance and heightening refinancing risk in the region.
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With the ongoing rebound in economic activity, a question that emerges is whether inflation will increase again as it did in 2007–08 when the annual increase in consumer prices peaked at 11.1 percent in July 2008. Many of the drivers of inflation then are also present now, including higher food prices, depreciation of the nominal effective exchange rate, expansion of credit, and rising government spending.
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Dubai is the ninth worst real estate market in the world, according to a survey of 50 cities. But that is an improvement. READ MORE HERE

Jones Lang LaSalle, the world’s leading real estate investment and advisory firm, today published its 2011 Middle East and North Africa (MENA) Real Estate Investor Sentiment Survey. The report indicates that although investment appetite exists, the region is missing out on significant regional and global capital flows because of the shortage of investment grade product and the lingering price gap between buyers and sellers.

While the survey is now in its sixth year, this is a newly launched institutional edition, which focuses on understanding the perspectives of the top 30 financial institutions investing in regional real estate markets. This latest version highlights two clear trends.

First, the amount of overseas capital allocated to investing in MENA real estate is negligible.

Second, although local investors are seeking to increase exposure within the region – particularly in those countries considered stable like the UAE and Qatar – activity is limited by type of product available and asset pricing that does not fully incorporate local market risks. In a region awash with liquidity, the lack of tenable investment opportunities leads investors to deploy capital overseas.

Clearly, the MENA real estate markets have the potential to capture a much higher proportion of capital flows from both international and regional buyers. Unlocking this potential, however, will require a few adjustments: an increase in the product available; willingness of owners to transact with greater transparency; and realistic pricing that is benchmarked against global markets.

Andrew Charlesworth, Head of Capital Markets for the MENA region at Jones Lang LaSalle, said: “Whilst recent events have created some uncertainty across MENA, there are areas within the region, particularly the GCC, where there remains a reasonable level of demand among local investors. The problem is one of finding and securing the right product at a price that makes sense.”

The report also indicates that investors continue to be frustrated by the lack of bank finance and the cost of financing when it is available. Increased risk aversion is leading investors and developers to adjust their corporate strategies and focus on building stable income generating portfolios.

Lack of product, mispricing, and limited finance availability thwarts transaction, portfolio restructuring and rebalance of portfolio risk. Even for investment grade commercial properties (buildings in central locations of high demand with long term leases and strong tenant covenant) available in the region, institutional investors are simply not willing to purchase at yields available in mature markets like London. Together with limited transaction activity, the custom of privately conducting local investment deals discourages international investment and inadvertently stifles recovery of the regional real estate markets.

The 2011 Institutional Edition of the MENA Real Estate Investor Sentiment Survey focussed on understanding the perspective of 30 key regional – primarily institutional – investors, but the sample also includes some international investment groups to provide a global perspective.

Other key findings:

• Buyers outnumber sellers in all markets with a distinct polarisation occurring between those countries perceived as stable, like the UAE and KSA, and those still characterised by political uncertainty.
• In the prevailing atmosphere of risk aversion, factors like political stability and security of income are at the forefront of investment decisions.
• The majority of respondents indicated plans to increase investment in the MENA real estate market over the next 12 months. Actual transaction activity will remain constrained by the lack of suitably priced product.
• In terms of yield spread, the lack of differentiation between cities and asset classes suggests investors are focussed on achieving a specific return threshold and thus are focussed on the strength of the tenant covenant rather than the asset risk.
• Driven primarily by supply concerns in almost all sectors, investors anticipate further capital declines in many MENA markets.
• Office assets remain the most attractive investment class for this investor base, but this preference is not necessarily in line with short term market conditions.

The recent skirmish between Saudi cement buyers and sellers over price suggest that even before the new real estate projects come on line, cement prices are rising. Can Saudi cement producers deliver without letting prices run away to ensure the King’s social agenda is met? Read More Here

Egypt’s real estate sector will remain in a tailspin as developers face court cases and lose land deals. But the country still needs 550 homes delivered per day through 2015 to meet rising demand. Read full story here

Everyone knows there is a housing shortage in Saudi Arabia, and the lack of a clear mortgage law is hindering growth, but what are the other dynamics impacting on Saudi real estate? Read More

Dubai tops the list of the world’s worst housing market in the past six months, but is a turnaround imminent?

Dubai has been the world’s weakest housing market in the past six months, eclipsing the embattled and tortured real estates markets of Greece, Spain and Portugal, according to a survey from U.K.-based real estate consultancy Knight Frank.

At a time when global housing prices have risen by 2.8 per cent, Dubai’s housing prices have fallen 10.1 per cent in the past six months, and 6.1 per cent in the year. Read More On Zawya

The global inflation monster that is looming over the horizon could hurt the good work done by Saudi authorities over the past few years. Read More

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