The real estate markets of the Middle East will outperform all other regions, according to findings from the Investor Sentiment Survey, an in depth study of real estate professionals market views conducted by Jones Lang LaSalle in association with Cityscape Dubai, the world's largest real estate conference and exhibition.
The report also reveals that almost half of all respondents believe UAE will offer the best performing real estate market in the Middle East over the next 1 - 2 years, with the Kingdom of Saudi Arabia to be the next best performer. Pooling the views of a sample of over 350 developers, sovereign wealth funds and high net worth investors, the survey is the first of its kind conducted in the region. Jones Lang LaSalle is the world's leading real estate advisory firm and was recently recognised by Euromoney Magazine - Liquid Real Estate awards as UAE Property Advisory Firm of the Year at a prestigious ceremony in London.
'This report is not only the first of its kind undertaken in the region, it will provide a critical benchmark as we look to evaluate this vital sector in the coming months and years,' said Blair Hagkull, Managing Director, Jones Lang LaSalle, MENA. 'Sentiment is a critical component when considering the health of any market. It is an important barometer, a key assessment criteria for any investor and the ideal gauge for considering future prosperity. We are thrilled to be releasing this report, conducted in association with Cityscape at Cityscape Dubai 2008. It is planned that this new benchmark for the health of the regional real estate market will be repeated.' The 2008 Investor Sentiment Survey was undertaken in the aftermath of the collapse of US Investment Bank, Lehman Brothers and is thus the most up-to-date and relevant source on investor sentiment in the MENA region.
Commenting on the survey's findings, Ian Ohan, Head, Investment Transactions, MENA at Jones Lang LaSalle said: 'The Gulf Region offers strong relative international value with active buyers in the region generally looking to transact at 8 - 8.5% yields for prime commercial operating assets and slightly higher for hospitality product. This is consistent with recent market evidence, however will likely bow to upward pressure as the cost of debt rises. 'Maturing markets is the key theme here. Asset pricing in the region is increasingly being underpinned by cash flow valuation reflecting a shift from development-led to capital-based real estate markets. We are anticipating greater transaction activity as sellers' value expectations begin to more closely resemble income valuations as debt markets tighten and speculative exit opportunities decline.'
'Investors are looking for strong capital growth in Abu Dhabi, the Kingdom of Saudi Arabia and Qatar, reflecting their robust economic potential and more nascent stages in the real estate cycle. The issue of market transparency is high on the agenda of investors. This is being aggressively addressed through sustained government initiatives including the enacting of international best-practice legislation and the enforcement of strong corporate governance initiatives.'
