Qatar has been rated as the next emerging real estate market in the GCC, according to a study by financial and professional services firm Jones Lang LaSalle (JLL) in association with Cityscape Dubai.
The study was based on interviews conducted with over 350 developers, sovereign wealth funds and high net worth investors and is the first of its kind in the region.
The '2008 Investor Sentiment Survey' showed real estate markets in the Middle East are expected to greatly outperform other parts of the world as the region is seen as one of those least affected by the global credit squeeze, Qatar, Saudi Arabia and the UAE being particularly strong performers.
Over 50 percent of the respondents said the real estate markets in the Middle East will see the strongest performance in terms of real estate worldwide over the next one to two years. "Investors suggest emerging markets in MENA, the Asia-Pacific and Eastern Europe will be least affected by the economic crisis. Almost half the respondents suggested Middle Eastern investors stand to benefit the most through their ability to export capital." This would mean potential investors could take advantage of the difficult conditions prevailing elsewhere.
Of the respondents, less than 20 percent of investors felt the current economic situation was having a significant impact on real estate markets across the Middle East while over 40 percent felt the current global economic environment is having little or no impact on their approach to real estate investment in the region.
There was optimism among 60 percent of the respondents on whether global capital markets would remain the same or improve in the next couple of years. The report said: "Almost a quarter believe Saudi Arabia will offer the strongest performing real estate markets, driven by a large and urbanising population and new legislation which is opening up the sector. Qatar emerges as the best performing GCC market with less investors expecting Bahrain, Kuwait or Oman real markets to perform the most strongly."
Ian Ohan, JLL head of Investment Transactions (MENA), said: "The Gulf region offers strong relative international value with active buyers in the region generally looking to transact eight to 8.5 percent yields for prime commercial assets and slightly higher for hospitality products. This is consistent with recent market evidence, which however, will likely bow to upward pressure as the cost of debt rises."
Investors are looking for strong capital growth in Qatar, Abu Dhabi and Saudi Arabia, 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," said Ohan.
The Pen
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