Simon Gray, Managing Director of Chesterton’s MENA operations, commented: “The political and economic stability of the UAE have meant that it has successfully established itself as a safe haven for investments over the past few years and this has been especially noticeable over the past few months. The recent events within the wider MENA region have encouraged many investors and funds back to the safety of the UAE market and shown that despite the effects of the global downturn on property prices, there remains a strong fundamental confidence in the market and its medium – to long – term prospects.
“The general consensus is that the Dubai markets are close to bottom of the downward cycle as supply reduces across all asset classes over 2011, whilst Abu Dhabi is still witnessing a strong supply chain meaning that both cities are witnessing continued downward pressure on both price and rental levels, giving investors further pause for thought.“
Simon continues: “Many investors however are looking at the medium-term downward pressure on prices in Abu Dhabi and Dubai as a window of opportunity and are generally confident that the market fundamentals are strong: GDP is recovering, the infrastructure here is among the best in the world and is continuing to be developed, whilst our convenient geographical location and overall stability continues to attract businesses from across the globe.”
Always a good indicator of the general health of the economy, the price of Brent Crude Oil has leapt 40.85% to $118.19 per barrel over the past twelve months with a 26.66% rise in the past three months alone . These record high prices and expansion in other sectors including tourism and trade helped the UAE’s non-oil economy grow 2.1% in 2010, and are expected to underpin a projected increase of nearly 3.3% in 2011.
Simon continues, “Whilst in contrast to a couple of years ago, there is now a good supply of completed properties in both Abu Dhabi and Dubai, constraints remain for investors, be they funds or domestic investors, across all asset classes. This is due to a number of factors including: a lack of suitable product; sellers’ expectations often being in excess of market levels; and restricted debt finance, especially in the commercial sectors.
“Investors are currently waiting in the wings reviewing options but, when compared to the majority of markets across the MENA region, the UAE will undoubtedly remain the first option for investors over the short-to-medium term.”
With a growing network already consisting of offices across the UK and international offices in the EU and Australasia, Chesterton is establishing a strong presence in the Middle East and Asia, combining its long-standing global industry knowledge and the in-depth expertise of its local staff. It is currently looking to add to its Middle Eastern exposure by opening an office in Dubai in May of this year, and offices in the Kingdom of Saudi Arabia (Riyadh and Jeddah) during 2011.
Monday, April 11- 2011 @ 14:15 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.