Construction & Real Estate

News Analysis: Middle East real estate map to be redrawn in 2009

During 2009, the real estate map of the Middle East will start to look very different from that of recent years. While Dubai continues its spectacular meltdown, Saudi Arabia is emerging as a contender for its crown. The latest negative news for Dubai is that Standard & Poor's Rating Services has revised its outlook on Dubai-based property developer Emaar Properties to negative from stable. "The outlook revision reflects a rapid weakening of the real estate markets in Dubai, and our uncertainties about the depth of the downturn and the pace of eventual recovery. A prolonged downturn could negatively impact our view of Emaar's business risk, and it could also lead to deterioration in Emaar's currently healthy financial position," said Standard & Poor's credit analyst Alf Stenqvist.

UAE's NBAD, Evans Randall to set up US$500m fund

UAE's National Bank of Abu Dhabi said it plans to set up a joint venture fund with a target size of US$500 million with London-based Evans Randall [ER.UL] to offer mezzanine investments in European real estate. The joint venture will focus on the British and German markets and seek to capitalise on the growing gap in the capital structure of property investments between senior debt and common equity, NBAD said in a statement. The joint venture will aim to pay annual cash returns of between 8-12 per cent to investors with projected internal rate of returns of 15-20 per cent, it said.

KAEC will be delivered on schedule: Emaar

The strength of Saudi Arabia's economy coupled with its stable investment environment have helped to ensure King Abdullah Economic City (KAEC) will be delivered according to schedule at the beginning of 2009 despite the global economic downturn, the CEO of the US$27 billion mega-development said. More than 1,000 units have been sold and will be ready to move in during the first quarter of 2009, while plots in the industrial zone will be handed over in the first quarter of next year, said Fahd Al-Rasheed, board member and CEO, Emaar, The Economic City.

Mideast investment in Euro commercial real estate falls

Middle East investment in European commercial property in 2008 is down significantly on previous years, according to the latest data from property adviser CB Richard Ellis (CBRE). There was €1.77 billion (US$2.42 billion) of direct investment in Europe by the Middle East in the first half of 2008, compared to total investment in 2007 of €5.83 billion, €6.92 billion in 2006, €5.84 billion in 2005 and €1.93 billion in 2004, according to the research.

Khalifa grants US$100m for Cairo realty venture

The Abu Dhabi Municipality will supervise the construction of the US$100 million (AED367 million) Shaikh Khalifa Residential City to be built in Cairo. The donation was made by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, said Juma Mubarak Al Junaibi, General Manager of Abu Dhabi Municipality, during the signing of a Memorandum of Understanding with Emaar Misr. The land for the construction of the city was donated by the Egyptian government.

Qatari Diar injects funds into London's Shard of Glass

Qatari property developers have secured fresh funding for one of London's highest-profile tower projects - the Shard of Glass at London Bridge - with the loan of an undisclosed sum from Qatari Diar, the state-owned real estate company. Construction of the Shard - which at more than 310m would be the tallest building in Britain - now looks assured. The development is led by a consortium of four Qatari companies - Qatar Investment Bank, Qinvest, Qatar National Bank and Barwa International - and Sellar Property Group.

Colliers International delivers Dubai House Price Index for Q3 2008

Colliers International, the global real estate consultancy, released its Dubai House Price Index for the third quarter of 2008. The report indicates an increase of 5 per cent in the overall house price growth during July to September. The year-on-year overall growth between Q3 2007 and Q3 2008 was 80 per cent. When compared to the same quarter a year before, the overall growth in prices was stronger at 5 pre cent compared with 2 per cent in Q3 2007. The 5 per cent overall house price increase remains significant given the impact of the international financial crisis on other markets. However, since the start of 2008, the index indicates the development of a trend towards a deceleration in the rate of growth, with average overall growth registered as 43 per cent in Q1, 16 per cent in Q2 and 5 per cent in Q3. Colliers expects this trend to continue into the fourth quarter of 2008, which would herald a drop in overall residential property prices.

DAMAC wins big Baghdad contract, other UAE firms in running for Al-Rashid deal

DAMAC Properties, the Dubai based construction giant, has won an investment license for a massive construction project in Baghdad, according to the city mayor Sabir al-Isawi, who also said that a number of other UAE firms are bidding on another large project in the Iraqi capital. In a statement released by his office, the mayor said that DAMAC has been awarded the first investment license for the 18,000 square metre mixed-use developments in the Bab al-Sheikh district of Baghdad, near the Tigris river.