Research holdups blamed for property index delays

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Property gauge: Al Mazaya’s chief executive Khaled Esbaitah (right).

The region's first ever real estate index was delayed due to "underestimations" in time allowed for research, Arabian Business can reveal.

Al Mazaya Holding, which launched the index in conjunction with Sahara Group, blamed the two-month delay on difficulties in gathering property information from Saudi Arabia. Khaled Esbaitah, managing director and CEO of Al Mazaya, said: "We were supposed on launch on May 15th but it took us an extra two months because of the size of the information we had to gather. A market like Saudi Arabia took a lot of effort to gather all of the information. The market there is so segmented and diversified and gathering the information was not as much of an easy task as we first anticipated. We underestimated the time concept."

The index, launched last week along with a website, is designed to provide the real estate community with the opportunity to follow trends within the region using a number of indices.

The general GCC index is split into sections including price, value and quantity and then subdivided into real estate types - apartment, office, residential and commercial. Each subsection is available for all of the six countries in the GCC.

Analysis reports for each section will be updated weekly to access both the current market changes as well as forecasting for investors and real estate companies. Registered real estate companies will also have the opportunity to use the site through the generated news section informing potential investors of new developments.

Esbaitah said: "The process of following up the movement of prices and quantities being traded in the entire region is not an easy task for the real estate community. The index is based on an accurate, scientific framework that allows all segments of society to benefit."

He continued: "The index provides the possibility to identify the progresses achieved in the real estate sector and the gains acquired by the various activities, as well as providing additional information based on a regularly updated database which will help investors to select the sector for their investments in a transparent, accurate and simple way."

The index cost the property developer US$4m in set-up fees, hardware, software and staffing but is not expected to turn a major profit in its first two years, instead the company will benefit from indirect gains.

"Mazaya might not make much income from the index in the next two years," said Esbaitah. "It is more of an investment rather than a income. We are, however gaining branding and publicity which we are looking for and then the benefits will start being paid back in indirect ways."

The index will be run as a separate entity to the property development business in order to maintain transparency.

This index is the first in the region and a first for Al Mazaya. The property developer, which has offices in both Dubai and Kuwait, and is due to open in Qatar and Jordan soon, has developments across the region including Dubai Healthcare City and Business Bay.

The company was ranked 34th in Arabian Business's Most Admired Companies list in April this year.

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