Gulf to escape 30% real estate slump

GLOBAL SLUMP: The Gulf is expected to escape the projected 30% slump in global real estate investment activity in 2008. (Getty Images)

The Arabian Gulf is expected to escape the projected 30% slump in global real estate investment activity in 2008, according to international broker DTZ.

The value of the global real estate capital market reached $12 trillion in 2007, up 18% on the previous year, while global investment transactions reached $730 billion. DTZ expects this figure to fall to about $500 billion in 2008.

“Few regions will escape the effects of the subprime fall out, however we predict that the Gulf region will, to a greater extent, be significantly less affected, along with certain other markets in the Asia Pacific region,” Robin Williamson, managing director of DTZ Middle East, said in a statement on Saturday.

“Indeed, we are planning to expand our operations in the region to take advantage of the strength of the local property sector.”

Global real estate transactions have suffered from continuing turmoil in credit markets that has made it difficult for real estate companies to access credit facilities.

Global direct real estate transactions were also down about 50% in Q1 2008, compared to the same period in 2007, DTZ said.

At the same time, their valuations have suffered from declining property values in some of the world’s biggest real estate markets including the US and UK.

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