Abu Dhabi, Saudi, Qatar to lead real estate rebound

Abu Dhabi, Saudi Arabia and Qatar are predicted to recover first from the impact of the global real estate slowdown, a new report by Jones Lang Lasalle said on Thursday.

The three hydro-carbon powerhouses are expected to rebound quicker than others in the MENA region while concerns of over-supply will continue to slow any upturn in the Dubai property market, the report added.

According to the company's third semi-annual Real Estate Investor Sentiment Survey for MENA, a "marked improvement" had been seen with "significant demand" being seen for the right product.

Ian Ohan, head of MENA Investment Transactions at Jones Lang LaSalle, said: “Investors are much more positive than they were six months ago. Our previous survey concluded that 2010 was shaping up to be the ‘vintage year’ for real estate investment in the MENA region and our latest report confirms this view.

"What we can also see now is a clear rationale for investment strategy over the next 12-24 months and a recognition that the right products located in the right places will attract investment."

Regarding Dubai, he said that while short-term concerns around liquidity and over-supply remained, a return to 2007 pricing "will see Dubai enforce its competitiveness as one of the region’s leading destinations for investment".

Abu Dhabi, the report added, was considered by survey respondents to offer "significant over-all potential".

Ohan added: "Surprising to many will be our finding that there are more buyers than sellers for genuine investment grade product. This highlights the paucity of such product in the MENA markets and the obvious opportunity for owners to better package their projects in line with the expectations of the sophisticated long term investor.

"That MENA has returned to a more positive footing just 6 months after the first crack in sentiment appeared is an incredible turn around and suggests 2010 will be a year of significant development.”

The survey results also revealed that 26 percent of 225 investors asked thought the Middle East would be the best performing market over the next 12 months.

Last month investment bank UBS said house prices in Dubai would fall another 33 percent from current levels, on top of a 47 percent annual drop.

According to recent figures from Deutsche Bank Dubai will face an oversupply of 32,000 new homes next year.

Vacancies in the office sector in the emirate are around 25 percent and average occupancy rates in hotels are 65 percent, the report added.

In the past year Dubai has gone from being the best performer out of 46 markets monitored in the Knight Frank global house-price index to the worst.

The slump ended a construction boom that had created thousands of homes just as demand began to evaporate.

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