5^th October 2008, Dubai UAE: Colliers International, the global real estate consultancy, today launched its Q4 2008 MENA Real Estate Overview.  The first and most comprehensive regional overview of its kind provides comparative key performance indicators across 10 markets in the Middle East and North Africa (MENA). According to the report the demand-supply dynamic remains positive across the region. However, against the backdrop of the global credit crisis regional investor sentiment is leaning towards a more cautious approach to the market.

As investors from around the globe gather for the start of the Cityscape Dubai exhibition, the Colliers report reveals some interesting insights for the MENA region.

Investment activity will shift in focus to properties where quality of product, location strength, supporting leisure and commercial amenities and effective facility management meet end-user requirements.

Ian Albert, Colliers Regional Director explains: "We believe that the MENA region remains an area of strong potential for real estate investment comparative to other global markets.  However, we do foresee a return to fundamentals, especially in the more advanced markets, where strongly differentiated developers with a view to the end-user able to satisfy the market will be best placed to deal with any market correction."

Extracted from Colliers' in-depth research studies into the office, residential, retail and hospitality sectors, the overview highlights the regional and local factors affecting real estate markets in Dubai, Abu Dhabi, Riyadh, Cairo, Doha, Muscat, Amman, Damascus, Khartoum and Tripoli.  It is the only report to offer comparative data on average rents, average sales price, yield, and occupancy rate as well as Colliers' outlook until 2010.

Despite differences in socio-economic, demographic and regulatory factors between the markets, the overview highlights common themes: economic diversification funded by petrodollar liquidity, improvements in regulatory and institutional frameworks, developments shifting from public municipalities to individual (though often government-owned) developers, and the increased demand for and supply of leisure and high-end developments. 

Common risks include a focus on premium products, an increasing scope for a supply glut caused by copy-cat developments, inflated market speculation and barriers to end-user participation which include entry level prices and access to finance.

"Across the regional property markets we've seen a case of 'bandwagon investment' where secondary tier developers seek to replicate the success of first movers by building similar products en masse. In the current climate market segmentation and product differentiation will be key. We expect those developers that establish themselves as strong brands and deliver quality products should outperform their competitors," said Albert.

Key report findings:

Well-planned developments will continue to enjoy strong demand, while poorly designed developments, that have so far enjoyed price appreciation due to market undersupply and speculation rather than quality of product, will be more exposed to oversupply risks.

Abu Dhabi is expected to become an important influence on regional real estate trends.  The concept of sustainable development, embodied within the Urban Planning Council's Plan Abu Dhabi 2030, and manifested in developments such as the carbon-neutral Masdar City, continue to define success in 'green building'.

Colliers expresses increasing concern at the continual focus of developers in almost all regional markets on the high-end residential segment.

Colliers expects Dubai retail rents to potentially soften in 2010, highlighting the importance of development diversification. While in Damascus and Cairo, Colliers anticipates strong retail development demand and growth.

The shortage of primary-grade office space in Tripoli and Cairo is particularly acute with 100% occupancy rates for both markets. Office rents in Dubai and Abu Dhabi remain the highest in the region.

While Dubai continues to enjoy the highest rev par across the regional hospitality market, Muscat has emerged the strongest performer in terms of year-on-year growth.

-Ends-

About Colliers International UAE
Colliers International established an office in the UAE in November 1996. The Company was formed under a joint venture with The National Investor, which is a wholly owned UAE investment bank and corporate financial advisory company.

As part of the Colliers Global network, its Middle East offices offer a full range of real estate consultancy services in all major market sectors covering offices; retail; residential; and hotel properties.

With a staffing compliment of over 100, and a multi lingual team of real estate professionals Colliers prides itself on its ability to offer a truly in-depth professional service gained from many years of active involvement in the Middle East real estate sector.

Agency Contact
Theo Hildebrand, d'pr
Tel: +971 4 3311104
Mob: +971 50 2833919
Email: theo@d-pr.ae

Eleanor Jack, d'pr
Tel: + 971 4 3311104
Mob:  + 971 50 1033161
Email: eleanor@d-pr.ae

If you would like to request a copy of the MENA Real Estate Overview, contact consultancy@colliers-me.com or visit the Colliers International stand at Cityscape Dubai 2008:
Dubai International Exhibition Centre
Hall 7, Stand 7e40

© Press Release 2008 from d'pr

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