ASIA NEWS: Room for some views

PERE recently spent a week in Dubai and Abu Dhabi gauging investment market sentiment after the economic crisis in the region at the end of 2009. Four real estate professionals of different disciplines offered their perspectives on development opportunities and the flow of capital in the region. PERE Magazine, March 2010 issue.

Jurgen Herre, head of Middle East at fund manager and developer Hines

PERE: How has the investment landscape in the Middle East evolved since you have been here?:

JH: Hines started its operation here about three and a half years ago. After a couple of weeks on the ground we felt the market was too speculative so we decided not to invest equity but focus on advisory work. Given where we are in the market we are now seriously looking at investing into developments and underperforming assets.

Shafqat Ali Malik, chief financial officer at Abu Dhabi’s largest developer Aldar Properties

PERE: Are you at all open to operating as a bespoke development partner to a real estate fund?:
SAM: At this stage we are looking to work on something like that with local partners. International firms are currently all bleeding. Which ones would be brave enough do anything at this stage? I’m sure there will be opportunities in the future there and if something came up we would look at it but right now I see that happening more with local partners.

Paul Davies, private equity and real estate partner at law firm Denton Wilde Sapte, in Dubai

PERE: What kind of capital is likely to want to invest in Dubai real estate now?:
PD: It is most likely to come from high-net-worth investors, not so much institutional money. I mean, who here is able to take on substantial institutional capital and really make a go of investing in distressed property? The appetite is coming more from local investors who know the risks better, although there is some money from countries like Kuwait, Saudi and India looking at the region also.

James Lewis, investment director at property services firm Knight Frank, in Abu Dhabi

PERE: Given the investment market turmoil in the region recently, what are real estate valuations doing?:
JL: Valuations are a major part of real estate, especially here given what has gone on recently. What ever numbers you had last year are now wrong. Everyone wants to revisit this area and discover just how bad things have become.