Last month, in Davos, Switzerland, the annual gathering of world leaders, software developers and Irish rock stars was gate-crashed by a new type of rock star: private equity firms. Given that the organizers of the World Economic Forum consciously limited the presence of celebrities such as Angelina Jolie and Sharon Stone, it was the presence of Steve Schwarzman and his LBO brethren that truly sent hearts aflutter, at least if you were the chief executive officer of a public company. African poverty is disheartening, yes, but how much did you say I could make in a management buyout?
Beyond the bright lights of private equity, another topic that received significant attention at Davos was the Middle East, from the war in Iraq to the Israeli-Palestinian conflict. But among the world cognoscenti, one aspect of the volatile region went unexamined: its real estate market.
In our special report this month, we go where the delegates at Davos did not, inside the property markets of the Middle East and North Africa (p. 29). From infrastructure developments in Qatar to affordable housing in Dubai to the resort projects of Libya, the MENA region is home to some of the most dynamic and challenging property developments in the world.
Though it is still early in the development of the Middle East as a destination for institutional investors, the flow of real estate capital to the far corners of the globe is pushing private equity real estate firms to new locales on an almost daily basis. Last year, for example, RREEF, the real estate and infrastructure arm of Deutsche Bank, made its first investments in both Russia and China. Already one of the largest property investors in the world, RREEF is also ramping up its infrastructure platform and its global securities business. Beginning on p. 24, we sit down with the firm's senior leadership and get their take on the most promising areas of the globe for investment.
Speaking of promising areas of the globe, let's not overlook Kazakhstan, the oil-rich country stuck between the burgeoning property markets of the Middle East and Russia. At the end of last year, Kazakh president Nursultan Nazarbayev commissioned famed British architect Norman Foster to build a giant, semi-transparent tent in Astana, the country's capital, in order to shield part of the city from the elements (p. 6). If you thought skiing in Dubai was crazy, how about playing golf on the Central Asian steppe when the temperature hits 30 degrees below Celsius?
Welcome to the modern world of global real estate.
Enjoy the issue,