AUGUST 2010 |www.opp.org.uk


INDUSTRY Dispute over Dubai report By Robert Dale


MIDDLE East property experts are questioning a recent report released by Fitch Ratings, which concludes that Dubai’s property sector will remain under pressure at least until 2013 - and that investors may face more declines in property prices and rents. The industry “is likely to see a period


of stagnant growth at best and a double dip contraction at worst”, said Bashar al-Natoor, director of Fitch’s Europe Middle East Africa team. “Fitch believes that the credit outlook for the sector remains negative.” However, UBS head of research Saud


Masud doesn’t agree with the report’s pessimistic analysis and argues that the emirate is in a better position than that. Speaking to OPP, he noted: “The main


question is: how much of this is already priced in and how much could surprise the markets to the downside?” “We all know there are liquidity


issues, potential dilution risk for minority shareholders, overall fi nancing tensions, concerns around building oversupply and resulting decline in property prices,” Masud added. Andrew Charlesworth, head of capital


markets at property consultancy Jones Lang LaSalle in the MENA region,


INDUSTRY News | 11


NEWS IN BRIEF Yahoo and Zillow join


Gloomy or sunny? | Fitch report is dismissed as too pessimistic by local experts


shares Masud’s doubt. “There hasn’t been a massive offl oading of assets elsewhere in the world,” he said. “A lot of the banks have tried to


work and rejig the loans. They have taken the view that ‘if we do pull the rug on the loans, what are we going to do with the assets?’ My experience is that they will work with the developers to fi nd a solution.” Ian Albert, regional director of property fi rm Colliers International, agreed that mass defaults would be a “double-edged sword” for banks. Speaking to The National newspaper in Abu Dhabi he said: “By defaulting them, what are the banks going to achieve? It’s in their interest to come to the table and


negotiate with developers.” Many properties in Dubai have


already lost around 55% of their value and some analysts expect prices to fall another 20-40%. Developers such as Union Properties


PJSC are trying to sell assets to pay debts and complete projects. Yet Dubai’s property market is


perhaps not as uniform as the Fitch report suggests - while prices fell in The Meadows and The Springs districts, properties on Palm Jumeirah are still commanding high prices. Another report from Asteco predicts


that apartment, villa and commercial property prices will remain stable over the second half of the year.


Israel unveils fi rst property Expo


TEL AVIV is to host its fi rst overseas property expo next February, OPP can exclusively reveal. Exhibitors from all over the world will participate in the event, which organiser Gordon Rock International hopes will tap into burgeoning interest in investment property in Israel. “This is the fi rst time in Israel that


all of the biggest developers, real estate agencies, brokers, consumer investments, banks, property funds, emigration specialists, luxury brands and specialists will come together,” the company says. Backed by media support and a


signifi cant advertising campaign, the expo will be held at the Dan Panorama hotel and congress hall on Tel Aviv’s seafront on February 6-7 2011.


More than 6,000 visitors are expected


and many Israelis have origins and family links outside the country, making them receptive to the idea of owning property abroad. “They keep their connections with


their countries of origin and, as a result, often buy properties in the countries their grandfathers and grandmothers came from,” the organisers say. Properties from Spain, France,


Bulgaria, Turkey, Cyprus, Greece, Portugal, Italy, the US, Croatia, Morocco, Caribbean, Canada, Hungary, Latvia, Thailand, Montenegro, South Africa, Australia and Crete will be on show. Gordon Rock says Israelis are among


the most active property investors abroad and number two after Italians in terms of the overall number of overseas investment properties with holdings from the UK and US to Cyprus and Bulgaria, Thailand and India. There is going to be a wide variety


of different presentations for overseas property agents and developers at the OPPLive conference in London from October 14 to 16 2010. Please go to www.propertyinvestor. co.uk/london/ now to register.


Tel Aviv | gets a new property show


YAHOO and Zillow.com are combining forces in the US on a new internet real estate advertising network. The deal expands the relationship between the two players who claims to be the second and third most-traffi cked home sale websites in North America. The partnership will integrate Zillow’s for-sale listings into the Yahoo Real Estate website. The two companies’ relationship began in 2006, when Yahoo Real Estate incorporated Zillow’s home- valuation estimates into its site.


Singapore sales surge


SINGAPORE’S real estate prices have jumped to a record high in the second quarter of 2010. Private residential property prices rose 5.2% from April to June and are now at their highest level since the government began the index in 1975. The Urban Redevelopment Authority says that “prices leapt 5.6% in the fi rst quarter and 7.4 per cent in the fourth, bouncing back strongly after diving 25% in the 12 months to mid-2009.” The government earlier this year imposed a 1-3% tax on residential properties sold within one year of purchase and lowered the loan- to-value limit to 80% on loans for private housing.


Baghdad opens its gates WORK is about to begin on one of the biggest residential developments projects in post-Saddam Iraq at Baghdad Gates. Run by Iraqi- Jordanian real estate company Amwaj International, it will cost US$238 million and will include 3,500 residential apartments. Iraq has a chronic housing shortage and, as refugees return, the demand for homes is increasing.


Atlanta InterConti is sold


INTERCONTINENTAL Hotels Group has sold its 422 room InterContinental Buckhead Atlanta to the Maryland- based Pebblebrook Hotel Trust for $105 million in cash. IHG will continue to manage the hotel under a long term management contract. IHG opened the hotel in November 2004 as the fi rst newly built luxury hotel to enter the Buckhead market for over a decade. It generated a revenue of $30.6m in 2009 and Pebblebrook says that it will invest approximately $7m in improvements.


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