investment 16
State-of-play:
Institutional investment
With the advent of a new era of investment caution that contrasts
sharply with the growing number of exciting opportunities, is the
smart money focused on distressed asset deals in established
markets or is there still an appetite for emerging market action?
As the dust slowly starts to settle following the frenzied exodus
of capital across the global markets, investment interest is being
piqued once again both in mature economies and emerging
markets. Emad Mansour, Deputy CEO, Qatar First Investment Bank
and Diab Chidiac, Director, Real Estate, SHUAA Capital Saudi Arabia,
share their insight on exposure and opportunity.
Are institutional investors still targeting this region for real estate?
DC: I believe that most GCC institutional investors were already highly
exposed to the real estate sector in the MENA region, except for a few
who realised the sector was swelling irrationally. In contrast, foreign
investors perceive the MENA market as highly compelling today,
due mainly to better fundamentals, a proven higher resilience to the
global downturn and lower prices. The countries that are most eyed
are primarily KSA as well as Egypt, Lebanon, Morocco and Algeria.
These countries are mostly underserved across all asset classes and
catching opportunities today in these countries will be rewarding, but
at the same time challenging. Challenges stem mostly from the lack of
sophistication of investment products, poor regulatory frameworks,
high barriers to entry, tightening of bank credit and lack of appropriate
investment vehicles, in addition to the scarcity of professional
developers in these countries.
EM: I was recently talking to the global head of real estate for a
prominent international investment bank in London about interest in
raising capital for a potential transaction, whereby we would bundle a
number of cash yielding opportunities from this region (Saudi Arabia,
Abu Dhabi and Qatar) into a UK-listed REIT. The response was a ‘no’
with the reason given that there is not sufficient appetite at this point
in time in the European market for any emerging market exposure;
people are still licking their wounds.
PREVIEW Cityscape Dubai
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