17
State-of-play:
In fact, we are having to take extra levels of risk to justify existence. EM: In emerging markets, residential is leading the way as this is where
As Qatar First Investment Bank we have invested in a new real the biggest supply-demand gap exists; followed by commercial.
estate company based out of Dubai, called Nobles Properties, Residential is driven by demographics and this is still favouring the end
and their business model is to go into investments in emerging user in emerging markets. The retail sector is not so hot right now and
institutional investment
destinations such as Libya, Iraq and Yemen. We are very bullish about is not something that we have a great affinity for.
Libya, where we have a major project coming up soon, valued at
several hundred million dollars; and Iraq is obviously up-and-coming. Is a lack of Grade A office supply in the region a deterrent to
Investment will be targeted, leverage will be moderate, and aimed potential investors?
at domestic use. All the countries in which we would like to operate, EM: If you want to invest in Grade A commercial property then
through Nobles, have severe supply-demand imbalances, and this is you really have to have lots of capital, particularly in frontier
the kind of logical economic gap we are focused on filling. markets because the people in these fledgling emerging
markets don’t, as yet, appreciate the value of a high quality
What other emerging or established markets are on the radar work environment. It’s different in places such as Doha and Abu
right now? Dhabi, and lately Saudi Arabia, which are no longer considered
EM: London remains highly attractive. We recently closed a as emerging markets in the commercial product sense, and
transaction in London for a government agency-occupied building. the value of having companies located in premium towers
The yields there are starting to look really attractive and are the with excellent facilities is a value proposition that is already
kind of figures that haven’t been seen in the city’s square mile established. Turkey also has a severe shortage of Grade A office
for the last 30 years. What we’re looking at today has significant space, and there is some demand, but whether or not the market
commercial development potential – so it’s not just a yield play is ready in terms of being able to recognise the value proposition
but a yield play with a twist. London is a lot more liquid than of top quality product, is another matter.
New York in my opinion, and the number of players – buyers
and sellers – is phenomenal, so it makes for an efficient market Where does real estate currently rank in investment portfolio
environment where you are getting really true prices, so the next asset allocation?
best thing from a liquidity perspective to having a bank deposit EM: The crisis has opened up lots of opportunities for those
is buying something in the city. That’s not to say that we aren’t people who have stayed on the sidelines, either at the
looking at places like Qatar, Saudi or Abu Dhabi. The issue there corporate level, or personally, in the last two to three years.
is that the sheer number of players in those markets make them These investors are now realising that it’s a good time for
too crowded and the margins are diminishing by the day. So this those who are long on cash and we believe that the market is
means a different approach and targeting for potential investment. starting to stabilise, although there is still further adjustment to
come in some markets. There are now opportunities available
DC: I believe the UAE is still an attractive market, although in the here that weren’t even on the horizon a few months ago. Your
long-term only. It possesses the fundamentals of a shorter-than- investment assessment today is dramatically different from
expected reversal to the trend. what it was six to seven months ago. Now it’s back to what we
would call fundamental investment appraisal. Real estate is a
Which asset classes are leading the pack in terms of institutional natural sector for us as an investment bank. We have continued
investor interest? to look at real estate and because we stayed on the sidelines
DC: Institutional investor interest is usually focused on office and for some time, now is the time for us to snap up many of these
residential income-producing properties and this is a worldwide trend. opportunities on behalf of our investment community. Some
There is not much difference in the Middle East. Some countries in of these opportunities will definitely start to disappear as the
the region are starting to witness interest from foreign investors, market begins to move again, but we are primed to skim the
however deleveraging is a priority for them. In underserved markets, cream off the top of the market.
development investments are more appealing, but not within reach by
institutional investors for the reasons explained earlier. These markets DC: My belief is that it should rank high in medium-to-long-
should be focusing on hospitality and mixed-use development term asset allocation. In particular, in downturn periods where
projects, due to the substantial gap between demand and supply, and these assets devalue and in anticipation of high inflation, as a
aging of the existing stock. The MENA hospitality market remains result of the many monetary interventions and stimulus plans
healthy compared to Europe and the US (due to structurally stronger adopted on a global scale, increasing exposure to real estate
fundamentals), with Riyadh and Abu Dhabi even experiencing a becomes paramount. Over the long run, real estate is a sure
growth in RevPar over the first half of 2009. value of diversification.
PREVIEW Cityscape Dubai
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69