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according to the latest investor sentiment survey conducted by JLL MENA in association with Cityscape Intelligence.
There are more buyers than sellers of investable assets in MENA real estate markets, according to findings from JLL MENA’s
Fourth Investor Sentiment Survey, an in depth study of real estate professionals market views conducted in association with
Cityscape Intelligence. The findings of the survey revealed a steady demand from institutional investors mainly seeking to buy strong revenue generating property – but at the right price. The report also revealed that there are signs of maturity and greater market stability in MENA markets as investor sentiment has remained broadly stable over the past six months. In general most respondents expect to see real estate prices in the region rising over the next 12-24 months albeit it at moderate levels. Further, the UAE is seen as the region’s most competitive market according to investors surveyed, largely due to the high rankings of
Abu Dhabi in the city competitiveness criteria. Internationally, investors were most optimistic about Asia as the region most likely to offer strongest growth in terms of real estate.
JLL MENA’s Fourth Investor Sentiment Survey, incorporates the views of over 100 institutional investors comprising investment companies, sovereign wealth funds, investment banks, private equity firms and high net worth investors. The survey provides a benchmark for the state of regional real estate markets and offers some insight on investor attitudes and future expectations.
Andrew Charlesworth, Head of
Capital Markets at JLL MENA, commented:
“In spite of the subdued markets, as far as institutional investors are concerned there are currently more active buyers than sellers of real estate in comparison to last year. This has not led to any increase in deal flow as there has been a limited amount of institutional grade real estate assets with strong revenue streams being offered for sale. Investment transactions have been further restricted by the continued limitations of debt available to finance acquisitions and what debt is available is expensive – this has exacerbated the gap in pricing expectations between vendors and potential investors.
Institutional investors are risk averse and are focussed on buying completed, cash flow generating properties at the right price as the market moves away from a “develop-and-sell” to a “buy-and-hold” model. However, existing owners of such assets are averse to selling at what they see as discounted prices thus creating a buyer-seller mismatch. Markets that are of most interest to investors tend to be those with large local indigenous populations which will be the drivers of real estate demand in the near term - with
Saudi Arabia and
Egypt topping the list.
Abu Dhabi is also seen as an interesting market in the long term, as it offers distinct competitive advantages in terms of its hydro carbon economic base and a defined long term vision.
In broad terms investor sentiment appears to have remained relatively stable since our
last survey in October 2009. There is also some sign of confidence returning as investors indicated they expect to see regional real estate values starting to increase over the next 12 month and 24 months for Dubai."Key findings of the report include:
MENA declines marginally but outlook broadly positive:
More buyers than sellers:
Local demand is key to recovery:
UAE seen as region’s most competitive market:
Saudi Arabia emerges as the preferred market:
Reality check across all markets:
Clearer regulations remain a priority for investors:
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