Ghassan Youssef is the managing director of Rakeen, the real estate arm of RAKIA (Ras Al Khaimah Investment Authority) in the United Arab Emirates. Rakeen recently launched its new ultra high-end project in Beit Meri, Lebanon. ‘Beit Meri Sunset’ is comprised of 10 residential villas and nine apartments. Executive sat down with Youssef to discuss issues related to the project and the company’s investment plans in Lebanon.

E I know you started the sales of your project in Beit Meri in September. How much have you sold so far? And to whom?

We secured 20 percent already in the first two weeks. People interested are half locals, half [other] Arabs. But the target [segment] in Lebanon is always the locals and Lebanese expatriates. Then it is our cousins, the Arabs who love Lebanon and want to have a stake in the country. So they target Lebanon, whether for business or residential [purposes], to have a place to stay when they go to Lebanon because they love to go to Lebanon.

E Do you think that the fact that the government formation was delayed will affect interest in your project?

This is an important question. The answer would be no, because people are used now to the unstable country which is Lebanon. People are used to the political storms, so if Lebanon is not like this, then something is wrong, and maybe then I would worry about it. But now everybody knows that if there is a cabinet or not, Lebanon is there to stay and to prosper and people are investing and the real estate market is jumping from one month to another in positive numbers.

E So you think that even if a cabinet was formed, this wouldn’t result in you having more sales?

It doesn’t affect us. If they stay like this for a year or there is cabinet in the next two weeks, it doesn’t affect me. Now, obviously, if the cabinet is up and running in the coming few days you will have the stock market up and running. You will have a momentum created in the country. Then ok, the positiveness is there and we have a cabinet. The bottom line is that the outcome of the cabinet is not the cabinet itself. In Lebanon the private sector runs the country and not the public sector. In that perspective, the outcome of having a cabinet would only be that there is a positive atmosphere that all parties in Lebanon are fine together.

If it was 10 years go, I would tell you you’re right. But now everyone knows. During the July 2006 war, Lebanon suffered for a month, and then next month, everything was up and running. Now people who don’t know it will fear it. But your target segment is the people who know Lebanon. The Arabs know Lebanon more than the Lebanese know their own culture and they love it the way it is.

E Did you start construction? And how long will it take to complete?

We took the license and we started now on the project. It is our first project in Lebanon, but not the last. It is the first project and it is a very small project. When we say 10 villas it might be big but if you compare it to our projects worldwide, it is a tiny project — it is around 10 percent of our projects overseas. Regardless of sales, we have a target of one and a half years to finish. So in two years, you as a client will be living in that house.

E So construction is independent of the sales?

True. If I sell, it would be better. If I don’t sell now, I will increase my prices later and keep on construction.

E What is the value of the project and how is it financed?

I don’t know if I can tell you the whole value of the project. But you can assume we are talking about $2 to $3 million for a villa, and we are talking about 10 villas. But I cannot give you the numbers to tell you this is how much it is going to cost me and that’s how much it is going to sell. It is financed by us, pure equity. We did not take any loans for it.

E I know that you have a diversification strategy since you have projects in so many other countries. Can you tell us about it?

Our chairman has a very strong appetite for emerging markets, and this is where we are. We are present in the emerging markets. Our strategy is not like other real estate companies who go into building luxury resorts. We are into mixed use outlets. We have a mall, an office tower, a residential tower, a hotel etc., that is our segment. That is how we build our projects. We have a beautiful project in Tbilisi, Georgia. It is an amazing market. We are building the biggest shopping center in Georgia — 70,000 square meters. We have the World Bank as partners with us through the International Finance Corporation in that project because they love it. With this shopping center comes an office tower and a residential tower. So that is the kind of scale of our projects.

E What about the financial crisis? Has it pushed you to diversify more or is it a setback?

We did not stop the projects, and we did not adopt a speedier construction model. We are still in business as usual. The only thing I would say about this crisis that affected us is that we are not starting new projects. We used to start three to four projects per year, now we will say it is one project per year or none. And it will be the strategy for the coming three years, to honor our commitments to the market. And that is what counts, our reputation.

E So can we say that when you have future plans in Lebanon, they will be in the next three years?

We are planning to expand in Lebanon, and that is the one project that I talked about. It is in Lebanon. I want to expand in Lebanon because it is a beautiful market. Not because I am Lebanese, not because I only believe in Lebanon; I truly believe in Lebanon and I know that Lebanon is there to stay. It is like Dubai. Now everyone talks about Dubai and the crisis and now bad it hit Dubai. But Dubai is there to stay and prosper again and again. And I give you my word on that.

I have a land bank in Lebanon. I started this project, but I have other lands in other areas. There is no specific time for this, but there are plans. And we are also in a position to acquire new land in Lebanon. We are only doing this in Lebanon, not in other countries. We believe that Lebanon and Syria are going to expand and prosper. There is a big need. Syria is underdeveloped. Lebanon is super developed, but yet if you take all the available land now, the plots available to construct in Lebanon are very rare.

You have four million Lebanese in Lebanon, and you have 16 million or even more Lebanese abroad. Let’s say you have 20 percent of these aboard who want to come back one day with their kids as well, plus the growth that you have within the Lebanese in Lebanon, plus the interest of the Arabs all over. The attraction of Lebanon is the hospitality of the Lebanese and the way they deal with people, how they welcome them, how they love life and know how to live it.

Lebanon’s real estate market, especially its high-end segment, has been directly impacted by internal and external constraints. Both the financial crisis and the delayed formation of a new government have buyers thinking carefully about their next investments. Still, considering current circumstances, the market performed fairly well this season and developers are more or less content with the overall outcome.

Sales numbers have not drastically dropped, and prices did not decrease further than the 10 to 15 percent recorded in the first six months of the year. But experts agree that units priced at above $1 million are hard to sell, and demand is concentrated on the lower market segment — mostly ranging between $300,000 and $700,000.

Moreover, even though Gulf investors don’t represent a big chunk of the demand, they were particularly absent this summer.

“[The high demand] has materialized to a large degree for the Lebanese, but less for the Gulf people who have been waiting for the government to be elected or to be formed,” said Nabil Sawabini, chairman and CEO of Mena Capital. “So its late formation has delayed some of the potential sales that we were expecting.”

Hani Haddad, managing director at A&H Construction and Development, agreed with Sawabini.

“Gulf investors have been asking a lot but not buying a lot. After the elections they started buying but not as much as they used to before. They are still very hesitant compared to normal,” he said.

With Gulf investors adopting a wait-and-see approach, the demand is mostly Lebanese, either locals or expatriates. However, with budgets cut due to financial difficulties, there is a new trend sweeping the market. While maintaining luxurious standards, Lebanese buyers are currently looking for smaller apartments with smaller budgets, which are now hard to find.

‘Smaller’ is the trend

“We want them (developers) to decrease the size for the budget to decrease,” said Christian Baz, general manager of Baz Real Estate. Baz gave examples of some of his customers wanting small but luxurious apartments for around $400,000 in decent areas.

“There is no supply to meet the demand; those who were demanding apartments for more than $1 million have disappeared,” said Baz.

High-end developers concur with Baz, admitting that smaller apartments are what buyers are looking for at the moment.

Karim Bassil, chairman of Byblos Real Estate Investment (BREI), said he is struggling to sell larger apartments.

“Some people that are used to living in 400 square meter apartments are looking for 200 square meters. And some that are used to Beirut are willing to go outside the capital; there is no easy cash like there was before,” said Bassil.

Consequently, developers are aiming to target a lower market segment through their future projects, thus satisfying the true demand in the market.

“There are definitely many who are looking for different types of properties, which we don’t have today, but we will hopefully have in the future,” said Sawabini. “In terms of size, it doesn’t have to be very high-end as most of our projects are. But high-end, good quality, decent location and smaller sized apartments are definitely the demand and we will be satisfying it.”

Summer property indicators

Construction permits (in square meters)

What numbers say

In the first six months of 2009, real estate sales transactions dropped 3.3 percent year-on-year, according the Bank Audi second quarter real estate report. The report added that in the same period, sales transactions to foreigners dropped to 9.6 percent, compared to 18.5 percent in the first half of 2008.

This summer, adding June and July together, foreign sales increased 8 percent year-on-year. According to Sawabini, the increase is not an indicator of the activity during the two months. A big part of sales could have been agreed upon in April or May, while contracts were left to be signed in June or July. So July numbers could be an accumulation of the former three months because many people don’t come to Lebanon until the beginning of the summer.

As for the total number of sales transactions, it registered a decrease of 7 percent over the same period. This number also is not very indicative, experts say, because even though it gives an overall assessment of the sales activity, it does not show what the demand is truly for. Baz explained that numbers don’t show if the apartments sold were small or big, thus not giving a true indicator of the market demand.

“There is also an old apartment that was sold for $800,000 and registered at $400,000,” he said, adding also that it is possible for a sale to be registered in the name of a Lebanese company owned by a foreigner.

“There are no regulations. We know [more] because we are the ones who are selling.”

Government or no government

Many factors play a role in determining the future expectations of the Lebanese real estate market. Although it has always been considered a safe haven for real estate investments, some say that the delay in forming a government, rather than the financial crisis, is the main reason for the slowdown in demand. Sawabini from Mena Capital said that without a government being formed, sales could be cut in half.

“They are investing millions of dollars — they want to have more insurance,” he said.

Haddad from A&H agrees, saying that he sold a lot more last summer, and when the government forms sales will surely pick up again.

Other market players disagree, arguing that the internal factors have become a usual trend and buyers are interested regardless.

“Some say that [the slowdown in demand] is due to the situation in Lebanon, but I don’t believe it that much; we had worse times,” said BREI’s Bassil.

Whether the government is formed or not, or if the financial crisis eases or not, developers have a job to do in order to satisfy current market needs and meet demand.

“It is very important going forward that whatever we develop we don’t develop haphazardly, that we begin to be more conscious and differentiate our projects in a matter that would make them more attractive,” said Sawabini.

“Those who were demanding apartments for more than $1 million have disappeared”

One year has passed since Dubai’s real estate sector started its downhill slide. Since then, investors have fled the market, prices and rents have dropped, property disputes have risen and many projects have been canceled or put on hold. Needless to say, it’s been a bumpy ride.

But since the second quarter of this year, things have begun to stabilize. Prices and rents are more or less steady in many areas and developers have been consolidating in a bid to try to strengthen their financial positions. These are signs that confidence in the market is starting to come back. And while the worst may seemingly be over, the emirate is still expected to witness a tough year in 2010 as more units come online in a market where demand remains fairly weak.

Slowly but surely

Buyers are now “cautiously optimistic,” said Linda Mahoney, CEO of Better Homes. “We are seeing some confidence coming back, but it is going to take more than nine to 10 months” for confidence to be strong again. Current demand, although low compared to 18 months ago, is mostly coming from end-buyers — people who actually want to live in the units — or long-term investors who find current valuations attractive.

Charles Neil, CEO of Landmark Advisory, an arm of Landmark Properties, said that from April to July the company has seen an “increase in activity” in leasing and overall sales because “people took advantage of falling rents.” He added that demand for off-plan properties is still non-existent due to the unavailability of mortgage financing for such developments and buyers having doubts over whether they will ever be completed.

In terms of properties that are finished or close to completion, it seems that mortgage financing is slowly reentering the market, even though this time around banks are being very careful with how much they lend and to whom. As such, experts are predicting that the lending situation will gradually improve.

“We are anticipating that a number of banks are looking to re-enter the mortgage market towards the end of the year or early next year,” said Ian Albert, regional director of Colliers International.

Coupled with the mild improvements of Western stock markets in recent months, experts say Dubai’s real estate sector is expected to stabilize in 2010, and perhaps even start to recover by 2011.

Residential market stabilizing

According to most experts, residential property prices have fallen some 50 percent since the beginning of the crisis. In the second quarter of this year alone, housing prices in Dubai fell around 25 percent,  according to the global real estate services firm Jones Lang LaSalle.

Out of 32 countries examined by the United Kingdom-based Knight Frank real estate agents, Dubai recorded the largest year-on-year drop in housing prices (at 47 percent) for the period up to July. The company also added that prices now are falling at a slower rate.

Real estate experts have also stated that the decrease in prices is mostly contingent on the attractiveness of the area. As such, buyers are currently searching for communities that already include infrastructure, restaurants, schools and leisure facilities. Some of these developments have even witnessed some appreciation in the last few months.

Residential supply and demand

“In Dubai Marina, there are shops, office space, hotels, restaurants… there is a community where people can live and work,” said Elaine Jones, CEO of Asteco Property Management. Jones also explained that sometimes prices in the same development might differ, depending on the quality and the facilities. “And now you have the metro for example,” she added, which would make the surrounding areas more attractive.

After the hefty decrease in prices, players are also waiting for the market to hit bottom. Even though prices have begun to stabilize, most experts agree that they will drop further as new supply comes online.

For example, Saud Masud, a Dubai based analyst from UBS, the global financial services firm, told Bloomberg that housing prices in Dubai will drop about 33 percent to reach $1,754 per square meter, and the market will only bottom out in the next 12 to 18 months. According to UBS, 30,000 new homes will be completed by 2011, but it also stated in June that the new supply coupled with the decrease in population will leave one in three homes vacant by 2010.

While that may be the case, when it comes to predicting the actual oversupply amount on the market for year’s end 2009, there seems to be little consensus. Jones Lang LaSalle is expecting 22,400 new units while JP Morgan expects 30,600 new units, adding that this will lead to an oversupply of some 28,500 units. 

“With the new supply coming on between now and the end of the year, given the population growth has slowed, if not contracted, it will take some time for the market to absorb the new product coming on stream. It could take up to 12 to 18 months,” said Sana Kapadia, vice president of equity research at EFG-Hermes.

Ziad Chaar, general manager of Damac Properties, adds that although prices have stabilized in some areas, the reason why they are still decreasing is because of the sale of distressed properties below the market value pushing prices down. He explains that many investors who have commitments in the emirates and abroad are still willing to sell at low valuations.

As new supply comes to its handover stage, rents are expected to drop further

Rents

Rents, like prices, are also expected to decline due to the oversupply in the market. However, the degree to which rents have decreased since the beginning of the crisis varies depending on who you ask. Chaar said they have dropped 35 percent, while Mahoney from Better Homes said the figure was as much as 50 percent and Colliers’s Albert puts the figure at 18 to 40 percent, depending on the area. Albert explained that it takes longer to deflate rental prices, mainly because people are engaged in one or two-year contracts while property prices can change every day.

Landmark’s Neil, however, said there is an “artificial shortage,” whereby landlords prefer to wait until rents go up again. “Towards the end of the year, more units will come to the market for rent and prices will come down further.”

Although rent prices have dropped, the leasing market witnessed a good amount of activity this summer. With the sales market more or less on hold, people who used to buy property now choose to rent. Moreover, those who need to renew their contracts are looking for cheaper or larger apartments, as are those living in neighboring emirates who are looking to capitalize on the current valuations.

Asteco’s Jones said her company is experiencing record numbers in term of leases and is content to go back to the “fair market prices” of late 2006. As new supply comes to its handover stage, rents are expected to experience more downward pressure depending on the attractiveness of the area and the quality of the development.

“Rents have stabilized, but there is a lot of supply coming on,” said Albert. “I think it will soften again towards the end of the year.”

Office market 

Sale prices from 2008 peak to Q2 2009

Rental prices from 2008 peak to Q2 2009

Of all the real estate sectors in Dubai it seems the commercial market has been hit the hardest. This comes as little surprise since the flow of new businesses into Dubai has decreased and existing businesses are either closing down or moving to smaller office spaces due to the effects of the global downturn.

“Commercial rents could certainly have dropped 50, if not 60 percent, depending on the location,” said Better Home’s Mahoney, adding that this even applies to offices on Sheikh Zayed Road — otherwise know as the E11 highway, the main traffic artery running through most of the UAE, along which most of its skyscrapers are located. According to Jones Lang LaSalle, office rents have declined at around 45 and 25 percent in the first and second quarters of this year, respectively.

Jones Lang LaSalle’s second quarter report also said that by the end of 2011, 2.3 million square meters of additional office space will enter the market, placing even more pressure on rental prices. Moreover, investors who used to buy office space and then lease it to companies have all but disappeared from the market, which has also increased office supply.

“There is a huge supply in office space. Between 2008 and 2011, office supply would have doubled,” said Neil. He added that office rents have decreased about 50 percent and maybe 30 to 40 percent on Sheikh Zayed Road.

Most experts predict that the office market has not hit bottom yet and will continue to drop next year as new units become available and remain vacant due to a lack of interest from companies.

A year of stabilization

Most informed sources agree that 2010 will be a year of consolidation and stabilization while 2011 will see the beginnings of a recovery. That said, what is keeping analysts anxious is doubts over population sustainability coupled with the new supply that may further increase the surplus of units on the market.

Even considering the difficult times predicted for next year, if a general economic recovery does occur, Dubai’s real estate market is poised to recover quickly, due to its relatively advanced infrastructure and its attractiveness to new business ventures in the region.

“I don’t think the new supply is going to take more than one year to be absorbed. But the advantage will be that the entry cost for residential or office space will still be significantly low,” said Jones Lang LaSalle’s Regional Director Fadi Moussalli. “Dubai will still have the underlying macroeconomic benefits.”

If a general economic recovery occurs, Dubai’s real estate market is poised to recover quickly

At Cityscape Dubai last year, Gulf real estate firms launched some $100 billion worth of new projects on the show’s first day. But expectations for this year are markedly different. Considering the struggle that the regional real estate market has been going through since September 2008, few or no projects are expected to be launched and the number of exhibitors and visitors will likely be a fraction of last year’s.

Rohan Marwaha, the managing director of Cityscape, told CEO Middle East magazine that the exhibition is expected to be 25 to 30 percent smaller than last year, though official figures indicate the number of exhibitors will be markedly less.

“Considering the global economic turmoil, it would be unrealistic for anybody to assume that the event will be as big or attract as many visitors as last year,” Marwaha said.

At Dubai’s Novotel Trade Center, where rooms are usually booked for developers in order to close their real estate deals, seven out of the eight rooms were still free in mid-August. Novotel Staff told Arabian Business that by this time in 2008, all the rooms were booked, in addition to the aerobics room.

Linda Mahoney, CEO of Better Homes LLC, agreed with Marwaha, and gave the example of MIPIM, the property show in Cannes, France, which is considered the world’s biggest property exhibition. She said that the number of exhibitors was not very impressive.

“Many exhibitors from around the world were not there, and most of the exhibitors from the Gulf region were not there either,” said Mahoney.

Back to basics

Real estate experts think that Cityscape this year will play its primary role of bringing contractors, developers, architects and market players together, rather than being solely a retail show. Therefore it will go back to being a business-to-business (B2B) venue rather than a business to consumer (B2C) one. Ian Albert, regional director of Colliers International, said that this year’s Cityscape cannot be compared to the 2008 event, but is more comparable to Cityscape Jeddah this year, where few transactions took place.

“It is going to be a B2B show and not the retail event that it has been for the previous four years, so you can’t compare it,” said Albert.

Increasing rates

Surprisingly, the cost of exhibiting at Cityscape has increased 15 percent, according to the event’s organizers IRR Middle East. They did not comment on the issue further, but according to Arabian Business, the increase could be split into two years if the company is planning to also participate in Cityscape 2010, a 7.5 percent increase in 2009 and 7.5 percent in 2010. The magazine also said that sponsorship costs for exhibitors was cut by 25 percent and that this year’s event will feature several “not-for-profit” events such as seminars, round tables, and a CEO networking luncheon.

“Of course it bothered us — we did not like it, but we wanted to be in,” said Ziad Chaar, general manager of Damac. “We tried to negotiate, but it was not feasible.”

Most market experts seemed to agree with Chaar that raising Cityscape’s fees was a bad idea.

“I think they have made a big mistake in raising the rates; they should be reducing them. It is the last thing you do in a downturn,” said Charles Neil, CEO of Landmark Advisory, part of Landmark Properties Dubai. He added that this will result in a much smaller Cityscape then would already be the case. 

Cityscape 2008 figures

Who’s participating?

Compared to 954 exhibitors in 2008, this year’s four-day Cityscape will only host 175, according to the list provided by IRR Middle East in mid-September. The sizable decrease in numbers was more or less expected, either because developers had nothing to launch, or they were cutting back on expenditure.

For example, Albert explained that Colliers International is not going to take part in Cityscape due to “budget cuts.” Property development companies Limitless and the Abu Dhabi-based Sorouh Real Estate, are also not participating.

The same was initially thought of real estate giants Emaar and Nakheel when they announced they wouldn’t participate in Cityscape.

Maktoob Business initially reported that Nakheel was not participating because it wanted to focus on the completion and handover of existing projects.

But in an apparent about-face just days after their official announcement, Emaar and Nakheel came out to say they would participate.

“The decision follows discussions with the various agencies involved in organizing the event,” Emaar said in a statement.

There has been speculation that the absence of the two government backed companies would reflect badly on the emirate’s real estate sector, particularly given the prominence Nakheel played at last year’s event when it announced the $38 billion, one kilometer-high Nakheel Harbor and Tower project. The mega-project has since been put on hold.

“If I see that Emaar and Nakheel are not there, it doesn’t show confidence in the market,” said Mahoney before the companies revised their decision. 

Limitless said their decision not to attend, “is part of our overall response to the global economic situation.” 

Fadi Moussalli, the Dubai-based regional director of the global real estate services firm Jones Lang LaSalle, said being on the list of non-participants is indicative of having nothing new to launch.

“Obviously the rational is: do you have anything to sell? If you do, you have to be at Cityscape. If not, why incur the expenses?”

Still, it is not expected that developers — even the ones who will participate — will be launching new projects this year. As most have been doing since the beginning of the 2009, developers will concentrate on finishing their existing projects and showing the market that project development is still underway.

“Our focus this year is the right focus, which is construction and delivery, and not developing more projects,” said Chaar from Damac.

“If someone wants to launch a project at this time, they will probably get a great deal of media coverage. It would be extremely courageous to launch anything this year,” said Elaine Jones, CEO of Asteco Property Management. Asteco will not exhibit at Cityscape this year, primarily because their clients have nothing to launch.

What to expect

Cityscape 2009 will be interesting this year. Though expectations are low in terms of the crowds and new launches, the show may offer  parameters for measuring confidence in the market.

“I would be curious to see what is there, who is there, who comes… are there going to be more overseas people? Are we going to see more foreign as opposed to local developers?” said Mahoney.

After a period of sustained activity characterized by high-profile investments and significant appetite for trophy assets, sovereign wealth funds (SWF) in the Arab world felt the repercussions of the global financial crisis, and significantly reduced their real estate investment activity. The drop in oil prices in the second half of 2008 led Arab governments to tighten petrodollar cash allocations to SWFs, as reduced fiscal surpluses had to be used in priority to complete infrastructure spending and salvage domestic economies. With almost no exceptions, SWFs from the Gulf refrained from investing in overseas real estate markets for the past 12 months.

This situation prevailed up until June 2009, when two SWFs executed two high profile transactions in their preferred destination, the London real estate market. The Oman Investment Fund acquired 75 percent of a major City of London development in a joint venture with Hammerson in a staggering $733 million transaction. Furthermore, the Libyan Arab Foreign Investment Company (LAFICO) acquired a 100 percent interest in Portman House, a high profile mixed use building on Oxford Street from Land Securities for $255 million. In addition, we have strong evidence that other Arab SWFs are reviewing investment opportunities not only in London but in other major European hubs as well.

Are Arab SWFs returning to the real estate scene?

To get a clearer understanding of the situation we need to dig a little deeper into the details. While it is true to say that the London real estate market offers an extremely compelling story, as prime yields are in excess of the 25 year high, and the recent depreciation of the British pound improves purchasing power of US dollar pegged currencies, it is worthwhile noting the Oman Investment Fund transaction was achieved through a relatively modest injection of equity and taking advantage of the existing imbedded debt structure. OIF now owns 75 percent of the joint venture of one of London’s best pieces of real estate and enjoys a minimum of 18 years secured income stream to Allen & Overy as the major tenant who occupies the majority of this asset.

London’s long-term prime yields

On the other hand, after a long period of frozen overseas investment activity due to the international sanctions imposed on Libya, LAFICO has marked its return on the international real estate investment scene, completing two deals in London in the past six months. LAFICO is undergoing a profile exercise to rehabilitate its image in the international investment community, and spending a small part of its long accumulated fiscal surpluses at a time when global real estate markets have significantly re-priced.

With the exception of the LAFICO, our assessment is that Arab SWFs, in general, are still some distance away from reinstating their traditional overseas real estate investment activity. A somewhat cautious view was still prevailing up until the beginning of the summer amongst this investor group, and whilst some of those sovereign vehicles could have a vulture-like behavior and act in the most opportunistic way, we believe the general trend for the coming 12 months will be to direct cash surpluses towards domestic priorities and honoring of past financial commitments.

The realization and accuracy of our forecast depends on several factors including the oil price level that will play a vital role in terms of determining the volume of Middle Eastern capital to be invested in overseas real estate markets, and the reversal of the wait-and-see stance, which will obviously be linked to the speed and magnitude of the recovery in Western economies.

Fadi Moussaffi is regional director at Jones Lang LaSalle