Cluttons Middle East Issues Regional Property Market Reports Second Quarter 2010
Cluttons, the real estate specialist that has enjoyed a dedicated Middle Eastern presence since 1976 today issues property market updates covering Abu Dhabi, Bahrain, Dubai, Oman and Saudi Arabia.
This move comes as the firm increases their regional presence and strength. The reports offer independent insights into the regional real estate markets. They focus on the current economic situation and the impact this has had on real estate markets throughout the region.
In the wake of the global economic downturn, the region seeks to diversify away from the traditional reliance on the hydrocarbon sector. Following several decades of property development, which has been seen as a driver for economic growth in countries such as Dubai and Bahrain in particular, governments now look to major infrastructure projects, policy change and investment in education as routes to set the foundations for future economic growth.
The Cluttons reports state that the majority of real estate sectors in the region are witnessing a short term oversupply which has led to a reduction in capital values and rents as occupiers seek to take advantage of favourable lease terms. There is still a lack of Grade A office space in most locations and emphasis must be on well planned future development linked to infrastructure(access, parking and appropriate levels of retail).
Speculation in the land market has led to land being traded as a commodity, with resultant increases in value beyond what is economically viable for final development. Coupled with relatively weak planning regimes, supply of land has outstripped demand.
Ultimately fewer master planned schemes taken through the whole development process to form communities would benefit cities more than sprawling expanses of schemes that have been developed on a piecemeal basis. This is likely to drive values just as effectively but will create better urban environments.
This has highlighted the importance of market facing schemes that cater to occupier demands. As a leading regional real estate practice, Cluttons see a recovery as being transactional lead.
This will be reliant upon increased liquidity in the banking sector and land values falling to a point where developments become viable as end schemes.
Website: www.cluttons.ae
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