Find alternative approaches for investment

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Is it time to rethink strategies? Organisers of Cityscape Abu Dhabi believe investors will be actively seeking alternative strategies this year in light of new market dynamics.

''The current market dynamics will prompt exhibitors and industry leaders to debate alternative approaches to their investment strategies,'' said Wouter Molman, Director of Cityscape Group at Informa Exhibitions, organizer of Cityscape Abu Dhabi, which will be held at the Abu Dhabi National Exhibition Centre (Adnec) from April 12-14. ''Market demand may be softening, but the economy is still predicted to grow, so we are confident that the industry leaders will see the event as an opportunity to develop new tactics and discuss alternative investment models.''

Molman says the predicted stable property market growth is being mirrored by marginal increase in the size of the exhibition. ''We are pleased with the demand for exhibition space, making it the largest edition in five years covering halls three to six and Atrium of Adnec.''

According to David Dudley, International Director at JLL Middle East and North Africa (Mena), the current slowdown in the UAE real estate market should be seen as a minor correction as opposed to a major crash. He says while the impact of reduced oil prices on the economy will lead to a short term slowdown in demand, this is occurring at a time of minimal supply completions leading to relatively stable market conditions.

''The market experienced a major upswing from 2013-14, led by the residential sales market, with prime residential prices growing at 25 per cent per annum. This pace of growth was unsustainable,'' he said. ''The current phase is a slowdown and a relatively minor correction, rather than a major crash, with reduced supply coming through at a time of weak demand, allowing underlying dynamics to catch up with the pace of value growth.''

Dudley believes the current shift is a sign of the real estate market maturing and that opportunities still exist for real estate development and investment focusing on end-user demand.

''While liquidity has tightened, funding is still available for project finance and corporate level lending – it is just more selective,'' said Dudley. ''The good news is that demand growth continues from projects that started when oil prices were strong. Developments such as the airport expansion or the growth of Etihad Airline have an economic multiplier effect, ensuring continued GDP growth, albeit at a reduced pace.''

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Source: Property WeeklyPW


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