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MENA real estate makes for attractive opportunities

23 February 2015

Diverse opportunities available throughout the region

There’s no doubt that the MENA region is one of the most vigorous, interesting and diverse regions in the world in terms of its real estate offering.

Faisal Durrani, International research manager at Cluttons said: “The MENA region is an interesting, diverse and dynamic region in terms of its real estate offering, particularly countries in the Gulf and obviously markets such as Dubai are well-known globally and offer investors a range of asset classes with yields not found in more established markets like London.”

Durrani added that what differentiates the MENA region from the rest of the world is that governments make a concerted effort to drive economic growth thereby creating jobs and demand for real estate.

According to the head of Cluttons Oman, Philip Paul, Oman is very investor friendly with good infrastructure as well as a strong legal and banking sector to support its inward investment.

Paul notes that while Oman is a smaller market compared to the UAE, there is a lot of momentum in the oil and gas sector and significant government expenditure and freehold residential incentives.

MAJOR DEVELOPMENTS

Durrani tips Tilal City in Sharjah as one of the UAE’s noteworthy developments. Tilal City is a mixed-use neighbourhood, currently under development 10km away from Sharjah International Airport, for 65,000 residents. In addition, Durrani mentions Al Maktoum International Airport and the upcoming Cultural district on Saadiyat Island, Abu Dhabi, as other major developments in the region.

“For Sharjah there is a pent up demand for both residential and office stock, both of which remain in exceptionally short supply which has helped to push office and residential rents up by about 20 – 30% over the last 12-18 months,” says Durrani.

Outside the UAE Durrani notes Bahrain’s China-themed mall, along the lines of Dubai’s Dragon Mart, as one of the upcoming developments to watch out for. The wholesale and discount-oriented mall is targeting between one million and two million visitors a year.

PROMISING ASSET CLASSES

According to Durrani, investors should keep an eye on the industrial sector in the UAE, particularly around the new airport.

“Given the fact that Dubai World Central [Al Maktoum International Airport] will have a dedicated stop on Etihad Rail just south of Jebel Ali Port it will create a logistical and transport hub. This is also being replicated in Oman on the northern coast of Sohar Port. It’s similar in Bahrain where most of the industrial estates are doing exceptionally well offering a gateway to the central Gulf,” he said.