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- Dubai 05:40 06:59 12:23 15:20 17:42 19:01
The Arab World needs to increase the supply of quality real estate, says CB Richard Ellis. (REUTERS)
The Middle East market needs to urgently tap into investment funds that are available worldwide for the real estate sector, according to CB Richard Ellis.
Nicholas Maclean, Executive Director of CB Richard Ellis, Middle East, told Emirates Business Dh42 billion of invested capital had flown into the real estate sector worldwide.
"However, for the past quarter the single most beneficial recipient was East Asia. Europe is catching up quickly and we expect by the end of this year it will be a primary recipient of this new capital flowing into real estate."
He said the investment market was not dead and some markets around the world were gathering momentum to invest in real estate sectors.
"There is a significant demand for real estate in the Arab World. However, there isn't sufficient stock to satiate that demand," said Maclean.
According to CB Richard Ellis, about one-third of all real estate investments is cross-border.
"It is down by half but it still accounts for one-third. If you look at the GCC share of international real estate market in 2007 it was about 11 per cent. That is income from outside of the GCC,'' said Maclean.
"In other words, the Arab World has received only about 20 per cent of the total global cash flow for investments into real estate. That is not a problem but a tremendous opportunity for us.
"If we are clever about it, we can manipulate what is happening in the rest of the world to benefit for the real estate in the Arab world."
He said there was a lack of efficient supply of real estate in the GCC region. "The Middle East markets are not delivering the type of real estate that the end-users want to buy."
Maclean said a real estate market should have a balance of both investors and end-users and they both are vital to creating a stable real estate market.
"Investors are determined they want to invest into real estate market but they have not decided what asset class they want to invest into. People are going to be flexible about the type of assets they want to buy. Also geographically they are much more flexible with respect to what they want to invest into. This is very important for the Arab World," he said.
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