Volume 10 appendix: defying the downturn
There can be few areas of the world that show so clearly the dangers of over-development than the skyline of Dubai, which once had the highest concentration of construction cranes in the world. Today, the cranes are idle, the market has stalled and there is a new mood of sobriety.
Residents of the United States, please read this important information before proceeding
Please read this important information before proceeding.
“Just a couple of years ago, anyone could buy a piece of land and become a developer,” says Ahmed Al Hatti, Chairman of Cayan Property, a leading regional construction company. “Today, everything has changed. It is much more focused on quality of project, location and the developer’s previous projects. But for established, successful developers with a good track record, there are good opportunities.”
In an environment where developers have slowed down, closed or indeed gone under, Cayan is still expanding and recruiting. Cayan is focusing a lot of attention on the Saudi market, which Mr Al Hatti believes has many interesting characteristics, including demographics. “There is a population of around 27m people with some 40 per cent of the population under the age of 15,” he says. “As a result, there is a big demand for accommodation and a government that is working hard to develop the mortgage market.”
The demographic and regulatory changes currently underway in Saudi Arabia could represent a valuable opportunity for investors. In a report published in late 2008, Jones Lang LaSalle forecast significant growth in both the residential and commercial sectors in the country. They highlighted a number of important drivers of growth, including new mortgage laws aimed at solving the current lack of mortgage finance and extending home ownership, a shortage of residential units and growth rates in the office sector that are ahead of those in other GCC countries.