Growth in the MENA region is forecast to outpace the global average in 2011, signalling the property sector is ripe for investment, according to the Middle East’s largest private developer, DAMAC Properties.
The IMF is predicting GDP will expand 5.1 per cent in the MENA region next year, higher than the forecast global average of just 4.2 per cent. The MENA region is expected to be second only to Asia in terms of annual growth, with MENA economies expanding at more than double the pace of advanced nations including Europe and the United States. “The MENA region will be a powerhouse of the global economy in 2011. DAMAC Properties, with our large regional footprint is well positioned to take full advantage of the upturn” said Ziad El Chaar, Managing Director of DAMAC Properties.
The property sectors in Saudi Arabia, Lebanon and Egypt are forecast to report double digit growth in 2011. Lebanon’s Director General of the Economy Ministry Fuad Fleifel is predicting property prices in Beirut will rise another 15% in 2011. Property prices in Egypt grew 10% this year according to Global Property Guide, with similar growth forecast for next year. Property prices in some parts of Saudi Arabia surged as much as 40% in the second half of 2010 according to Banque Saudi Fransi, and will likely continue to appreciate in the New Year.
“There are strong economic fundamentals underpinning the case for property prices to rise across the MENA region in 2011. DAMAC Properties, as the largest luxury developer in the region, is expecting a lot of activity in 2011, as investors rush to buy real estate to capitalise on the predicted upswing” El Chaar added.
Dubai’s property market is also expected to revive next year according to analysts at Credit Suisse. A recent report found the real estate market is stabilising, and should begin to gain traction on the back of improving domestic economic and financial conditions. Credit Suisse is forecasting the UAE’s GDP to rise 4.7% next year, outpacing the global average. Commenting on the market dynamics Mr El Chaar said “There is still a lot of cash on the sidelines, but there are opportunity costs to keeping liquid cash. Investors will now be weighing up their options about where to invest next year, and property is shaping up to be one of the best performing sectors.”
The region is also getting a boost from Qatar’s successful 2022 World Cup bid, with Shuaa Capital predicting Qatar may spend close to $90 billion on housing and infrastructure in the lead up to the tournament. “DAMAC Properties has several major projects ongoing in Qatar, and the World Cup announcement has certainly reinvigorated Qatar’s real estate market” said El Chaar.
DAMAC Properties will be delivering eight major projects in Dubai over the next 12 months, and currently has more than 12,000 units at various stages of construction across the MENA region. In the last 12 months DAMAC has awarded new contracts to the value of $1billion including 15 main contracts in Dubai, two main contracts in Abu Dhabi and one main contract in KSA.
In Egypt, DAMAC has awarded the main construction contract for the first phase of its exclusive shopping mall project ‘Park Avenue’ at New Cairo. One of the biggest high-end retail destinations in the Middle East, this project includes the Park Avenue Shopping district, 595 luxury villas at Hyde Park and Centre Ville apartments all overlooking a lush central park.
DAMAC Properties’ core focus for 2011 will be construction and delivery of its projects across the MENA region, with a strong emphasis on satisfying customers.