New trends and investment hotspots

In its 12th edition, the International Property Show (IPS) 2016, saw exhibitors from around 100 countries, a healthy 25 per cent increase since last year. Since its inception, the exhibition has focused on the business-to-business and business-to-consumer segments, enabling direct transactions where all exhibitors are entitled to collect down payments as well as present title deeds to purchasers.

The show does not target specific regions, but it boasts a global reach to explore new real-estate destinations that could carry promising real estate investment opportunities, says Dawood Al Shezawi, President of Strategic Marketing and Exhibitions, the organiser of IPS 2016.

Between 2006 and last year, the show has already triggered  transactions worth more than $40 billion (Dh146.92 billion), and over the past decade it has attracted around 99,883 visitors, with the UAE generating the highest value of deals.

Shezawi says the focus this year has been on soughtafter markets by UAE investors, such as Turkey, India, UK, Pakistan and Egypt.

“We attract participants from new countries following a study of their markets, to ensure we display effective opportunities to investors in the UAE and the GCC region,” says Al Shezawi. “We also organise a preevent networking function, to put together confirmed participants and visitors.”

Al Shezawi says the top participating countries in the show are the UAE, UK, India, France, Turkey, Spain, Italy, Saudi Arabia, Qatar, Kuwait, Russia, US and the Philippines. There are also offerings from relatively new strong markets such as Greece, Poland, Australia, Canada and Spain.

New additions

New additions this year include the debut of the Pakistan pavilion. Investment immigrant visas are also on offer to various destinations in Europe and Australia, where visitors could obtain permanent residence visas. Organisers also reveal that millennials are becoming more prominent players in the market as shown in this event. With so many new homes slated to enter the market, demand is projected to increase rapidly, especially from the millennials, those born between 1976 and 1990, who are more inclined to buy homes instead of rent.

Global outlook

A key global trend, according to Colliers Global Investor Outlook 2016, is that investors still want to invest in real estate. Transaction volumes across regions are expected to increase, albeit with fewer investors expecting to be net buyers. Allocations to direct property by multi-asset funds will continue to increase globally.

Gateway cities such as London, New York and Tokyo, which are generally the most liquid markets, will continue to appeal to crossborder investors. Increasingly, investors are looking to partner with local expertise to provide greater confidence in overseas diversification. Macroeconomic and political threats — such as further interest rate hikes in the US, China’s economic uncertainty, as well as geopolitical risks — will see investors curb their risk appetite in some markets.

According to the survey, more investment decisions will be made on a longterm basis, hence prices for matching assets will rise further, especially in safe haven markets. While the rest of the year will pose macro challenges for investors, the overall positive mood shown by most respondents — private equity, property companies, REITS, funds, institutions and sovereign wealth funds, which collectively represent real estate holdings with total assets of around $1.5 trillion — offers a compelling case for continued growth in direct real estate investment.

Hotspots for GCC

According to Niraj Masand, Director of Banke International, despite the slowdown, investment by the high-net-worth individuals in the region does not seem to be affected. While London has always been a top destination outside the UAE, Dubai and Abu Dhabi are among the preferred locations within the UAE. The US, Australia, Singapore, Germany and Turkey are also gaining ground.

“With these destinations being heavily regulated and highly transparent, real estate prices have historically increased over the medium to long term and this attractiveness will only increase as the dollar continues to strengthen in the current cycle,” says Masand.

Masand says the depressed oil price won’t be a big factor in real estate investment. “Despite the negative forecasts circulating in recent months, there has been an increase in transactions as reported by the Dubai Land Department.”