Posts Tagged ‘United Arab Emirates’

Middle East Investors See Good Deals Globally

Thursday, February 4th, 2010

Middle East investors shopping in Europe and the Far East.Capital is flowing out of the Middle East and being invested in real estate across the globe, according to Nicholas Maclean, Managing Director, CB Richard Ellis, Middle East. “The outflow of capital from the Middle East to be invested into real estate properties worldwide has been higher than the influx of global capital into real estate properties in the Middle East.  The UAE, in particular, has been looking to diversify its investments and part of the reason has been the lack of transparency within this region.”

Europe and the Far East have received the lion’s share of Middle East investment, with India and China perceived as strong growth markets.  Additionally, United Arab Emirates capital is being infused into Abu Dhabi’s office and hospitality sectors.  “Capital spent as FDI into real estate within the Gulf Cooperation Council represents only 11 percent of the total.  Cross-border activity in the world has exceeded 50 percent and so we have a great opportunity to be the recipient of more investment,” Maclean said.

In terms of where the Middle East is placing its investment dollars globally, “London, Paris and Germany have been the largest recipients in Europe while Hong Kong, Singapore and Australia saw the largest inflows in the regions in the Far East.  Knowledge and liquidity have been the key driving forces for the Middle East investors transferring capital to these areas.  Institutional investors from the Middle East are investing in commercial developments in these markets while individual investors are looking at residential properties in the UK,” Maclean said.

To learn more about the Middle East and its real estate market, listen to Rochdi Younsi, director in the Middle East and Africa practice of Eurasia Group, analyze the major players in real estate and the new investment opportunities in the Middle East.

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Posted in Development, Economics, Office, Residential | No Comments »

World to Restructure $26 Billion Worth of Real Estate-Related Debt

Monday, December 7th, 2009

Dubai World has entered into discussions with its banks to restructure its $26 billion worth of debt, including $3.5 billion owed by its property unit, Nakheel.  Dubai World is Dubai’s flag bearer in global investments.  As a holding company it operates a highly diversified spectrum of industrial segments and plays a major role in the emirate’s rapid economic growth.  Dubai World’s investment spans four strategic growth areas of 21st century commerce: Transport & Logistics; Drydocks & Maritime; Urban Development; and Investment & Financial Services.

The rest of Dubai World’s liabilities are described as being on “a stable financial footing”.  Excluded from the negotiations will be debts from subsidiaries such as Infinity World Holding and Istithmar World Ports & Free Zone World, according to a Dubai World statement.  Currently, Dubai is trying to defer payments on less than half of $59 billion of its total liabilities.

Sheikh Mohammed Bin Rashid Al Maktoum - Dubai’s ruler and Prime Minister of the United Arab Emirates - said the debt that Dubai World plans to restructure includes approximately $6 billion of Islamic bonds sold by Nakheel.  “Initial discussions have commenced with the Banks of Dubai World and are proceeding on a constructive basis,” said a Dubai World spokesman.  “It is envisaged the restructuring process will be carried out in an equitable way for the overall benefit of all stakeholders.”

Dubai’s government said its Financial Support Fund will lead Dubai World’s workout process, and named Aidan Birkett of Deloitte LLP as the chief restructuring officer.  Dubai World plans to seek an extension of its loan maturities to May 30, 2010, at the very earliest.

According to Nick Chamie, an analyst with RBC Capital Markets in Toronto, “Now that they’re saying $26 billion, it reduces some of the panic that built up in the last few days.  This is positive.  The market was feeding on its own concern and there were talks of $60 billion debt that would need to be restructured.”

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Rochdi Younsi: Doing Business in the Middle East

Tuesday, September 22nd, 2009

With 28 million people and a $376 billion economy, Saudi Arabia provides its citizens with subsidized goods, services, healthcare, housing and education to assure a stable political system and long-term allegiance to the House of Saud, according to Rochdi Younsi, director in the Middle East and Africa practice at the Eurasia Group.  An expert on the Gulf Cooperation Council, Younsi has been featured on CBS’ “60 Minutes” and on National Public Radio.

viewThanks to its oil revenues, Saudi Arabia is building new cities such as the $26 billion King Abdullah Economic City, and hiring American contractors and consultants to construct this sustainable metropolis on the Red Sea.  The vision: to create modern cities in which various major corporations will be headquartered.  The payoff:  approximately 1,000,000 new jobs for Saudi nationals.

Cash-rich Kuwait, which recently invested $800 million buying the Chrysler Building, has a $138 billion economy and $200 billion in reserves.  According to Younsi, Kuwait is fascinating because it depends heavily on oil production and export to finance its Kuwait Investment Authority, which was established in the 1950s.  The nation’s democratic system of government can be both an impediment and an advantage because it includes a parliament with real legislative powers and the ability to redesign the emirate’s economic strategy - which can mean gridlock.

Dubai, by contrast, has a $37 billion economy and is $100 billion in debt, following its building boom to establish itself as the Middle East’s financial hub.  Younsi says it is important to not think of Dubai as an independent nation because it is one of seven emirates comprising the United Arab Emirates.  Dubai lacks energy resources and is dependent on revenues it receives from the larger and wealthier Abu Dhabi, which is rich in oil and gas.

Eurasia Group is the world’s leading political risk and consulting firm that helps corporations make informed business decisions in countries around the world.

 
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Posted in Economics, Financing | No Comments »

Watergate Hotel Relegated to White Elephant Status

Wednesday, July 29th, 2009

watergate01The Watergate Hotel - the site where the “third-rate burglary” that sparked the biggest political scandal in American history and brought down Richard M. Nixon’s presidency was plotted — is now a distressed commercial property that failed to find a buyer at a much-anticipated auction.

The 251-room hotel, with its spectacular views of the Potomac River, was taken back by its owner, PB Capital, a subsidiary of Deutsche Postbank AG after no bidders expressed interest in purchasing and rehabbing the property in an auction held by Alex Cooper Auctioneers.  Monument Realty, which in 2004 bought the 12-story hotel with financing from the now-bankrupt Lehman Brothers, owes PB Capital $44.3 million and is in default on the property.  In addition to paying off the loan, the new owner would have to rehab the Watergate, which has been closed for several years.  Built in 1967, the legendary hotel needs an estimated $100 million in renovations to bring it up to 21st-century standards.

David Furman, an attorney with Gibson Dunne, is not surprised that the hotel did not interest bidders.  “Lenders usually win in these kinds of auctions because they have the ability to credit bid the full amount of their loan.  There is usually a negotiated settlement before or after the auction.  It is rare that there is an upset at a foreclosure sale.”

According to Monument principal Michael Darby, he has commitments from new investors to restore the Watergate as a five-star hotel.  Another developer, Robert Holland, wants to buy the Watergate and is in talks with the United Arab Emirates-based luxury hotel chain, Jumeirah, to operate it.

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