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Opportunities – The Property
Qatar’s Transformation
Perspective
2 June 2009
From US Credit Crunch to Global Economic Crisis
2
Economic Crisis Synopsis
IMMEDIATE IMPACT
LONG TERM IMPLICATIONS
 Fluctuation in commodity prices
 Fears of a significant global recession
 Nationalization of Banks
 Consumer confidence affected
 Stock markets are taking a plunge
 Investor pessimism
 Sharp increase in corporate defaults
 Weakening of the traditional western
corporate leaders
 Shift from Mature to Emerging
markets
 Stronger emerging market giants from
the Middle East and BRIC countries
 Increasing role for Gulf states on
global stage
 Opportunity for emerging countries to
enter new markets and geographies
 Move to polarized global economy
3
Impact of Financial Crisis on Real Estate Markets
Pre-Crisis
Post-Crisis
Robust Demand
Rents Rising
Increasingly International Market
Cheap & Plentiful Debt
More Buyers than Sellers
Cap Rates Falling
Prime = Secondary
Traded Volumes High
4
Middle East Less Impacted
World Economic Outlook Q1, 2009
7
GDP Growth (%)
6
5
4
3
2
1
0
2006
2007
World
2008
Adv anced economies
2009
Middle East
Source: IMF, Word Economic Outlook, March 2009
5
Stages in Market Maturity
Transparency
Required Returns
(Hurdle Rates)
Market Volatility
Catalyst
Time
Growth
Cairo
Muscat
Doha
Abu Dhabi
Dubai
Maturing
Core
Moscow
Shanghai
London
New York
Source: Jones Lang LaSalle – World Winning Cities 2008
6
MENA Transparency
Highly Transparent
Tier 1
Transparent
Tier 2
Semi-Transparent
Tier 3
Low-Transparent
Tier 4
Opaque
Tier 5
Dubai
Bahrain
Abu Dhabi
Saudi Arabia, Morocco, Egypt
Oman, Qatar, Kuwait
Pakistan, UAE (Other Emirates)
Sudan, Algeria, Syria
7
Investor Sentiment – Global
Asia Pacific
26%
North America
10%
South America
8%
Eastern Europe
3%
Western Europe
7%
Africa
10%
 Middle East still seen as strongest
performing market globally (36%) although
this has fallen from 56% back in September
 Asia Pacific is seen as second strongest increased from 20% since last survey
 Improvement in expected performance in
North America from 5% since last survey
Middle East
36%
 Improvement in expected performance in
Western Europe from 2% since last survey
Source: Jones Lang LaSalle ISS, March 2009
8
Investor Sentiment - MENA
Saudi Arabia offers strong potential –
large and rapidly growing market
continues to open up and offer new
opportunities
Bahrain
6%
North Africa
4%
Levant
5%
UAE - Abu Dhabi
26%
Kuw ait
2%
Oman
2%
Qatar
19%
Qatar expected to offer strong
performance building upon its reputation
as the next emerging GCC real estate
market and its gas wealth
Investors still remain bullish towards the
UAE, especially Abu Dhabi
UAE - Dubai
11%
Saudi Arabia
25%
Source: Jones Lang LaSalle ISS, March 2009
9
Key Strengths of Qatar
1
Growing population
2
Opportunity for infrastructure led investment
3
Strong government support
4
Highest GDP per capita in the world
35
Ample off-balance sheet income to support growth
46
Gas based economy (less fluctuating prices)
37
Regional influence
4
10
Qatar – World’s Highest GDP
120,000.00
 Domestic and regional infrastructure
investment
 Securing the future through an active
global agenda
100,000.00
80,000.00
60,000.00
40,000.00
20,000.00
ina
Ch
zil
Br
a
ss
ia
Ru
bia
Ar
a
n
Sa
u
di
Om
a
in
Ba
h
ra
in
Sp
a
an
Ja
p
ly
It a
m
do
ait
Kin
g
Un
ite
d
Ku
w
ny
ma
es
Ge
r
St
at
ce
Un
ite
d
Fr
an
UA
E
Qa
ta
r
0.00
GDP per Capita
Source: IMF November 2008
11
Growth Estimates (2009)
Real Annualized GDP Growth Rate 2008-2011
Qatar
10.0%
United Arab Emirates
2.0%
Saudi Arabia
1.5%
India
6.0%
China
8.0%
EuroZone
-2.0%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
Source: Various
12
Requirements to Recovery
Dec 2008
May 2009
Dec 2008 May 2009
Macro Economic
Real Estate
Global economic stability
Increased occupier demand
Recovery in oil prices
Reduction of Future supply
pipeline
Stability in employment levels
Stabilisation of pricing levels
Financial / Liquidity
Increasing transaction levels
Decline in cost of capital (interest rates)
Consolidation of real estate
participants
Recovery in equity markets
Implementation of new
investment paradigm
Recapitalization of banking sector
Supporting Factors
Increased funding available to real
estate sector
Recovery in tourism
Improved brand perception
Required
Underway
Improvement in corporate
governance
Achieved
Concerted government action
Source: Jones Lang LaSalle
13
Emerging World Winning Cities
Moscow
Prague
Budapest
Warsaw
Beijing
Doha
Mexico City
Abu Dhabi
Delhi
Shanghai
Mumbai
Bangkok
Bangalore
Kuala Lumpur
Sao Paulo
Johannesburg
Buenos Aires
Santiago
Source: Jones Lang LaSalle World Winning Cities, 2009
14
Doha: A Destination in the Making
1.
Performance
2.
Planning
3.
Population
4.
Place Making
5.
Power
6.
People
7.
Purity
8.
Process
9.
Property
10. Physical
Source: Jones Lang LaSalle World Winning Cities, 2009
15
Thank You
Avik Rakhit
Head of Northern Gulf
Jones Lang LaSalle
[email protected]
www.joneslanglasalle-mena.com