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UAE property firms plans overseas ventures

Dubai, The UAE may boast one of the world's most active real estate industries, but that has not stopped domestic-based realtors from pumping huge chunks of their capital into overseas ventures. Regions including South Asia and North Africa are being targeted by companies such as Emaar Properties and a host of UAE-based private developers including Damac, ETA Star and Tameer. Emaar Properties alone has launched projects worth more than $110 billion outside the UAE. The company yesterday announced the Dh2.58 billion Cairo Gate mall project - set to be Egypt's largest mall with a gross leasable area of 250,000 square metres. "Emaar is now diversifying income sources and expects to generate 60 to 70 per cent of revenues from international operations," said Arif Amiri, director, investor relations, corporate governance and business development at Emaar Properties. Nakheel, developer of the Palm Trilogy in Dubai, is yet to venture outside the emirate, but recently established Nakheel International in preparation for its first overseas projects. According to real estate analysts, the trend is set to continue as the UAE property market matures and buoyant emerging markets in Asia, Africa and Eastern Europe present tempting returns. "Over the last five years UAE real estate developers have done very well here and its only natural that they want to succeed internationally as well," said Roy Saker, associate director at property consultants Colliers International. "They have conducted feasibility studies into how much they can keep developing in the UAE and found that to continue making money they need to enter emerging markets. They can't just develop in the UAE and back out." In the past, analysts have suggested that concern over a supply-driven correction in the UAE market was the main reason for developers' expansion overseas. Saker said a wide portfolio is always a developers' goal, but said most major developers are 'solid enough' to survive a correction. Although they cannot boast the capital resources of Nakheel and Emaar, private developers have also allotted funds to overseas projects. Dubai-based ETA Star, which boasts a Dh7.5 billion portfolio in the UAE, is developing three projects overseas - The Gardens in Bangalore and Technopark and Jasmine Court in Chennai in India. The total value of its India developments is Rs1,600 crores, or Dh1.46 billion. An ETA Star spokesperson said the company's investment into overseas projects will outweigh new UAE developments for the foreseeable future. Targets include Oman, Turkey, Qatar, North Africa, Egypt, Russia, Kazakhstan, in addition to India and Pakistan. Rival Damac Properties, has also gone big in foreign markets. More than half of its $30 billion total portfolio (including UAE developments) is made up of projects in Egypt. It has also expanded into Qatar, Leb-anon, Turkey and Kuwait and is attempting to secure a land bank in China. However, leaving familiar territory in Dubai is not without its risks. Saker said the political climate in certain countries is the most risky factor, as demonstrated by recent violence in Lebanon following the launch of Damac's $150 million La Residence by Ivana Trump in Beirut City Centre. Other considerations include securing permits and coping with variations in property ownership laws, he said. UAE developers may be casting their gaze over the entire Mena region and beyond, but that does not mean they are preparing to abandon their roots. Sakar said trend of developing overseas will continue as the UAE property market matures, but stressed the cyclical nature of the real estate industry will see developers return to the UAE in force. Source : Gulf News, UAE

 

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