Global Arab Network | Financial crisis - Contracting sector the first to recover in GCC region

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Financial crisis - Contracting sector the first to recover in GCC region

Global Arab Network - - Asmaa Malik

Monday, 09 May 2011 10:30

Financial crisis - Contracting sector the first to recover in GCC region

Global Arab Network - The contracting sector appears set to be the first to recover from the financial crisis in the Gulf Cooperation Council, as bigger state spending is pushing the real estate sector up , an economic report here indicated.

The Mazaya Holding report said GCC states are now giving contractors projects and this is bringing hope of a recovery in the real estate sector which would pave the way for a wider boom in the sector across the region.

The report pointed out the decision by Kuwait Investment Authority (KIA) to set up a real estate portfolio on a capital of KD 1 billion to invest in the local real estate sector, excluding private housing properties.

This step came to make gains on both medium and long term from the sharp drop in property prices and the availability of investment opportunities at present. The management of the portfolio is to be entrusted to specialized bodies within specific guidelines. Kuwait Finance House was selected to run the first phase, with room to name other bodies to run part of the capital.

The report also pointed out the Saudi development plans, ongoing for years, and the development plans announced by Qatar, particularly those announced following the country's selection to host the 2022 world cup, would have the greatest impact on the real estate sector in the region after "strong shocks" that followed the global financial crisis of 2008.

Following the Q1 results for 2011, there is cautious optimism among those in the GCC real estate sector, particularly since most markets are showing signs of recovery and apparent tendency for hikes within the few coming months, most specifically in Qatar, Saudi Arabia, and Abu Dhabi.

The report also mentions that incidents in several Arab countries helped direct focus to the Arabian Gulf states as a stable environment and destination for work and for investment, and said demand for GCC real estate is on the rise in general, most notably in Kuwait and Saudi Arabia.

Global Arab Network

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