Robert Ziegler, VP A.T. Kearney
According to recent Real Estate Opportunity Index by A.T. Kearney, a global strategic management consulting firm, the companies, developers and investors alike have been scouting the world for real estate bargains. The most popular targets are in an area dubbed by A.T. Kearney as CHIMEA – the new economic region stretching from China across India and the Middle East to Africa. The Index reported that the top 50 emerging markets represented in the report has spent a combined total of $1.7 Trillion on construction in 2007, with a 5-year CAGR (compound annual growth rate) of up to 6%.
Focusing on a short list of emerging markets globally, the index weighs real estate development potential based on construction spending and growth as well as a combination of country risk and ease of doing business. The Index also notes that investors from CHIMEA have $4.1 trillion to invest and real estate development remains an attractive destination for capital.
The UAE, one of the most affluent economies in the region and home of its real estate boom, is experiencing both, the advantages and disadvantages of being in the forefront. Dubai, where the real estate boom originated, is a market waiting for the impact of oversupply, but construction delays may create a soft landing. Abu Dhabi has also been a real estate star, and now needs to modernize its superstructures and office space.