The economies of Islamic countries have witnessed a huge surge in the past few years with Islamic finance being one of the most booming markets estimated to be worth US$800 billion and growing at a substantial rate, by 15% to 20% a year. That performance has translated into an equally promising mortgage finance growth resulting in the rapid development of the Islamic retail sector, which has proved to be a stable investment option ensuring a high return on investment.
The rapid emergence of a wider range of real estate financial instruments compatible with the principles of Islamic finance is significantly contributing to the growth of the sector.
With the fast emergence of a prosperous middle class snapping up credit to buy homes, demand for Shari’ah-compliant retail financial services is set to accelerate. Moreover, financiers in the Middle East are developing new vehicles for investment, continuously offering new and innovative products in Islamic real estate. Due to the extra liquidity generated from high oil revenues, regional governments are planning ambitious infrastructure programs, especially the Kingdom of Saudi Arabia, which now represents the largest construction market in the Middle East. Its total real estate investments are estimated at US$270 billion and the total value of new projects is likely to reach US$410 billion this year.
Ayman Adel Kamal, the Chief Investments and Real Estate at Dubai Islamic Bank, said: “Saudi Arabia is the largest among the real estate markets in the region and offers immense potential for real estate development. The Kingdom’s economy is witnessing unprecedented growth. This coupled with the wide gap in demand and supply of housing units and the recent approval of the mortgage law makes Saudi Arabia a lucrative option in real estate investment.”
According to a report by Business Monitor, the growth of the industry has been pushed by the government’s efforts to liberalise the economy. Over the past few years, new laws have been voted to ensure attractive capital flow into the nation. Foreign companies are now allowed to own 100% of property and projects and to bid for government contracts. Since 2005, corporate taxes have decreased from 45% to 25%, highly encouraging companies to invest in the country.
To further attract investors, local authorities have therefore partnered with naseba, a leading international business information company, in hosting the Real Estate Investment World Summit in Riyadh on 19-20 October 2008 at the Four Seasons Hotel at Kingdom Centre.
“There are tremendous opportunities in Islamic investments in the real estate market in Saudi Arabia. With this Summit, we aim at further opening the Saudi market to foreign investors, exploring the investment opportunities within the conventional and Shari’ah-compliant real estate sector,” explained Teena Tolani, the producer of the Real Estate Investment World Summit.
The Summit will explore the investment opportunities through highly educational conference sessions, networking opportunities and an exclusive exhibition featuring companies such as Kuwait Finance House, Abraj Tourism, Dubai Islamic Bank, Nakheel, The Land Holding, Al Oula Development, TMG Holding, Al Rajhi Bank and Palm Hills Developments.
The most influential speakers in the Middle East will discuss the latest trends and issues in the finance and real estate industry. They include high profile members of the industry such as HE Saleh bin Ali Al-Turki, the Chairman of Council of Saudi Chambers of Commerce & Industry, HE Nasser Al-Shaikh, the Chairman of Amlak Finance, Dr Sulaiman Al Fahim, the CEO of Hydra Properties and Khaled Al Kamda, the Group Managing Director & CEO of Dubai Islamic Bank.
Working in partnership with BBC World News, TIME magazine and Forbes Arabia, the Real Estate Investment World Summit is the first most exclusive event of its kind to gather up to 250 global leaders including high net worth individuals, VIPs and board members from companies such as Kuwait Finance & Investment company, The National Investor, Amlak Finance, Jordan Investment Trust, Bank Al Jazira, and many others. They will learn more about new projects by meeting the key players in the real estate and finance industry and will discuss opportunities for future investments and developments.
Source: Justin Smith, Business Intelligence Middle East, Aug. 12, 2008