By Sinead Cruise
LONDON, Aug 29 (Reuters) – Western investors have cooled on Gulf property markets, leaving the scene for local oil billionaires at least until global credit conditions ease — or markets in the region become more open and predictable.
In cash-rich Dubai, Abu Dhabi and Kuwait it is domestic investors who are again calling the shots in real estate, now that debt-starved British and U.S. property buyers have refocused on other areas they see as cheaper and more competitive.
“Given current economic conditions, U.S and British institutions are taking a lot of convincing to splash out in the Gulf,” said Fadi Moussalli, a director in Jones Lang LaSalle’s Dubai-based International Capital Group.
“There is less enthusiasm for Gulf property because foreigners are busy dealing with crises elsewhere,” Moussalli said.
Before the credit crunch, Western property buyers were making good progress in opening up fledgling Gulf property markets. But the balance of power has shifted back to local oligarchs and their fabulous wealth.
Citing data from emerging markets researcher REIDIN, Jones Lang LaSalle said less than a fifth of real estate purchases in Dubai in 2008 so far were made by European or U.S investors.
“A lot of people are (still) looking in the Middle East but it tends to be dominated by local capital,” said Charles Graham, a principal at property fund manager Europa Capital.
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