There can be few areas of the world that show so clearly the dangers of over-development than the skyline of Dubai, which once had the highestconcentration of construction cranes in the world. Today, the cranes are idle, the market has stalled and there is a new mood of sobriety.
“Just a couple of years ago, anyone could buy a piece of land and become a developer,” says Ahmed Al Hatti, Chairman of Cayan Investment and Development, a leading regional construction company. “Today, everything has changed. It is much more focused on quality of project, location and the developer’s previous projects. But for established, successful developers with a good track record, there are good opportunities.”
In an environment where developers have slowed down, closed or indeed gone under, Cayan is still expanding and recruiting. Cayan is focusing a lot of attention on the Saudi market, which Mr. Al Hatti believes has many interesting characteristics, including demographics. “There is a population of around 27 million people with some 40 percent of the population under the age of 15,” he says. “As a result, there is a big demand for accommodation and a government that is working hard to develop the mortgage market.”
The demographic and regulatory changes currently underway in Saudi Arabia could represent a valuable opportunity for investors. In a report published in late 2008, Jones Lang LaSalle forecasted significant growth in both the residential and commercial real estate sectors in the country.
They highlighted a number of important drivers of growth, including new mortgage laws aimed at solving the current lack of mortgage financing and extending home ownership, a shortage of residential units, and growth rates in the office sector that are ahead of those in other GCC countries.
