2 june 2009 qatar’s transformation – the property perspective opportunities
TRANSCRIPT
2 June 2009
Qatar’s Transformation – The Property Perspective
Opportunities
2
From US Credit Crunch to Global Economic Crisis
3
LONG TERM IMPLICATIONSLONG TERM IMPLICATIONS
Shift from Mature to Emerging markets
Stronger emerging market giants from the Middle East and BRIC countries
Increasing role for Gulf states on global stage
Opportunity for emerging countries to enter new markets and geographies
Move to polarized global economy
Economic Crisis Synopsis
IMMEDIATE IMPACTIMMEDIATE IMPACT
Fluctuation in commodity prices Fears of a significant global recession Nationalization of Banks Consumer confidence affected Stock markets are taking a plunge Investor pessimism Sharp increase in corporate defaults Weakening of the traditional western
corporate leaders
4
Impact of Financial Crisis on Real Estate Markets
Cheap & Plentiful DebtCheap & Plentiful Debt
Robust DemandRobust Demand
Rents RisingRents Rising
Increasingly International MarketIncreasingly International Market
Cap Rates FallingCap Rates Falling
Prime = SecondaryPrime = Secondary
Traded Volumes HighTraded Volumes High
More Buyers than SellersMore Buyers than Sellers
Pre-Crisis Post-Crisis
5
Middle East Less Impacted
Source: IMF, Word Economic Outlook, March 2009
World Economic Outlook Q1, 2009
0
1
2
3
4
5
6
7
2006 2007 2008 2009
GDP
Grow
th (%
)
World Adv anced economies Middle East
6
Stages in Market Maturity
Time
Required Returns (Hurdle Rates)
Market Volatility
Transparency
Core Core
Catalyst
Growth Growth Maturing Maturing
DohaAbu Dhabi
LondonNew York
DubaiCairoMuscat
MoscowShanghai
Source: Jones Lang LaSalle – World Winning Cities 2008
7
MENA Transparency
Highly Transparent
Transparent
Semi-Transparent
Low-Transparent
OpaqueSudan, Algeria, Syria
Tier 1
Tier 2
Tier 3
Tier 4
Tier 5
Saudi Arabia, Morocco, EgyptOman, Qatar, Kuwait
Pakistan, UAE (Other Emirates)
DubaiBahrain
Abu Dhabi
8
Investor Sentiment – Global
Middle East still seen as strongest performing market globally (36%) although this has fallen from 56% back in September
Improvement in expected performance in Western Europe from 2% since last survey
Asia Pacific is seen as second strongest - increased from 20% since last survey
Improvement in expected performance in North America from 5% since last survey
Source: Jones Lang LaSalle ISS, March 2009
North America10%
South America8%
Eastern Europe3%
Western Europe7%
Middle East36%
Africa10%
Asia Pacif ic26%
9
Investor Sentiment - MENA
Bahrain6%
Kuw ait2%
Oman2%
Levant5%
North Africa4%
Saudi Arabia25%UAE - Dubai
11%
UAE - Abu Dhabi26%
Qatar19%
Saudi Arabia offers strong potential – large and rapidly growing market continues to open up and offer new opportunities
Qatar expected to offer strong performance building upon its reputation as the next emerging GCC real estate market and its gas wealth
Investors still remain bullish towards the UAE, especially Abu Dhabi
Source: Jones Lang LaSalle ISS, March 2009
10
Key Strengths of Qatar
Growing population1
Opportunity for infrastructure led investment2
Strong government support33
Highest GDP per capita in the world44
Ample off-balance sheet income to support growth35
Gas based economy (less fluctuating prices)46
37
4
Regional influence
11
Qatar – World’s Highest GDP
Source: IMF November 2008
0.00
20,000.00
40,000.00
60,000.00
80,000.00
100,000.00
120,000.00
Qatar
UAEFran
ce
United S
tates
German
yKuw
ait
United K
ingdo
mIta
lyJap
anSpa
in
Bahrai
nOman
Saudi A
rabia
Russia
Brazil
China
GDP per Capita
Domestic and regional infrastructure investment
Securing the future through an active global agenda
12
Growth Estimates (2009)
Real Annualized GDP Growth Rate 2008-2011
10.0%
2.0%
1.5%
6.0%
8.0%
-2.0%
-4% -2% 0% 2% 4% 6% 8% 10% 12%
Qatar
United Arab Emirates
Saudi Arabia
India
China
EuroZone
Source: Various
13
Requirements to RecoveryDec 2008 May 2009 Dec 2008 May 2009
Macro Economic Real Estate
Global economic stability Increased occupier demand
Recovery in oil prices Reduction of Future supply pipeline
Stability in employment levels Stabilisation of pricing levels
Financial / Liquidity Increasing transaction levels
Decline in cost of capital (interest rates) Consolidation of real estate participants
Recovery in equity markets Implementation of new investment paradigm
Recapitalization of banking sector Supporting Factors
Increased funding available to real estate sector
Recovery in tourism
Improved brand perception
Required Underway
Improvement in corporate governance
Achieved Concerted government actionSource: Jones Lang LaSalle
14
Mexico City
Santiago
Buenos Aires
Sao Paulo Johannesburg
Kuala Lumpur
Bangkok
Shanghai
Beijing
Delhi
Bangalore
Mumbai
Moscow
BudapestPrague Warsaw
Abu DhabiDoha
Source: Jones Lang LaSalle World Winning Cities, 2009
Emerging World Winning Cities
15
Doha: A Destination in the Making
Source: Jones Lang LaSalle World Winning Cities, 2009
1. Performance
2. Planning
3. Population
4. Place Making
5. Power
6. People
7. Purity
8. Process
9. Property
10. Physical
