Investors are turning their backs on property funds set up to buy discounted developments in the country because of a lack of quality projects. Several investment funds were announced during the past year as companies tried to cash in on a fall in property prices of almost 50 per cent in some areas, but so far they have yet to make a single transaction.
"The reason behind this is that it is difficult to identify investment grade assets offering competitive yields," said Noura Yassin, the director of valuation and consultancy at CB Richard Ellis Middle East. LRIM Investment Management, a private equity research company in Dubai, has even decided to shift its focus to properties with higher yielding rents, in markets such as the US. The company has linked up with Tate Capital Real Estate Solutions, a property company based in the US, to find Gulf investors for distressed assets in the US.
"There still seems to be a wide difference between the price sellers want to sell for and the amount buyers want to pay," said Tom Arnold, a director at LRIM Investment Management. The impending strata law in Dubai, which will hand the management of multi-unit buildings and developments over to property owners, could also be slowing investment. "What's more attractive to our investors are assets without a strata law; investors don't want to rent property with fragmented ownership," Mr Arnold said.
"They make money through the management of the asset and it's pretty difficult to do that if they don't have full ownership." The distressed property funds were widely seen as catalysts for a recovery in the property market. Tasweek, a property company in Abu Dhabi, said last September it would raise Dh918 million (US$249.9m) for distressed properties in the capital and Dubai, while Markaz, a Kuwaiti investment company, said in August it was considering an investment of Dh183m on Reem Island.
Matrix, a UK investment company, and the US-based Hines have also announced distressed property funds for the UAE. "The market at the moment doesn't lend itself to institutional investment," said John Davis, the chief executive in the Middle East for the property consultancy Colliers International.
agiuffrida@thenational.ae
Israel Palestine on Swedish TV 1958-1989
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Fighter profiles
Gabrieli Pessanha (Brazil)
Reigning Abu Dhabi World Pro champion in the 95kg division, virtually unbeatable in her weight class. Known for her pressure game but also dangerous with her back on the mat.
Nathiely de Jesus, 23, (Brazil)
Two-time World Pro champion renowned for her aggressive game. She is tall and most feared by her opponents for both her triangles and arm-bar attacks.
Thamara Ferreira, 24, (Brazil)
Since her brown belt days, Ferreira has been dominating the 70kg, in both the World Pro and the Grand Slams. With a very aggressive game.
Samantha Cook, 32, (Britain)
One of the biggest talents coming out of Europe in recent times. She is known for a highly technical game and bringing her A game to the table as always.
Kendall Reusing, 22, (USA)
Another young gun ready to explode in the big leagues. The Californian resident is a powerhouse in the -95kg division. Her duels with Pessanha have been highlights in the Grand Slams.
Martina Gramenius, 32, (Sweden)
Already a two-time Grand Slam champion in the current season. Gramenius won golds in the 70kg, in both in Moscow and Tokyo, to earn a spot in the inaugural Queen of Mats.
The%20specs
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Leaderboard
63 - Mike Lorenzo-Vera (FRA)
64 - Rory McIlroy (NIR)
66 - Jon Rahm (ESP)
67 - Tom Lewis (ENG), Tommy Fleetwood (ENG)
68 - Rafael Cabrera-Bello (ESP), Marcus Kinhult (SWE)
69 - Justin Rose (ENG), Thomas Detry (BEL), Francesco Molinari (ITA), Danny Willett (ENG), Li Haotong (CHN), Matthias Schwab (AUT)
Company%20Profile
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The Bio
Favourite holiday destination: Either Kazakhstan or Montenegro. I’ve been involved in events in both countries and they are just stunning.
Favourite book: I am a huge of Robin Cook’s medical thrillers, which I suppose is quite apt right now. My mother introduced me to them back home in New Zealand.
Favourite film or television programme: Forrest Gump is my favourite film, that’s never been up for debate. I love watching repeats of Mash as well.
Inspiration: My late father moulded me into the man I am today. I would also say disappointment and sadness are great motivators. There are times when events have brought me to my knees but it has also made me determined not to let them get the better of me.